CAMS IPO to open on September 21; NSE to sale its 37% stake via public offering

Computer Age Management Services (CAMS), the registrar and transfer agent of mutual funds, will launch its initial public offering (IPO) on September 21, 2020. The booking for anchor investors will open for a day on September 18, while for retail investors it will open on September 21 and close on September 23. The equity shares of CAMS will be listed on the BSE.

The public issue consists of an offer for sale of 1.82 crore equity shares by NSE Investments, which intends to offload its entire stake of 37.48 per cent in its associate company CAMS via IPO. The offer also includes a reservation of 1,82,500 equity shares for eligible employees, as per the draft red herring prospectus filed with the Sebi.

NSEIL, the subsidiary of National Stock Exchange (NSE) owns 37.48 per cent stake in CAMS, followed by 5.99 per cent by HDFC, 3.33 per cent by HDFC Bank, 3.19 per cent by HDFC Trust, 4 per cent by Faering Capital India and 1.94 per cent by Acsys. Great Terrain, owned by Harmony River Investment, is the promoter of CAMS with 43.53 percent shareholding.

Earlier in February this year, market regulator SEBI had directed NSE to divest its complete stake in CAMS to meet regulatory norms. Sebi had observed that NSE had not taken prior regulatory approval while acquiring a stake in CAMS in FY14 and hence the investment was in violation of the rules for market intermediary institutions (MIIs).

In compliance with Sebi norms, NSE intends to divest its entire shareholding, held through NSE Investments, in CAMS by way of sale and transfer of 1,82,46,600 equity shares pursuant to the offer; and the balance 38,400 equity shares pursuant to the NSE Investments SPA (share purchase agreement), as per its red herring prospectus.

The price band for the issue is expected to be in the range of Rs 1,100-1,200 per share. The shares will have a face value of Rs 10 per share. CAMS will not receive the IPO proceeds as this is an offer-for-sale and not a fresh issue.

According to Chittorgarh.com, IPO investment portal, the higher end of IPO price band could be Rs 1,230 per share and the issue size will be around Rs 2,258 crore. The market lot of IPO will be 12 shares, which means investors can bid for minimum 12 equity shares and in multiples of 12 equity shares thereafter.

Meanwhile, grey market is expecting a price band of Rs 1,200-1,240 for the IPO and based on this, the unlisted shares of CAMS traded at premium of Rs 350-360 in the unlisted market.

Kotak Mahindra Capital, HDFC Bank, ICICI Securities and Nomura Financial Advisory and Securities will be the lead managers to the issue.

By Chitranjan Kumar

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