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CAMS IPO Reviews + Recommendations

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resh:
Computer Age Management Services - CAMS IPO is opening on Monday Sep-21st and closes on Sept-23rd.
Price Band ₹1,229 – ₹1,230 per share
Retail Portion: Not less than 6,322,435 Equity Shares - 35%
NOTE The issue is OFS by existing Shareholders and hence NO MONEY will flow into the COMPANY.

Here are the Research Reviews & Recommendations

Devesh Agarwal of IIFL Securities said,

CAMS is the dominant player in a two-player MF RTA industry, with 70% market share. It services 4 of the top-5 MFs in the country. Its revenue growth is directly linked to the AUM growth of its partner MFs and it is, hence, a proxy play on the MF industry. The opportunity landscape for the MF business in India is huge, given low penetration and financialisation of household (HH) savings, thus providing long-term visibility. The IPO valuation is at discount to the nearest comparables (AMCs, Depositories and Exchanges) and has scope to re-rate.

SMC has the following views,

Considering the valuation at upper price band of Rs.1230, EPS and P/E of FY2020 are Rs. 35.55 and 34.60 multiple respectively and at a lower price band of Rs. 1229, P/E multiple is 34.57; at upper price band of Rs.1230 , book value and P/B of FY2020 are Rs.110.65 and 11.12 multiple respectively and at a lower price band of Rs. 1229, P/B multiple is 11.11. No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.

DealMoney Securities Ltd has the following recommendation,

CAMS is India's largest registrar and transfer agent of mutual funds with an aggregate market share of approximately 70% based on mutual fund AAUM managed by its clients and serviced by the company during July 2020. CAMS has  Leadership position, integrated business model and PAN India presence.  Based on FY20 consolidated numbers, the issue is priced at a P/E of 34.6x. at diluted EPS of FY20 Which is priced fairly therefore we recommend SUBSCRIBE over the issue for a long term perspective

JM Financial, HDFC Securities, Axis Securities, ICICI Direct have no recommendation for retail investors.

resh:
Sharad Avasthi of SPA Securities said,

At the IPO price of 1230 the price discounts FY20 EPS at ~35x while the p/b multiple stands at ~11x. While valuations seem to price all
that CAMS has achieved over the last decade in sync with the mutual fund industry, the advent of technology and increased speed of
technology absorption due to COVID may not be very beneficial for the company. Future outlook will largely depend on the increase in
AIF and insurance repository business improvement, which look very promising for the long term hence we advice investors to apply with a long term horizon.

Anand Rathi Analyst Anindita Chaudhury said

At upper price band of ₹1,230, the IPO is priced at 34.6 times FY20 EPS and 36.7 times FY21 EPS (annualized). While currently there is no listed player to compare, we believe the IPO is reasonably priced considering the latest numbers. We remain optimistic on growth prospects of CAMS, given its leadership position in the market, scalable technology with robust infrastructure, strategic growth initiatives, high entry barriers in the industry and gradual growth in AAUM in the coming periods. We recommend Subscribe to this IPO.

Geojit Analyst said,

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

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