Mumbai. Computer Age Management Services Pvt. Ltd (CAMS), a registrar and transfer agent serving 16 mutual funds in India, on Thursday, filed the draft red herring prospectus (DRHP) for its upcoming initial share sale.
The initial public offer (IPO), a pure offer for sale, would see its promoter— global private equity (PE) investor Warburg Pincus Llc’s investment vehicle Great Terrain Investment Ltd, along with other shareholders—NSE Investments Ltd, a unit of the National Stock Exchange Ltd; Acsys Investments Pvt Ltd; India’s largest private mortgage lender Housing Development Finance Corp. Ltd (HDFC) and HDB Employee Welfare Trust, offload 12.16 million shares.
A portion of 1.82 lakh shares is reserved for the employees at CAMS.
“The existing shareholders of the company are looking to raise ₹1,500 via the IPO," a person aware of the development told Mint, requesting anonymity.
While Warburg Pincus Llc holds the largest stake of 43.53% in the Chennai-based company, NSE Investments holds 37.5%, HDFC holds 5.99%, HDB Trust holds 3.19% and Acsys holds 1.94%, according to its draft prospectus.
The book-running lead managers to the issue are Nomura Financial Advisory and Securities (India), Kotak Mahindra Capital, ICICI Securities and HDFC Bank.
Founded in 1998, CAMS claims to be India’s largest registrar and transfer agent (RTA) with a market share of 69.4%, based on mutual fund average assets under management (AAUM), as of November 2019. During the period, it served ₹18.7 trillion of AAUM of 16 mutual fund clients, according to its DRHP.
The Securities and Exchange Board of India-regulated entity processes mutual fund transactions and maintains investors’ records. It offers physical touch points for receipt, verification and processing of financial and non-financial transactions. The company also offers back-end services to mutual fund houses for subscription, redemption, systematic investment plans, transfer and dividends.
Its key clients for the mutual funds services business include HDFC Asset Management Company Ltd, ICICI Prudential Asset Management Company Ltd, Aditya Birla Capital Ltd, SBI Fund Management Private Ltd, DSP Investment Managers Pvt Ltd and Kotak Mahindra Asset Management Company Ltd. For the six months ended September 30, 2019, its top five clients contributed 65.8% of the total revenue from operations.
For the half year ended 30 September 2019, the firm’s total income stood at ₹360 crore, compared to ₹351.9 crore in the corresponding period in the previous fiscal. Its profit rose to ₹82.7 crore from ₹63.2 crore, during this period.
For the six months ended September 30, 2019, the firm’s revenue from its mutual funds services business stood at 87.4%, while the remaining came from its other business lines such as electronic payment collections services, insurance services, alternative investment funds services, banking and non-banking services, KYC (know-your-customer)registration agency and its software solutions business.
The company operates through a pan-India physical network, comprising 278 service centers spread over 25 states and five union territories in India, as of 30 September, 2019. The company also runs call centers in four major cities and four back offices, of which three are in Chennai and one in Coimbatore (also a disaster recovery site).
It had 4,314 permanent employees and 2,136 contractual employees, as of 30 September, 2019, according to its draft prospectus.