CAMS Listing: Equity Stock will list on bourses today; likely to list at 25 pct premium over the issue price

Computer Age Management Services Limited (CAMS) will list its equity shares on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) today, i.e. October 1, 2020, after a successful initial public offer (IPO) earlier this month.

Warburg Pincus and NSE backed CAMS IPO was open for subscription earlier between September 21, 2020, and September 23, 2020. The price band of the issue was kept at Rs 1,229-1,230 per share.

It is expected that CAMS will to list with around 25-30 per cent premium over issue price today as it enjoys the first-mover advantage in the said industry. It is expected the equity shares of CAMS will be listed in the range between Rs 1,550-1,650 levels, which is higher than the allotment price of Rs 1,230 per share. Investors can hold shares for long-term gains.

There is no direct comparable listed peer, an asset-light business model with strong revenue visibility and healthy financial health.

However, the premium in the grey market for CAMS came down in the last few days from Rs 370-380 to Rs 310 per share, maybe because the demand shifted towards Mazagon Dock Shipbuilders.

Incorporated in 1988, Computer Age Management Services Limited (CAMS) is a technology-driven financial infrastructure and services provider to mutual funds and other financial institutions with over two decades of experience. It is India's largest registrar and transfer agent of mutual funds with an aggregate market share of approximately 70% based on mutual fund average assets under management (AAUM) managed by its clients and serviced by it during July 2020, according to the CRISIL Report.

It provides technology-based services such as dividend processing, transaction origination interface, settlement and reconciliation, compliance-related services etc. It offers integrated and customized portfolio services through its physical network spread across India. It has around 271 service centres spread across 25 states and 5 union territories, as of June 2020. These centres are supported by call centres in four major cities and four back offices.

Its total income for the three months ended June 30, 2020, and the financial year 2020 was Rs 1,634.61 million and Rs 7,213.43 million, respectively. Its profit after tax for the three months ended June 30, 2020, and the financial year 2020 was Rs 408.25 million and Rs 1,734.56 million, respectively.

Key clients for CAMS include SBI Fund Management, HDFC Asset Management, Kotak Mahindra Asset Management, ICICI Prudential Asset Management, Aditya Birla Capital, DSP Investment Managers and Franklin Templeton Asset Management (India).