CMS Infosystems was started in 2008. It was established as Subhiksha Realty Private Limited on its inception. Later on, in 2009, the CMS Infosystem – a part of its Computers IT infrastructure management division was demerged from the company. The Demerged company was taken by the Famous Blackstone Group, which sold their whole control to the Sion Investment Holdings Pte. Limited. In this article, we take a closer look at the CMS Info Systems IPO Review and its possible future prospects.
Now the company is currently engaged in Four major verticals through their business. The company operates on a specialized technology with proper procedure controls. It enables them to provide services of:
| ATM and cash management | Under it the company carries out the operation of end-to-end ATM replenishment services, verification services, cash pick-up and delivery |
| Card personalisation services | |
| ATM installation, maintenance | |
| Banking Assistance Service | Under it the company carries out Banking automation, Brown label ATM management, Multi-Vendor Software Solutions, Remote monitoring for ATMs along with the bank branches |
CMS Infosystems has a fleet of 224 branches with 3,911 cash vans. In addition, it operates around 133,458 business points. The company has established a Pan India presence with its branches and business points.
OBJECTS OF THE CMS INFO SYSTEMS IPO ISSUE:
- Prepayment of all the loans of the company, which be availed on a consolidated basis.
- To meet corporate targets.
- To fund the working capital requirement.
BASIS OF THE OFFER:
- The company is in the position of Market leader in their sector.
- The company has strong fundamentals irrespective of being in a highly competitive business environment.
- The company has a pan-India presence. It is also focusing on strengthening its reach in emerging areas.
- The company has a diversified service portfolio backed by a strong operational business model.
- The company in the past has exhibited strong financial and operational performance. It signifies the efficiency and the productivity of the company.
- The company has an experienced and excellent team of Management, Directors, and Promoters of the company.
CMS INFO SYSTEMS IPO:
CMS Info Systems Limited, a cash management company has its headquartered in Navi Mumbai. Recently the company has filled up for their DRHP and is waiting for approval from SEBI to float their IPO in the market. The company has brought the IPO forward as per their DRHP includes no issue of fresh equity. The IPO only includes OFS of Rs. The promoters of the company have brought forward 2000 Crores. Check Day by Day IPO Subscription Details (Live Status)
| IPO Opening Date | Dec 21, 2021 |
| IPO Closing Date | Dec 23, 2021 |
| Issue Type | Book Building Type |
| Face Value | Rs.10 / Equity Share |
| IPO Price | ₹205 to ₹216 per equity share |
| Market Lot | 69 Shares |
| Min Order Quantity | 69 Shares |
| Listing At | BSE, NSE |
| Issue Size | Rs. 2000 Crores |
| Fresh Issue | Nil |
| Offer for Sale | Rs. 2000 Crores |
| Basis of Allotment Date | Dec 28, 2021 |
| Initiation of Refunds | Dec 29, 2021 |
| The Credit of Shares to Demat Account | Dec 30, 2021 |
| IPO Listing Date | Dec 31, 2021 |
| Basis of Allotment Type | % Of Offer allotment for the IPO |
| Qualified Institutional Buyer | 50 |
| Non-Institutional Investor | 15 |
| Retail | 35 |
Also Read : List of Mainboard IPO’s in India.
FINANCIAL TRENDS:
| Particulars | For the year ended the amount in Crore | ||||
| 31-Aug-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | ||
| Total Assets | 15,780.86 | 1,611.81 | 1,332.74 | 1,092.70 | |
| Total Revenue | 6,297.23 | 1,321.92 | 1,388.29 | 1,159.32 | |
| Profit After Tax | 844.70 | 168.52 | 134.71 | 96.14 |
| PARAMETERS | MARCH 21 | MARCH 20 | YoY % |
| Core EBITDA Margin (%) | 22.48 | 18.36 | 22.47 |
| EBIT Margin (%) | 18.83 | 14.63 | 28.73 |
| Pre-Tax Margin (%) | 18.20 | 14.10 | 29.08 |
| PAT Margin (%) | 12.90 | 9.74 | 32.49 |
| Cash Profit Margin (%) | 17.76 | 13.83 | 28.43 |
| ROA (%) | 11.65 | 11.39 | 2.26 |
| ROE (%) | 18.37 | 16.88 | 8.84 |
| ROCE (%) | 26.81 | 25.36 | 5.74 |
| Asset Turnover(x) | 0.90 | 1.17 | -22.82 |
| Sales/Fixed Asset(x) | 1.64 | 2.03 | -18.88 |
| Working Capital/Sales(x) | 2.80 | 3.30 | -15.06 |
| Fixed Capital/Sales(x) | 0.61 | 0.49 | 23.28 |
| Receivable days | 95.51 | 77.14 | 23.81 |
| Inventory Days | 18.52 | 11.17 | 65.73 |
| Payable days | 105.58 | 69.42 | 52.09 |
| Sales Growth (%) | -5.58 | 20.68 | -126.96 |
| Core EBITDA Growth (%) | 19.49 | 22.68 | -14.05 |
| EBIT Growth (%) | 21.55 | 28.59 | -24.64 |
| PAT Growth (%) | 25.10 | 40.12 | -37.43 |
| EPS Growth (%) | 25.10 | 40.12 | -37.43 |
| Total Debt/Equity(x) | 0.00 | 0.00 | 0.00 |
| Current Ratio(x) | 1.91 | 2.05 | -6.90 |
| Quick Ratio(x) | 1.73 | 1.94 | -10.70 |
| Interest Cover(x) | 29.88 | 27.67 | 8.01 |
WEAKNESS AND THREATS OF CMS INFO SYSTEMS IPO:
- The growth of digitalization, which has shifted people from Cash Payment to Digital Payment, can affect the company’s business operation.
