Please refer to important disclosures at the end of this report
1
CMS Info System 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. 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, and organized
retail and e-commerce companies in India.
Positives: (a) Leading market player with strong fundamentals. (b) Strong Pan-India
network of 3,965 cash vans and 238 branches and offices. (c) Longstanding customer
relationships with increased business opportunities. (d) Integrated business platform
offering a range of products and services.
Investment concerns: (a) A decrease in the use of cash as the predominant mode of
payment in India. (b) Highly dependent on the banking sector in India. (c) Adversely
affected by the COVID-19 type pandemic. (d) Significant expenses in relation to
employee benefits and cash vans and transportation. (e) Derive a substantial portion
of revenue from a limited number of customers.
Outlook & Valuation: CMS Infosystems derives majority of its revenues by providing
various services to the banking sector. There is no comparable company in the listed
space which is exclusively engaged in the portfolio of business similar to the company.
However, SIS Ltd. provides cash management services, among other services, through
its joint ventures. At the higher end of the price band CMS would be trading at P/E
multiple of 19x FY21 EPS of `11.4 which would be at a slight premium to SIS.
Moreover CMS is primarily dependent upon the banking sector for most of its
revenues and has high client concentration with top three customers accounting for
44.6% of revenues for the first five months of FY2022. Moreover the company’s
business would be impacted in case we witness a third Covid wave in India. Given the
dependence on a single sector, high client concentration and possible impact on
business due to a third Covid wave we have a NEUTRAL recommendation on the IPO.
Key Finance
Y/E March (` cr)
FY2019
FY2020
FY2021
5MFY22
Net Sales
1,146.2
1,383.2
1,306.1
626.3
% chg
-
20.7
-5.6
-
Net Profit
96.1
134.7
168.5
84.5
% chg
-
40.1
25.1
-
EBITDA (%)
17.3
18.4
22.5
23.9
EPS (Rs)
6.5
9.1
11.4
-
P/E (x)
33.3
23.7
19.0
-
P/BV (x)
4.3
3.8
3.2
-
ROE (%)
12.9
15.8
17.1
-
ROCE (%)
13.5
16.4
17.7
-
EV/EBITDA
15.4
11.6
9.8
-
EV/Sales
2.7
2.1
2.2
-
Source: Company, Angel Research
NEUTRAL
Issue Open: Dec 21, 2021
Issue Close: Dec 23, 2021
Offer for Sale: `1,100 cr
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Promoters 65.6%
Others 34.4%
Fresh issue: NA
Issue Details
Face Value: `10
Present Eq. Paid up Capital: `148 cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: `148 cr
Issue size (amount): `1,100 cr
Price Band: ₹205 - ₹216
Lot Size: 69 shares and in multiple thereafter
Post-issue mkt. cap: * `3,034 cr - ** `3,196 cr
Promoters holding Pre-Issue: 100%
Promoters holding Post-Issue: 65.59%
*Calculated on lower price band
** Calculated on upper price band
Book Building
CMS Info Systems Limited
IPO NOTE
CMS Info Systems Limited
December 20, 2021
CMS Info Systems Limited | IPO Note
December 20, 2021
2
Company background
CMS Info Systems Limited (“CMS”) was incorporated on March 26, 2008. CMS is
India’s largest cash management company based on number of ATM points and
number of retail pick-up points, as well as one of the largest ATM cash
management companies worldwide based on number of ATM points as of March
31, 2021. It operates mainly in three business segments that are Cash
management service includes end-to-end ATM replenishment services, Managed
services includes banking automation product sales, deployment and associated
annual maintenance; and Other services includes end-to-end financial cards
issuance and management for banks and card personalization service.
As on August 31, 2021, company has pan-India fleet of 3,965 cash vans and the
network of 238 branches and offices. Company is supported by its’ Promoter-Sion
Investment Holdings Pte. Ltd, who acquired the company in 2015
Issue details
The IPO is made up of offer for sale upto ₹1,100.00 Cr by promoter with no fresh
issue.
No of shares
(Pre-issue)
%
(Post-issue)
%
Promoter
148,000,000
100%
97,074,074
66%
Public (others)
0
0%
50,925,926
34%
Total
148,000,000
100%
148,000,000
100%
Objectives of the Offer
To carry out an offer for sale of equity shares by promotors aggregating
upto Rs. 1,100 Cr.
