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Market regulator Securities and Exchange Board of India has issued final observations on the draft papers filed by CMS Info Systems to raise 2,000 crore via initial public offering (IPO). The observations were issued last week on October 29, 2021, the watchdog mentioned in a statement. This is the final step before the company can float its IPO.

CMS Info Systems had filed draft red herring prospectus (DRHP) on August 14, 2021. After receiving the final observations from SEBI, or approval in common parlance, the Baring Private Equity-backed company will be allowed to file the red herring prospectus for its initial public issue.

The IPO consists entirely of an offer for sale of up to 2,000 crore by Sion Investment Holdings Pte, an affiliate of Baring Private Equity Asia. Currently, Sion Investment Holdings holds 100 per cent stake in the firm.

CMS offers ATM and cash management, ATM installation, maintenance and card personalisation services. Over the past decade, the company has been owned first by Blackstone, which took a controlling stake in 2008. Later, it was taken over by Baring, which bought the company in 2015 for about 2,000 crore. 

Baring had attempted to take CMS public once before. In 2017, it had filed draft papers with the markets regulator, but let its 12-month approval period lapse without launching the IPO.

The firm operates its business in three segments; Cash management services which include end-to-end ATM replenishment services; cash pick-up and delivery; network cash management and verification services; and inter-branch and currency chest cash-in-transit services for banks. On average, CMS manages 5,000 crore of cash a day in India.

Managed services, which include banking automation product sales and service sale; end-to-end brown label ATM and managed services for banks; common control systems and multi-vendor software solutions; as well as remote monitoring for ATMs and bank branches.

Others, which include end-to-end financial cards issuance and management for banks and card personalization services.

For FY21, its total income stood at 1,321.92 crore against 1,388.29 crore a year ago. Net profit for the period was at 168.52 crore versus 134.71 crore last year. The firm provided services to its customers though pan-India fleet of over 3,911 cash vans, 224 branches and offices and it serviced 133,458 business points.

Axis Capital, Dam Capital Advisors, Jefferies India and JM Financial are the book running lead managers to the issue.

 

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