10 key things to know before subscribing to the CMS Info Systems IPO

The company is a leading player in a consolidating market with strong fundamentals, a pan-India footprint, and deep penetration in growing markets, Avaneesh Parasar.

CMS Info Systems Ltd, India’s largest cash manager by ATM points and retail pick-up points, will open its initial public offering (IPO) on December 21.

Here are 10 key things to know before subscribing to the issue:

1. IPO Dates

The three-day offer opens on December 21 and closes on December 23.

2. Price Band

The offer price band has been fixed at Rs 205–216 per share.

3. Offer DetailsThe IPO sized at Rs 1,100 crore is a complete offer for sale by Sion Investment Holdings Pte Ltd which holds 100% of the company.Half the offer is for qualified institutional buyers, 35% for retail investors, and the balance 15% for non-institutional investors.

After the issue, the promoter shareholding will come down to 65.59%.

4. Objectives of the Issue

To carry out an offer for sale of shares and to attain the benefits of listing the shares on the stock exchanges.

5. Lot Sizes

Investors can bid for a minimum of 69 shares and in multiples of 69 thereafter. Retail investors can invest a minimum of Rs 14,904 in one lot, and a maximum of Rs 1,93,752 in 13 lots.

6. Company Profile and IndustryIncorporated in 2008, CMS is one of the largest ATM cash management companies worldwide going by the number of ATM points as of March 31, 2021. For financial year 2020–21, their total currency throughput, or the total value of the currency passing through all of their ATM and retail cash management businesses, amounted to Rs 9.2 lakh crore (Rs 9.2 trillion).The company is engaged in installing, maintaining, and managing assets and technology solutions for banks, financial institutions, organised retail and e-commerce companies in India.The company operates in three segments which are cash management services (68.6% of 2020–21 revenues); managed services which includes banking automation products, common control systems, and software solutions (27.9%); and others which include financial cards issuance for banks and card personalisation services (3.5%).

As of August 31, 2021, the firm had a network of 3,965 cash vans and 238 branches and offices to cover all of India’s states and union territories.

7. FinancialsCMS recorded revenues of Rs 1,306 crore for the financial year 2020–21, which were down 5.6% from previous year. But profit for 2020–21 was higher at Rs 168.5 crore compared with Rs 134.7 crore for the previous financial year.Profit for the five months ended August 2021 stood at Rs 84.5 crore on revenues of Rs 626.3 crore.

Net margins have been improving consistently from 9.7% in 2019–20 to 12.9% in 2020–21. Net margins for the first five months of this financial year came in at 13.5%.

8. Strengths and Business StrategyThe company is a leading player in a consolidating market with strong fundamentals, pan-India footprint and deep penetration in growing markets. Its long-standing relationships with customers helps in increased business opportunities.

Its key strategies include growth through selective value-accretive acquisitions; capitalising on the growing cash cycle to expand operations; leveraging scale and integrated offerings to grow business; driving operational efficiencies, increasing profitability and expanding into areas that create synergies with the current business.

9. Promoters and ManagementShyamala Gopinath is chairperson and independent director and Rajiv Kaul is executive vice-chairman, whole-time director and CEO.Jimmy Lachmandas Mahtani, Ashish Agrawal and Krzyszt of Wieslaw Jamroz are non-executive directors.

Pankaj Khandelwal is president and chief financial officer and Praveen Soni is company secretary and compliance officer.

10. Grey Market, Allotment and Listing DatesThe company’s shares currently are not commanding any premium in the grey market, according to IPO Watch.The allotment of shares will be decided by December 28; unsuccessful investors will get refunds by December 29 and successful bidders will get shares in their demat accounts by December 30.Shares of CMS will list on the BSE and the National Stock Exchange on December 31.