CAMS, Chemcon IPOs get bumper investor response1 min read . Updated: 24 Sep 2020, 06:11 AM IST
The ₹2,244-crore IPO of CAMS was subscribed 47 times on the final day of the offering, while the ₹318 croreIPO of Chemcon Specialty Chemicals was subscribed 149.14 times
Computer Age Management Services (CAMS) and Chemcon SpecialityChemicals Ltd successfully closed their initial public offerings (IPOs) on Wednesday, highlighting abundant liquidity in the equity market that has seen a sharp increase in new retail investors in 2020.
The share sales sailed through easily despite choppy stock markets this week. The Sensex is down 3% since Monday, having closed in the negative territory on all the three days of the week so far.
The ₹2,244-crore IPO of CAMS was subscribed 47 times on the final day of the offering, while the ₹318 croreIPO of Chemcon Specialty Chemicals was subscribed 149.14 times.
The CAMS IPO received bids for 600 million equity shares against an offer size of over 12.8 million shares, excluding anchor book, stock exchange data showed. The retail quota was subscribed 5.4 times. The non-institutional investor segment saw 111.85 times subscription, while the qualified institutional buyers’ portion was subscribed 73.18 times.
On the other hand, the Chemcon share sale received bids of 976 million shares against the 650,000 shares on offer. The portion reserved for retail investors was subscribed 40.4 times. Non-institutional investor category was subscribed 450.5 times, while the portion for institutional investors was subscribed 113.4 times.
The price band for CAMS IPO was fixed at ₹1,229-1,230.
“At ₹1,230 per share, CAMS is priced at 35 times FY20 earnings per share (EPS), at a 10-15% discount to listed AMCs, exchanges and depositories," said IIFL Securities. The domestic brokerage firm expects the stock to trade in-line with other comparables and further re-rate.
“In our view, premium valuations are justified given dominant market share in a growing industry, low risk of competition, strong parentage, strong free cash flow generation, and robust return on equity (RoEs)," it said in a note on 18 September.
NSE Investments, which holds 18.25 million shares in CAMS, is selling its entire 37.4% stake through the IPO, following a directive from the Sebi to exit the company.
Kotak Mahindra Capital Company Ltd, HDFC Bank Ltd, ICICI Securities Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd were the book running lead managers to the CAMS issue.