CMS Info Systems IPO is Good or Bad?

CMS Info Systems IPO is Good or Bad? Check Subscription Status, Allotment, GMP

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CMS Info Systems Limited Introduction

They are India’s largest cash management company based on the number of ATM points and the number of retail pick-up points as of March 31, 2021, as well as one of the largest ATM cash management companies worldwide based on the number of ATM points as of March 31, 2021.

Their business includes installing, maintaining, and managing assets and technology solutions on an end-to-end outsourced basis for banks under long term contracts

CMS Info Systems Limited a Mumbai-based company is coming up with an IPO of 1,100 Crores. For further details read below analysis

What are the risk factors in CMS Info Systems IPO?

1. The entire IPO is of an offer for sale (OFS) which will directly go to the selling shareholders and not to the company

2. The company generates major revenue from cash management services utilized by the banks, so any change in the banking sector will be harmful to the company

3. A large portion of revenue for the company comes from limited customers

4. The company’s business model is highly risk-prone and exposed to risks like robbery, theft, and fraud

5. As the company handles a large volume of cash they are exposed to various security risks and crimes

6. The company’s expenses comes mostly from third-party services

7. The company’s promoter has pledged his shares over a US$60 Million Loan facility

8. There are outstanding legal proceedings against the company, its directors, and its subsidiaries.

9. The company has certain contingent liabilities which if materialize will affect the financials of the company

10. Company’s cash flow from investing and financing activities were negative over the last three years and may continue so

11. The company may in the future borrow unsecured loans as per the RHP

12. The promoters of the company are not experienced in the field and also have not actively participated in the business activities

What are the competitive strengths of CMS Info Systems IPO?

1. CMS Info Systems Limited is India’s largest cash management company based on the number of ATM points and number of retail pick-up points

2. The company has a pan India market share fleet of 3,965 cash vans and a network of 238 branches and offices based on the numbers as of August 31, 2021

3. Company has Longstanding customer relationships mostly which are MSPs, banks, and others

4. Company has a good track record of productivity, ATM uptime, and reporting and settlement

5. The company has a highly experienced senior management team

6. The financial track record of the company is also good with increasing profits and stable revenues over the past three years

What are the strategies Company follow towards their growth?

1. In India ATM penetration is low with only 22 ATMs per 100,000 adults as of December 31, 2020, Therefore, RBI is consistently growing ATM’s and its penetration which will ultimately grow the company’s business

2. Company has a successful track record of business acquisitions and plans to grow with more acquisitions in future

3. The company plans to drive growth through an Increasing share of integrated services, Improving productivity, and Risk cost reduction

4. Company has a strategy to expand their business areas relating to their current business-like Remote monitoring (outside the ATM and banking sectors), End-to-end currency management, Financial services distribution, Payment Solutions

5. Company plans towards continuing to develop processes and systems that support their workforce and our current scale of operations

What is CMS Info Systems Limited’s business model?

The company’s business model comprises mainly of these categories:

1. cash-in-transit services to the banks that run currency chests to enable them to distribute the cash to bank branches;

2. ATM cash management services to banks (on behalf of MSPs) to enable them to distribute cash and replenish their ATMs with cash;

3. ATM deployment and maintenance services to banks and on behalf of banks, Brown Label ATM services

4. retail cash management services to retailers and other corporates

5. reconciliation of ATM and retail cash balances and end-of-day reporting

6. credit and debit card personalization services to banks wishing to distribute credit and debit cards to give their customers access to cash; and

7. currency chest automation, which in addition to dedicated cash-in-transit service, also includes automated cash processing

Who is the promoter of CMS Info Systems Limited?

Sion Investment Holdings Pte. Limited is the promoter of the company.

How are the Company Financials?

  1. For the last three years revenues have Slightly inncreased
  2. Profits for the last three years are showing consistent growth
Financial Year EndedRevenue (₹ Million)PAT (₹ Million )EPS (₹)
March 201911,593.19961.416.33
March 202013,882.941,347.098.87
March 202113,219.211,685.2311.09
As of August 31st, 20216,297.23844.705.49
CMS INFOSYSTEMS LIMITED FINANCIALS

What are the objects of CMS Info Systems IPO net proceeds?

The entire IPO is of a 1,100 Crores Offer for sale and no fresh issue of shares, therefore the IPO proceeds will entirely go to the selling shareholders and the company will not get any amount from it, however, the company will get listing benefits.

