Cash management company CMS Info Systems on Thursday said it has fixed a price band of Rs 205-216 a share for its Rs 1,100-crore initial public offering (IPO) that opens next week.
The initial share-sale will open for public subscription on December 21 and close on December 23.The bidding for anchor investors will open on December 20. The company has cut its IPO size to Rs 1,100 crore from Rs 2,000 crore earlier.
Talking about the company's business, CMS Info Systems Executive Vice Chairman and CEO Rajiv Kaul said the company had logged a 21 per cent growth in revenue at Rs 1,383 crore in the year preceding COVID-19, but saw its topline decline by 6 per cent to Rs 1,306 crore during FY21.
''...In a year of COVID-19, where consumption and mobility got disrupted, economic growth went down, we were able to arrest the decline of our revenue to just 6 per cent, which is a strong testament to the diversification of our businesses, as well as the strength of our business model,'' he added.
Kaul said the company's revenue in the first five months of the ongoing fiscal (FY22) stood at Rs 626 crore. Of this, cash management services contributed Rs 418 crore, managed services was Rs 192 crore and Rs 16 crore from others.
''...(this) is in a period where we had the COVID-19 wave two but if you were to extrapolate this revenue over 12 months, that will still be a 15 per cent growth over FY21,'' he said adding that the CMS had Rs 307 crore of cash on its books at the end of FY21.
Kaul said CMS has built service lines across all elements of cash cycle and sees massive opportunities ahead as banks outsource more.
''Our growth playbook is fairly straightforward. There is a growing cash cycle, currency in circulation in India is Rs 30 lakh crore... Within the cash cycle, there's a lot of outsourcing going on - from what banks did and which is now being given to outside high-quality players...we can offer a compelling value proposition to clients in terms of the lowest cost or highest quality or the best network density, but maintain our profitability levels and continue to grow,'' Kaul said.
He added that CMS will keep examining opportunities to expand ''at the right time with the right approach''.
''...That approach could be organic, where we build it in-house or it could be inorganic, where we go and acquire a company with an offering that we can scale and improve the offering to the customer,'' he noted.
In its RHP, CMS said the cash management industry in India has continued to consolidate in recent years, with a number of large and medium scale mergers and acquisitions in the industry. In 2011, CMS acquired SIPL for the amount of Rs 1199.34 million, consolidating its position as the leading cash management services company in India.
In 2017, CMS had taken over the business of a mid-sized cash management company for the amount of Rs 16.65 million that helped increase the number of ATMs for which CMS provides cash management services.
In 2018, CMS also strengthened its retail cash management business by acquiring the retail cash management business of a cash management company in India for the amount of Rs 361 million, and in 2020, it acquired Logicash for the amount of Rs 112.41 million to further grow its ATM cash management business.
''A key part of our business strategy is also acquiring and incubating new businesses and scaling them up where we identify opportunities for potential growth,'' the RHP said.
CMS' public issue is a pure offer for sale by promoter Sion Investment Holdings Pte Limited, an affiliate of Baring Private Equity Asia. Sion Investment, which acquired CMS in 2015, holds 100 per cent stake in the company at present.
Half of the issue size has been reserved for qualified institutional buyers (QIBs), 35 per cent for retail investors and 15 per cent for non-institutional investors. Investors can bid for a minimum of 69 equity shares and in multiples thereof.
CMS provides cash management services, which include ATM services, and cash delivery and pick-up. Its integrated business platform is supported by customised technology and process controls, which enables it to offer customers a wide range of tailored cash management and managed services solutions.
It caters to a broad set of outsourcing requirements for banks, financial institutions, organized retail and e-commerce companies in India. It operates business in three segments -- cash management services, managed services and others.
This will be the company's second attempt to go public. Earlier in 2017, it had filed draft papers with Sebi and had obtained the regulator's clearance to launch the IPO. However, the company did not launch the public issue.
Axis Capital, DAM Capital Advisors, Jefferies India, and JM Financial are the book running lead managers to the issue.
The equity shares of the company will be listed on BSE and NSE.
The other cash management and allied technology companies that have filed for IPO are, AGS Transact Technologies, India1 Payments and Radiant Cash Management Services.
(With inputs from PTI)