{"id":539,"date":"2020-09-16T12:06:57","date_gmt":"2020-09-16T12:06:57","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=539"},"modified":"2020-09-17T07:49:12","modified_gmt":"2020-09-17T07:49:12","slug":"things-to-consider-before-investing-in-cams-ipo","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/things-to-consider-before-investing-in-cams-ipo\/","title":{"rendered":"Things to Consider Before Investing in CAMS IPO"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div>\n<p>The Computer Age Management Services (CAMS) is the leader amongst the largest registrars and transfer agents of mutual funds in India, which recently has filed draft prospectus with the SEBI. CAMS is a Chennai based financial service and infrastructure provider which likely to hit the primary market on Monday, September 21. The IPO will be an offer-for-sale (OFS) of 1,82,46,600 shares by NSE investments. The IPO will be closed on September 23. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"counter-hierarchy counter-decimal ez-toc-grey\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\"><i class=\"ez-toc-glyphicon ez-toc-icon-toggle\"><\/i><\/a><\/span><\/div>\n<nav><ul class=\"ez-toc-list\"><li><a href=\"#CAMS_IPO_Details\" title=\"CAMS IPO Details\">CAMS IPO Details<\/a><\/li><li><a href=\"#SWOC_Analysis\" title=\"SWOC\nAnalysis\">SWOC\nAnalysis<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">CAMS IPO Details<\/h2>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"\"><tbody><tr><td>\n  <strong>IPO Size<\/strong>\n  <\/td><td>\n  Rs. 2,250 crore\n  <\/td><\/tr><tr><td>\n  <strong>Price Band<\/strong>\n  <\/td><td>\n  Rs. 1100-1200\n  per share\n  <\/td><\/tr><tr><td>\n  <strong>Minimum Lot Size<\/strong>\n  <\/td><td>\n  12 shares\n  <\/td><\/tr><tr><td>\n  <strong>Face Value<\/strong>\n  <\/td><td>\n  Rs. 10 per share\n  <\/td><\/tr><tr><td>\n  <strong>Employee Discount<\/strong>\n  <\/td><td>\n  NA\n  <\/td><\/tr><tr><td>\n  <strong>Retail Allocation<\/strong>\n  <\/td><td>\n  35%\n  <\/td><\/tr><tr><td>\n  <strong>Issue Open Date<\/strong>\n  <\/td><td>\n  September 21,\n  2020\n  <\/td><\/tr><tr><td>\n  <strong>Issue Close Date<\/strong>\n  <\/td><td>\n  September 23,\n  2020\n  <\/td><\/tr><tr><td>\n  <strong>Listing Date<\/strong>\n  <\/td><td>\n  October 1, 2020\n  <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The CAMS is co-owned by the National Stock Exchange\n(NSE) Investments HDFC Group, Warburg Pincus, Faering, and Capital ACSYS\nInvestments. As mentioned, CAMS is the leading largest registrar; offering\nsolutions to mutual funds and other financial institutions in payment and\ntransaction execution, dividend processing, investor interface, and\ncompliance-related matters. Apart from this, the company also offers customized\nsolutions in KYC registration, electronic payment collections, and software\nsolution business. CAMS has an asset-light business model. Consequently, the\nearnings are distributed among shareholders. The company has an RoE of more\nthan 25 per cent, high expense ratio, and market leadership position makes it\nenticing for investors to invest in the IPO shares of CAMS. <\/p>\n\n\n\n<p>However, it would be recommendable to go through some\nkey points before investing in CAMS IPO. The key points are as follow:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>According\nto the DRHP, the company is India\u2019s largest registrar and transfer agent of mutual\nfunds. The company has an aggregate market share of 69.4% based on Average\nAsset Under Management (AAUM) during November 2019. Over the last 5 years, the\ncompany managed to grow from Rs. 2,180 billion to Rs. 6,643 billion in FY2019. <\/li><li>Over\nthe years, the company has expanded its product lines and now offering services\nin six business verticals apart from mutual funds. <\/li><li>CAMS\nhas an extensive backend network to support extensive operations. As of\nSeptember 2019, the company had around 278 service centres spread over 25\nstates and 5 union territories. The company had more than 1300 employed\npersonnel at front offices and more than 5000 at back offices. <\/li><li>A\ndebt-free balance sheet has helped the company in maintaining consistent\nprofitability. <\/li><li>CAMS\nhas outsmarted its peers and the company top line\u2019s growth in the last three\nyears implied a CAGR of 20.4%. However, there was a dip in profitability in the\ncurrent year caused the net income to drops at FY2018 levels. Despite this, the\ncompany managed to recover the profitability stood at a robust 18.3%. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>SWOC\nAnalysis<\/strong><\/h2>\n\n\n\n<p><strong>Strengths: <\/strong>No matter how big the company is, what\nkind of operations they perform, which type of customers they target, strengths\nalways come from their promoters background prospects and benefits and type of\nmarket structure. The financial infrastructure provider is backed by strong\npromoters such as NSE, Warburg Pincus, Faering Capital ACSYS Investments and\nHDFC Group. The asset-light business model of the company will push the company\nfor healthy payout to its shareholders. The company has the advantage of a monopoly\nmarket in the listed space.