CMS Info Systems IPO open & close date

IPO open date is : 21st Dec 2021

IPO close date is: 23rd Dec 2021

CMS Info Systems IPO allotment, refund & listing date

CMS Info IPO allotment date is: 28th Dec 2021

IPO refund date is: 29th Dec 2021

IPO listing date is: 31st Dec 2021

CMS Info Systems IPO allotment status

IPO allotment can be checked through their registrar website linkintime.co.in on 28th Dec 2021

CMS Info Systems IPO GMP (Grey Market Price) today

DateGMP ( ₹ )Premium (%)Expected Listing Price
Dec 17, 2021NIL (No trade)––
Dec 18, 2021NIL (No trade)––
Dec 19, 2021NIL (No trade)––
Dec 20, 2021Rs 3013.90%Rs 246
Dec 21, 2021Rs 3013.90%Rs 246
Dec 22, 2021Rs 3013.90%Rs 246
Dec 23, 2021Rs 62.78%Rs 222
GMP Table of CMS Info Systems IPO

CMS Info Systems IPO details, price band, & RHP

IPO bidding date21st Dec 2021 – 23rd Dec 2021
Price range Rs 205- Rs 216 Per share
Minimum order quantity69 Shares
(D)RHPView
CMS Info Systems IPO details

CMS Info Systems IPO live subscription status

Qualified Institutional Buyers (QIB)Noninstitutional bidders (NII)Retail individual investors (RII)Total no of shares offered
No of shares offered
79,24,527
39,62,26326,41,5091,45,28,299
Date Qualified Institutional Buyers (QIB) (No of times) Noninstitutional bidders (NII) (No of times) Retail individual investors (RII) (No of times) Total subscription (No of times)
21st Dec 20210.00x0.01x0.79x0.40x
22nd Dec 20210.00x0.04x1.30x0.66x
23rd Dec 20211.98x1.45x2.15x1.95x
Subscription Status of CMS Info Systems IPO

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CMS Info Systems IPO valuation (Overpriced or not?)

Calculating valuation with its upper price band of Rs 216

Given,

FY-21 EPS is = 11.09

The last three years’ weighted average EPS is = 9.56

5 months Aug 21 EPS is = 5.49

Workings & calculation of P.E

FY-21 EPS is = 11.09, 216/11.09 = 19.5x P.E

The last three years’ weighted average EPS is = 9.56, 216/11.09 = 22.6x P.E

5 months Aug 21 EPS is = 5.49, If we annualized it = 13.17, therefore 216/13.17 = 16.4x P.E

Hence, the company is asking P.E ranging between 16.4x to 22.6x

Listed peer

Only one listed peer, SIS Limited trading at a P.E of 18.8x

So, considering all these factors the IPO price is reasonably priced

CMS Info Systems IPO good or bad? (review)

CMS Info Systems Limited is India’s largest cash management company based on the number of ATM points and a number of retail pick-up points. The company has a pan India market share fleet of 3,965 cash vans and a network of 238 branches and offices based on the numbers as of August 31, 2021, Also the Financials of the company are good with consistent growth in profits and stable revenue over the past three years.

Considering the company’s business model, it has a wide scope as ATMs will grow more and ATM penetration in India will increase in the rural sectors with increased awareness.

After analyzing all its positive and negative factors investors can look for medium to long-term investment in the company, and always keep tracking the company’s financials.

Moreover about the listing gains, hence there is yet no GMP available it is hard to define its listings.

Rating: 4 out of 5.
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FAQ

1. How much retail quota is there in CMS Info Systems IPO?

QIB Shares Offered-Not more than 50% of the offer
Retail Shares Offered-Not less than 35% of the offer
NII (HNI) Shares Offered-Not less than 15% of the offer

2. What is the pre and post-promoter holding in CMS Info Systems IPO?

Pre Issue Share Holding100%
Post Issue Share Holding 65.59%

3. How to apply for CMS Info Systems IPO?Steps to apply in CMS Info Systems IPO through Zerodha

Visit the Zerodha website and log in to Console.
Go to Portfolio and click the IPOs link.
Go to the ‘Medplus Health IPO’ row and click the ‘Bid’ button.
Enter your UPI ID, Quantity, and Price.
‘Submit’ IPO application form.
Visit the UPI App (net banking or BHIM) to approve the mandate.

4. What is the minimum bid amount in CMS Info Systems IPO?

65 shares x Price Rs 216 = Rs 14,040

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