CAMS –IPO View – (Leadership position in niche business with high entry barriers)
Issue Details
Price Band: Rs 1229 – 1230
Bid Lot: 12 shares
Issue Date: 21-Sept-20 to 23-Sept-20
Issue Size: Rs 2,244cr (entire OFS by NSE)
Post-issue market cap @ Rs1230: Rs6,000 crore
View: Market leader in niche MF RTA business, pan-India presence and robust financials.
• CAMS is the largest MF RTA in India with 70% market share (61% in FY15). It caters to four of the five largest MFs in India as well as nine of the 15 largest MFs based on AAUM as of July’20.
• Over FY17-20, CAMS Revenue/EBITDA/PAT grew at a CAGR of 14%/13%/12%.
• The balance sheet is lean with zero debt and negative working capital, thus resulting in healthy return ratios (FY20 RoE/RoCE at 35%/37%).
• The entire INR22bn IPO consists of only OFS of 18.2mn shares by NSE, paving way for listing on NSE platform in future
• At the higher end of the price band, the issue is valued at 35x FY20 P/E, which seems fully priced.
• We recommend Subscribe for Long Term to the IPO as CAMS enjoy first mover advantage along with leadership position, asset light business model and high entry barriers
• Risk: (1) Top 5 clients contribute 71% to its revenues, (2) technological disruption and (3) data security & privacy.
| Financial (fig. in Crs) | ||||||||
| Year | Revenue | EBITDA | OPM | PAT | NPM | Shares | FV | EPS |
| 2016 | 391 | 143 | 36.57% | 84 | 21.48% | 4.876 | 10 | 17 |
| 2017 | 472 | 183 | 38.77% | 108 | 22.88% | 4.876 | 10 | 22 |
| 2018 | 650 | 254 | 39.08% | 160 | 24.62% | 4.876 | 10 | 33 |
| 2019 | 711 | 261 | 36.80% | 130 | 18.28% | 4.876 | 10 | 26 |
| 2020 | 721 | 309 | 42% | 173 | 23% | 4.876 | 10 | 35 |
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| CAMS IPO Tentative Date / Timetable | |
| Bid/Offer Opens On | Sep 21, 2020 |
| Bid/Offer Closes On | Sep 23, 2020 |
| Finalisation of Basis of Allotment | Sep 28, 2020 |
| Initiation of Refunds | Sep 29, 2020 |
| Credit of Shares to Demat Acct | Sep 30, 2020 |
| IPO Shares Listing Date | Oct 1, 2020 |
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