CMS Info Systems Limited

CMS Info Systems Limited is India's largest cash management company based on number of ATM points and number of retail pick-up points as of March 31, 2021, as well as one of the largest ATM cash management companies worldwide based on number of ATM points as of March 31, 2021. Its business includes installing, maintaining and managing assets and technology solutions on end-to-end outsourced basis for banks under long term contracts. Company caters to broad set of outsourcing requirements for banks, financial institutions, organized retail and e-commerce companies in India. The business operates in 3 segments; 1. Cash management services: Which include end-to-end ATM replenishment services, cash pick-up and delivery, network cash management and verification services.2. Managed services: Which include banking automation product sales, deployment and associated annual maintenance, end-to-end Brown Label deployment and managed services for banks, common control systems and software solutions, including multi-vendor software solutions and other security and automation software solutions, as well as remote monitoring for ATMs and 3. Others: Which include end-to-end financial cards issuance and management for banks and card personalisation services. Company has pan-India fleet of 3,965 cash vans and the network of 238 branches and offices, which as of August 31, 2021 cover all of India's states and union territories, except remote union territory of Lakshwadeep, 97.04% of India's 742 districts and 14,949, or 77.46%, Indian postal codes. Through the network, they served 1,41,977 business points across the ATM cash management, retail cash management and managed services businesses as of August 31, 2021. As per financial performance, CMS Info Systems Limited has posted total income/net profits of Rs 1,159.32 Cr / Rs 96.14 Cr (FY19), Rs 1,388.29 Cr / Rs 134.71 Cr (FY20), Rs 1,321.92 Cr / Rs 168.52 Cr (FY21) and Rs 629.72 Cr / Rs 84.47 Cr (5M FY22). So company has posted average top-line growth, but good bottom-line  growth over last couple of years. They have posted an average EPS of Rs 9.81 and average RoNW of 15.99% for last 3 fiscals. Issue is priced at a P/BV of 3.02 as per NAV of 71.58 on 31.08.21. If we attribute latest earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 18.99 and if we annualise 5M FY22, then on fully diluted equity post issue p/e is 15.77 which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, four lead managers are associated with this IPO, and have handled around 71 IPOs in last three fiscals. From last 10 IPOs, three is opened below issue price and remaining are opened above issue on the day of listing. As of now, four are trading below issue price and other are trading above issue price. ( As on 16.12.21 ) As per financials, CMS Info Systems Limited has shown good results, RoNW 17.12% and P/E is respectively 19 and 16 as per FY21 and annualised FY22 earnings, so issue looks fairly priced. BHARAT is under-penetrated market for financial services, and we will see improvements in future. Also economy is moving towards cashless-economy and also GoI is very keen for this. So it may be possible, that growth may be slow specifically in Cash Management Service. Performance of BRLM is average, so we give SUBSCRIBE rating to this IPO.

• 1 Sion Investment Holdings PTE. Limited