The CMS Info System failed to get impressive gray market premiums and public problems to see lukewarm response from investors.
It was the 65th and final initial public offering (IPO) from 2021. The problem was closed by subscribing 1.95 times over December 21-23.
All kinds of investors participated in the list but the request was very low. The section set aside for retail investors subscribing 2.15 times and qualified institutional buyers have bid 1.98 times the quota provided, the part set aside for non-institutional investors booked 1.45 times.
Experts felt all problems being offers for sale by promoter Sion Investment Holdings Pte Limited received response muted from investors and low gray market premiums. Market volatility over the past few months, a warm list of the last few problems and tightening the Fed stimulus was added to misery.
CMS Info Systems is the largest cash management company in India based on the number of ATM points and the number of retail pick-up points in the end of March 2021, and one of the largest cash management companies throughout the world.
“Despite the dominant position in the domestic value chain, the IPO cannot produce sufficient interests among investors. Overall this problem subscribes to 1.95 times, which is significantly lower than the trend seen in the IPO recently,” recognizing Rajnath Yadav, research analyst at Choice Broking.
He further said that volatility in the secondary market, abnormal listings of several latest IPOs, and global signals such as fears about inflation and tapering faster than estimates and air from interest rates have played a role in making Hazewarm market response.
CMS info system traded at Rs 221 per share in the Gray Market, Rs 5 or 2.3 percent premium above and above the expected end price from Rs 216 per share, according to the IPO watch. This will make his debut on the stock on December 31.
The CMS info system has collected Rs 1,100 Crore from public problems. Being fully offered by the promoter, the company will not receive money from the results, and all money, in addition to paying costs, will go to sell shareholders.
Mohit Nigam, Head – PMS in Hem Securities highlights six reasons that affect the IPO subscription from the CMS Info System.
“First, his business depends significantly on the use of cash but RBI plans to introduce the digital currency that will have an impact on the amount of cash circulating. Second, the company’s business is very dependent on the banking sector in India and, every detrimental development in connection with banks India can have a negative impact on the utilization and demand for cash management services, “he said.
The top five customers contributed 55.73 percent of total income on FY2021, and exposed to various operational risks because they handled a large amount of cash, each of which was the third and fourth reasons.
“Fifth, business success depends on their ability to effectively deploy, apply and use the information technology system and advanced technology initiative with cost-effective and timely costs. Sixth, this offer is entirely and the results of this offer will not be available for the company,” Nigam said.
The company’s cash management service business contributed 68.61 percent to income in TA21 and the contribution of the business managed business for income at FY21 was 27.88 percent.
It recorded a higher profit at RS 168.52 Crore for the year ended March 2021, up from Rs 134.7 Crore per year ago, but revenue seems to have been affected by Covid-19, falling to RS 1,306.09 Crore from RS 1,383 , 23 crore. It recorded RS 84.47 Crore’s profit at RS 626.29 Crore’s revenue for five months to 2021.
Infosystems CMS is also supported by promoters, Zion Investment Holdings Pte Limited, Affiliate Private Archives of Equity Asia, a private equity company that has assets of more than $ 27 billion under management as of June 2021.