Angel Broking: CAMS IPO - Outlook And Valuation

Angel Broking Report

Computer Age Management Services Ltd. is India’s largest registrar and transfer agent (RTA) of mutual funds with an aggregate market share of approximately 70% based on mutual fund average assets under management (AAUM) managed by its clients and fastest growing RTA for last five years.

CAMS is responsible for entire back end work of its mutual fund clients i.e. from account creation to processing to redemption and also provides statutory statements, transaction origination, operations, investor and distributor services, risk management services and compliance services.

For all the above service, CAMS charges fees of 0.036% (FY20) on asset under management managed by its clients.

All 41 mutual funds outsource back end/operational work to RTA.

Issue details -

This IPO is purely on offer for sale and the issue is worth Rs 2,242 crore. Of this issue worth Rs 22 crore, 1,82,500 shares are reserved for employees of CAMS.

National Stock Exchange Investment, an arm of NSE, will be the only selling shareholder under the IPO.

Notably, the markets regulator in February had directed NSE to divest its entire 37.5% stake in CAMS within a year.

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