Subscribe to Chemcon Speciality Chemicals: Anand Rathi

Anand Rathi's IPO report on Chemcon Speciality Chemicals

Incorporated in 1988, Computer Age Management Services Limited (CAMS) 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 5 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 and Outlook

At upper price band of ₹1,230, the IPO is priced at 34.6 times FY20 EPS 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. We remain optimistic on growth prospects of CAMS, given its leadership position in the market, scalable technology with robust infrastructure, strategic growth initiatives, high entry barriers in the industry and gradual growth in AAUM in the coming periods. We recommend Subscribe to this IPO.

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