Warburg Pincus-backed CAMS sees 29% grey market premium ahead of IPO
Source : Economic Times
NEW DELHI: The IPO details of Warburg Pincus LLC and NSE-backed Computer Age Management Services (CAMS) will be announced on Wednesday, but the grey market investors are already gung ho on the forthcoming issue.
The grey market so far is expecting a price band of Rs 1,200-1,240 and based on that, the unlisted shares of CAMS are trading at a premium of Rs 350-360 in the unlisted market. The upper limit of the price range suggests an issue size of nearly Rs 2,260 crore.
“CAMS is commanding a grey market premium of Rs 350-360. This is based on a price of Rs 1,230,” said Sagar Shah of Ascent Wealth Managers. Dinesh Gupta of Unlisted Zone sees a similar grey market premium of Rs 358-362 levels. He sees the price band in the Rs 1,200-1,240 range.
The Rs 360 grey market premium means a 29 per cent premium over the projected price of Rs 1,240.
While a report suggests the issue size of the IPO to be anywhere between Rs 1,500-1,600 crore, a source told ETMarkets.com that it could be in the range of Rs 2,100-2,400 crore and the issue might be launched on Monday.
This is because the revised prospectus filed with Sebi on Tuesday suggested that the issue would be an offer for sale (OFS) of 1.82 crore or 1,82,46,600 equity shares by NSE Investments (NSEIL). In a draft prospectus filed with Sebi on January 9, the company had suggested an offer for sale of lesser number of shares (1,21,64,400 shares), which included offer of up to 41,44,600 shares by Great Terrain, up to 60,99,876 shares by NSEIL, up to 9,44,724 shares by Acsys, up to 4,87,600 shares by HDFC and up to 4,87,600 shares by HDB Trust.
NSEIL held 37.5 per cent stake or 1,82,85,000.00 shares in CAMS as of March 31, 2019, as per NSE’s Annual Report FY2019-2020. A source told ETMarkets.com that OFS shares were the maximum NSE could offer in the issue. The remaining shares will be diluted before the OFS itself.
CAMS is a technology-driven financial infrastructure and services provider to mutual funds and other financial institutions. The company is India’s largest registrar and transfer agent of mutual funds with an aggregate market share of approximately 70 per cent based on mutual fund average assets under management.
The company shareholders included Great Terrain, which is an affiliate of Warburg Pincus.
Based on AAUM serviced, the company has grown its market share to 69 per cent in March 2020 from 61 per cent in March 2015 as per CRISIL. The issue is being managed by Kotak Mahindra Capital, HDFC Bank, ICICI Securities and Nomura Financial Advisory and Securities (India).
Sebi had in February directed NSE to divest its entire stake in CAMS within a period of 1 year. It also asked NSE to withdraw its directorship in CAMS and not to exercise voting rights and avail any corporate benefits in respect of the shareholding, as it felt NSE should have obtained prior permission from Sebi for acquisition of stake in CAMS, an associate company, through its wholly owned subsidiary NSE Investments Limited in FY14.