NSE to fully divest 37.5% stake in CAMS1 min read . Updated: 16 Sep 2020, 01:56 PM IST
The share sale will be open for subscription from 21-23 September. The IPO will see NSE Investments Limited, completely exiting its 37.48% stake in CAMS.
MUMBAI : NSE Investment Ltd is completely divesting its stake in Computer Age Management Services (CAMS), India’s largest registrar and transfer agent of mutual funds, through an initial public offering (IPO), taking advantage of a recovery in equities after covid-led disruptions. At present, NSE Investment Ltd, a wholly owned subsidiary of NSE, holds a 37.48% stake in CAMS.
The IPO will be open for subscription on 21-23 September at a price band of ₹1,229-1,230 apiece. The company aims to raise ₹2,242 crore through the IPO, proceeds of which will not be received by CAMS. Other marquee shareholders in CAMS are Great Terrain, an affiliate of Warburg Pincus, which holds 43.50%, and HDFC, and HDFC Bank with 5.99% and 3.33%, respectively.
Markets have risen sharply from the March lows, but in the last few months, inflows into equity mutual fund schemes dried up with a steady decline in systematic investment plan investments amid redemption pressures. However, some analysts said the CAMS IPO will draw good investor interest.
“Earnings are generously distributed among shareholders. It reports return on equity of more than 25%. Considering a healthy balance sheet, high return ratio, and market leadership position, the IPO will see strong interest across market participants," said Jaikishan Parmar, senior equity research analyst, Angel Broking Ltd.
NSE’s plans to divest its entire stake in CAMS follows a Securities and Exchange Board (Sebi) directive. In February, the NSE had received a letter from Sebi stating that it did not seek the regulator’s permission to acquire a stake in CAMS in 2013, through its wholly owned subsidiary NSE Investments Ltd, formerly NSE Strategic Investment Corp. Ltd. This was in violation of Stock Exchange and Clearing Corporation Regulations. Sebi had directed NSE to divest its entire stake in CAMS within a year and withdraw its directorship in CAMS.
“Our selling shareholder has been directed by Sebi to divest its entire shareholding in the company," CAMS said in its red herring prospectus.
Earlier in January, when CAMS filed its draft prospectus with Sebi, NSE planned to divest just one-third of its stake through the IPO.
Kotak Mahindra Capital Company Limited, HDFC Bank Limited, ICICI Securities Limited and Nomura Financial Advisory and Securities (India) Pvt. Ltd are the book running lead managers to the issue.