<\/p>\n\n\n\n<p><strong>Weakness: <\/strong>It is hard to find any weakness in the ongoing scenario as the company is not facing rigorous competition from its competitor. The company has captured 70% of the total Average Asset under Management (AAUM) handled by mutual funds. However, the<strong> s<\/strong>ervices are provided by the company through the internet increases our exposure to potential cybersecurity attacks including viruses, ransomware and spam attacks.&nbsp; The company has experienced cybersecurity threats to our information technology infrastructure and have experienced non-material cyber attacks. Moreover, any changes in the technology stricter made by SEBI could dampen their survival in future.<\/p>\n\n\n\n<p><strong>Opportunities: <\/strong>There is no denying the fact that\nIndian economy is less penetrated in the fields of mutual funds and insurance\nmarket. The Indian economy is known for following the footprints of western\neconomies in which insurance is a basic necessity and investors are more akin\nto investment rather than channelizing into banks in the forms of FDs or\nsavings. So there is enough room for the core product of CAMS to flourish in\nfuture.<\/p>\n\n\n\n<p><strong>Challenges: <\/strong>The technology-driven companies usually face the turmoil of technology obsolete and changes drawn in the structural work by regulatory authorities. The company will be required to continue its software-development to attain hassle-free operations. On the front of peer comparison, the company faces competition from Karvy Fintech (now named as \u2018KFintech\u2019) and Franklin Templeton Asset Management (India) Pvt Ltd. (FTAMIL). While the whole market is dominated by CAMS and KFintech as FTAMIL is restricted to investors of Franklin Templeton Mutual Fund only. <\/p>\n\n\n\n<p><strong>Outstanding Litigation<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"626\" height=\"285\" src=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2020\/09\/image.png\" alt=\"\" class=\"wp-image-545\" srcset=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2020\/09\/image.png 626w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2020\/09\/image-300x137.png 300w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2020\/09\/image-520x237.png 520w\" sizes=\"auto, (max-width: 626px) 100vw, 626px\" \/><\/figure>\n\n\n\n<p><strong>Financial Statements<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"637\" height=\"422\" src=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2020\/09\/image-1.png\" alt=\"\" class=\"wp-image-546\" srcset=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2020\/09\/image-1.png 637w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2020\/09\/image-1-300x199.png 300w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2020\/09\/image-1-520x344.png 520w\" sizes=\"auto, (max-width: 637px) 100vw, 637px\" \/><\/figure>\n\n\n\n<p>Seeing above, we can say that there is no doubt in the performance of the company. The company has a long proven record of accomplishments. The company\u2019s revenue and growth both have shown remarkable growth throughout the years. For more details, it would be recommendable to go through the red herring prospectus. You can also go through the <a href=\"https:\/\/www.invest19.com\/ipo\/details.php?PageID=6\"><strong>CAMS IPO Details<\/strong><\/a> to get deep insights into the company\u2019s performance and financials. <\/p>\n<div class='epvc-post-count'><span class='epvc-eye'><\/span>  <span class=\"epvc-count\"> 3,985<\/span><\/div><div class=\"pld-like-dislike-wrap pld-template-1\">\n    <div class=\"pld-like-wrap  pld-common-wrap\">\n    <a href=\"javascript:void(0);\" class=\"pld-like-trigger pld-like-dislike-trigger \" title=\"\" data-post-id=\"539\" data-trigger-type=\"like\" data-restriction=\"ip\" data-ip-check=\"0\" data-user-check=\"1\">\n                        <i class=\"fas fa-thumbs-up\"><\/i>\n                    <\/a>\n    <span class=\"pld-like-count-wrap pld-count-wrap\">4    <\/span>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>The Computer Age Management Services (CAMS) is the leader amongst the largest registrars and transfer agents of mutual funds in India, which recently has filed [&hellip;] <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/www.invest19.com\/blog\/things-to-consider-before-investing-in-cams-ipo\/\">Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":540,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[70,7],"tags":[162],"class_list":["post-539","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo","category-investment","tag-cams-ipo"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/539","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=539"}],"version-history":[{"count":5,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/539\/revisions"}],"predecessor-version":[{"id":547,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/539\/revisions\/547"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/540"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}