This post on CAMS IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to CAMS IPO or not.
Related Posts : CAMS IPO Review
CAMS IPO: Grey Market Premium etc.
- 22-09-20 GMP 320
- 19-09-20 GMP 280
CAMS IPO: Anchor Investors
CAMS finalised the allocation of 54,19,230 shares at Rs 1,230 apiece to 35 anchor investors. These anchor investors include 17 foreign portfolio investors, 13 mutual funds, 3 insurance companies and 2 alternative investment funds. Some names include SmallCap World Fund, HSBC, Abu Dhabi Investment Authority, Caisse de Depot et Placement First State Investments, Goldman Sachs, Eastspring Investments, Fidelity Investment Trust, Government of Singapore and Nomura Funds Ireland Public Ltd.Many domestic financial institutions and FPIs picked up 4.5% stake each for close to Rs 30 crore, each. Like A large number of domestic financial institutions and FPIs picked up 4.5% stake each for close to Rs 30 crore, each. HDFC Mutual Funds, ICICI Prudential Mutual fund, SBI Mutual Funpicked up 4.5% equity shares and so forth.
Subscription: CAMS IPO ( x times)
| Day / X times | QIB | NII | Retail | emp | Total |
| Day 3 | 73.18 | 111.85 | 5.55 | 1.16 | 46.99 |
| Day 2 | 0.83 | 1.22 | 2.91 | 0.52 | 1.93 |
| Day 1 | 0.25 | 0.30 | 1.40 | 0.24 | 0.82 |
| Tot Applications | ~ 2134738 | ||||
| Appl wise Retail | 4.05 x |
Consolidated Brokerage Views on CAMS IPO
.Capital Market : ” Score 47/100 ; EPS for FY2020 works out to Rs 35.5. The scrip is offered at P/E multiple of 34.6 times FY2020 EPS at the upper price band of Rs 1230.There are no listed companies in India that engage in a business similar to that of the company. Nearest comparable player is CDSL, which is a financial infrastructure and services provider for stock market transactions, operating in similar duopoly environment. CDSL is currently trading at P/E of around 43 times FY20 consolidated EPS. In recent months mutual funds are facing redemption pressures due to various reasons. There is a tentative initial trend towards investing directly in stock market rather than through mutual funds. This trend, if sustained, is sentimentally negative for the valuation of CAMS and positive for valuation of CDSL.”
Choice Broking: “The macros of mutual fund RTA is positive and is likely to witness a secular growth trend. CAMS have an asset light business model in the duopoly RTA market. It has debt free operations and demonstrated almost stable financial performance with significant cash flow generation. Also it is a consistent dividend paying company with an average payout ratio of over 55%. Despite positive fundamentals, we believe the demanded valuation is little stretched, so we assign a “Subscribe with Caution” rating for the issue.”
Geojit: “At the upper price band of Rs.1,230, CAMS is available at a P/E of 34.6x and when we annualize Q1FY21 numbers we arrive at a P/E of 36.7x for FY21E on a post issue basis. Given that there is no listed peer to compare, and based on stable financial, we assign a subscribe rating on this IPO.”
HEM Securities: “Company 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 company’s clients and serviced by company during July 2020. Over the last five years, company have grown its market share from approximately 61% during March 2015 to approximately 69% during March 2020, based on AAUM serviced. Therefore, looking after all, we recommend “Subscribe” the issue both for listing gains as well as long term horizon.”
KR Choksey: “We believe in light of CAMS’ market leadership, healthy growth potential in MF AUMs, newer service offerings, high profitability and return ratios, debt-free balance sheet and strong cash flow generation, the company should command similar multiples. We recommend a SUBSCRIBE to the issue, with the potential for healthy listing gains as well as long term stock price appreciation.”
Mehta Equities: “CAMS also enjoys a first mover advantage with no listed players for valuation comparison and high entry barriers protecting investor’s risk. Hence, we recommend investors to “SUBSCRIBE” to the issue for long term only as the market always rewards a player who has the growth potential with high returns”
Motilal Oswal : “At the higher end of the price band, the issue is valued at 35x FY20 P/E, which seems fully priced in. However, we like the company, given its leadership position, integrated business model, pan-India presence and robust financials. We recommend Subscribe for Long Term to the IPO as CAMS enjoy first mover advantage, 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.”
SPA Securities: “Score 3/5 ; CAMS is a niche player that provides cloud-communication platform as a service to enterprises, over-the-top players and mobile network operators. However, its business depends on the success of their relationship with mobile network operations. It relies on 3rd party technology systems and Infrastructure where defects, delays and failures can adversely affect its business. Its revenues come through a limited number of clients. Ahigh risk investor may opt the issue”
SP Tulsiyan Website: “While CAMS is a unique play on financial services and an alternate to AMC to ride the financialisation theme, pricing is very aggressive leaving limited scope for short term gains. Those with a long term view may wait for an attractive entry price post listing, as it qualifies as a quality mid-cap.“
YES Securities: “The company earns a healthy RoE of 35%+, has zero debt, has a dividend payout policy of at least 65% and generates robust free cash every year. The valuations are reasonable at FY22E P/E of 26x. We assign a SUBSCRIBE rating.”
MORE WILL BE ADDED AS THEY BECOME AVAILABLE
Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above infoimration is collated from various online sources and is for educational purpose only. Please visit indidivual brokearge sites to read the actual reports. Please donot make ypur investkent decisions based on this info as it is not completre amd exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.