- The COVID-19 has hit the company badly. It has led to a substantial negative impact on the company.
- The company’s large amount of revenue comes up from small clients.
- Th company is highly vulnerable to theft, fraud, armed robbery, and any criminal act.
- The company is engaged in the business where the RBI, GoI, regulates them. As a result, the company needs to follow strict guidelines and regulations.
- The company, its directors, and the company’s promoters are currently under trial for a legal procedure.
- The company can also incur negative effects due to the slowdown of ATMs and expansion of other modes of payments such as Digital transactions, Card Payments, etc.
- The company needs to adjust to changing laws and regulations. Also, any policy change by the regulatory authorities that hurts their operation could hamper the company’s business outlook.
- The company is engaged in a guaranteed fee-based business operation. If they weren’t satisfied with the set terms or acquired income from these operations, it would hurt their business outlook.
- The company is engaged in a business that has a high working capital requirement.
- Any alterations in trade charges made by the NPCI, regardless of whether of planned guideline changes or in any case, may hurt the company’s business operation.
- The company is also vulnerable to failure in the case of Information and Cyber Security.
- For their desired CAPEX plan, the company has recently signed a contract for Brown Label ATM with remote monitoring. The company needs to execute its strategy properly as it is also under its guaranteed fee-based business operation.
- The company has registered a Decline in revenues along with the operating profitability margins.
- The company is dependent on the banks for their business operation. The Banks need to work with their MSP customers regularly, which determines the financial and operational parameters, including profitability, cash flows, and operating margins.
- The company is engaged in a highly competitive business environment. It needs to ensure that all their strategy and execution are perfect and adapt to the changing market pattern.
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STRENGTHS AND GROWTH ASPECTS OF CMS INFO SYSTEMS IPO:
- The company is one of the leading companies with a strong market share and PAN India presence. It is the largest cash management company in terms of operating ATM points and retail pick-up points.
- The company has a long-term, High-Value business association with its clients. It helps them maintain stability in the revenue, expand their core business, and expand in new revenue streams.
- The company provides a diversified service. It helps them gain insights into cross-selling opportunities in sync with the driving synergies across the different business horizons of the company. It has also started its services for Retail and E-Commerce Segments.
- The company holds good visibility upfront in terms of financial and operational levels.
- The company stated that they are increasing their exposure and resources in the digital payment sector. It will help the company face its biggest challenge and tackle it with a strategic growth plan.
- The company marks a healthy financial performance due to efficient working capital management, improved Debt/EBITDA margins, operating margins, and an excellent working capital structure. It helped them to gain better results in all of their business dimensions.
- The company has a healthy return indicator with zero debt and high protection of the Debt Coverage Indicator.
- The company in the past has exhibited strong financial and operational performance. It signifies the efficiency and the productivity of the company.
- The company has adequate Liquidity that is supported by its steady annual net accruals of cash. The company has a high cushion in their cash flows from their business operation. It helps them to raise additional long-term funds.
- The company has a strong association with its clients. It has many companies from different sectors as their clients. The company’s clients are Axis Bank, SBI, Citi Bank, HDFC Bank, ICICI Bank, Diebold System, Hitachi Payment Services.
- The company also recently won an order from SBI for setting up 5,000 ATMs along with the installation of the Multi-Vendor Software at all the ATMs of the SBI. It has also backed an HDFC Bank and ICICI Bank order to establish a Brown Label ATM setup. It shows the trust of the big banks in the company.
- Revenue Breakdown of the company in 2021 is as follows:
| Cash management services | 68.61 percent of their revenue |
| Managed services | 27.88 percent of their revenue. |
| Others | 3.51 percent of their revenue. |
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PROMOTERS:
- Sion Investment Holdings Pte. Limited
| Pre-Issue Share Holding | 100% |
| Post Issue Share Holding |
CONTACT DETAILS:
CMS Info Systems Limited
T-151, 5th Floor, Sector-11, Tower No. 10,
Railway Station Complex, CBD Belapur,
Navi Mumbai, Thane – 400614, Maharashtra
Tel: +91 22 4889 7400
E-mail: cms.ipo@cms.com
Website: www.cms.com
REGISTRAR:
Link Intime India Private Limited
C 101, 1st Floor, 247 Park
L.B.S. Marg, Vikhroli (West)
Mumbai – 400 083
Telephone: +91 22 4918 6200
E-mail: cmsinfo.ipo@linkintime.co.in
Website: www.linkintime.co.in
LEAD MANAGER(S):
- Axis Capital Limited
- DAM Capital Advisors Limited
- Jefferies India Private Limited
- JM Financial Limited
