Anand Rathi: CAMS IPO - Investment Rationale

Anand Rathi Report

Incorporated in 1988, Computer Age Management Services Ltd. has come a long way to become the largest registrar and transfer agent (RTA) of mutual funds in India, with an aggregate market share of about 70% based on mutual fund average assets under management (AAUM).

The company is technology-driven financial infrastructure and services provider to mutual funds and other financial institutions.

Through its pan-India network (comprising 271 service centers spread over 25 states and five union territories) to mutual fund clients, distributors and investors, CAMS offer an array of services including transaction origination interface, transaction execution, payment, settlement and reconciliation, dividend processing, investor interface, report generation and brokerage computation and compliance related services.

Also, it provides certain services to alternative investment funds and insurance companies.

Valuation - At upper price band of Rs 1,230, the IPO is priced at 34.6 times FY20 earning per share and 36.7 times FY21 EPS (annualized).

While currently there is no listed player to compare, we believe the IPO is reasonably priced considering the latest numbers.

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