CAMS IPO opens today with share prince band of 1229 – 1230 and this issue closes at 23rd Sep.
Chennai Head quartered CAMS is India’s Largest RTA with 70% of Market Share with more than 2 decade of experience. Their Mutual Funds clients includes 4 out of 5 largest Mutual Funds in India and 9 out of 15 Largest Mutual Funds with Huge Assets Under Management
CAMS have well diversified portfolios with largest pan India physical network, Risk Management and Domain Expertise.
Strengths of CAMS
- Long standing relationship with Largest Mutual Fund Companies
- Scalable Technology eco system
- Maintaining the leadership position with largest market share
- Healthy Financials over FY 17 to 20 – Their EBITDA, Profit after tax are growing at a 14%, 13% and 12%
- Balance sheet is also healthy with zero debt and negative working capital
- Impressive Return Ratios of ROE and ROCE with 35% and 37%
Risk Area alert
- As a RTA they are always under the purview and audit of SEBI and AMFI
- Non compliances can cost more for the company
- CAMS derive major revenues only from top 5 clients – Slippage of one or more client my affect company profit
Conclusion
With the company leadership positions integrated business model, Pan India Geographic presence and healthy financials – I recommend this IPO for both listing gains and as a long term investment
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Sathish Kumar
Equity Fund Manager | Wealth Consultant | Author
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