To achieve the benefits of listing the equity shares on the stock exchanges.
Key Management Personnel
Shyamala Gopinath is the Chairperson of the Company and an Independent
Director of the company. . In the past, she has served as the Deputy Governor of
the RBI, chairperson of the advisory board on Bank, Commercial and Financial
Frauds and part-time non-executive director of HDFC Bank Ltd.
Rajiv Kaul is the Executive Vice Chairman, Whole Time Director and CEO of the
company. He has been associated with the company since July 1, 2009. He has
over 24 years of experience across technology, private equity and cash
management industry.
Jimmy Lachmandas Mahtani is the Non-Executive Director of the company. He has
over 21 years of experience in private equity and investment banking. He has been
associated with Baring Private Equity Asia (BPEA) since 2006 and currently serves
as a managing director of private equity investment team in India.
Ashish Agrawal is the Non-Executive Director of the company. He has been
associated with the company since August 27, 2015. He has over 24 years of
experience in private equity and investment banking. He currently serves as the
CMS Info Systems Limited | IPO Note
December 20, 2021
3
managing director of Baring Private Equity Asia, Mumbai. Prior to that, he was
associated with Lehman Brothers in Mumbai as a senior vice president and with
Bank of America in Chicago as a vice president.
Exhibit 1: Consolidated Profit & Loss Account
Y/E March (` cr)
FY2019
FY2020
FY2021
5MFY22
Total operating income
1,146.2
1,383.2
1,306.1
626.3
% chg
-
20.7
-5.6
-52.0
Total Expenditure
948.2
1,129.3
1,012.5
476.6
Purchase of traded goods
100.6
181.5
207.0
43.3
Decrease / (Increase) in inventories
-11.4
9.9
-27.3
28.0
Employee benefit expenses
213.5
219.4
201.6
90.5
Other expenses
645.6
718.7
631.3
314.9
EBITDA
197.9
253.9
293.6
149.7
% chg
-
28.3
15.6
-49.0
(% of Net Sales)
17.3
18.4
22.5
23.9
Depreciation& Amortisation
53.7
56.6
63.5
34.6
EBIT
144.2
197.3
230.2
115.1
% chg
-
36.8
16.6
-50.0
(% of Net Sales)
12.6
14.3
17.6
18.4
Finance costs
7.4
7.3
8.2
5.1
Other income
13.2
5.1
15.8
3.4
(% of Sales)
1.1
0.4
1.2
0.5
Recurring PBT
149.9
195.1
237.8
113.4
% chg
-
30.1
21.9
-52.3
Exceptional item
-
-
-
-
Tax
53.8
60.4
69.2
29.0
PAT
96.1
134.7
168.5
84.5
% chg
-
39.1
26.1
-49.8
(% of Net Sales)
8.4
9.7
12.9
13.5
Basic & Fully Diluted EPS (Rs)
6.5
9.1
11.4
5.7
Source: Company, Angel Research
CMS Info Systems Limited | IPO Note
December 20, 2021
4
Exhibit 2: Consolidated Balance Sheet
Y/E March (` cr)
FY2019
FY2020
FY2021
5MFY22
SOURCES OF FUNDS
Equity Share Capital
148.0
148.0
148.0
148.0
Other equity (Retained Earning)
597.9
702.4
836.5
911.4
Shareholders’ Funds
745.9
850.4
984.5
1,059.4
Total Loans
-
-
-
-
Other liabilities
76.7
82.5
113.6
130.1
Total Liabilities
822.6
932.9
1,098.1
1,189.4
APPLICATION OF FUNDS
Property, plant and equipment
80.4
120.6
189.7
222.1
Capital work-in-progress
0.4
2.9
22.7
18.8
Right-of- use assets
81.3
83.9
121.1
140.1
Goodwill
203.4
203.4
203.4
203.4
Other Intangible assets
16.4
18.3
19.0
16.2
Intangible assets under development
2.1
1.0
0.5
0.2
Current Assets
616.2
819.7
980.3
889.2
Inventories
41.6
43.0
89.5
56.5
Investments
11.6
56.6
112.3
61.5
Trade receivables
390.6
448.6
500.7
555.4
Cash and cash equivalents
122.0
159.1
133.5
89.8
Bank balances other than above
17.2
31.4
61.0
40.7
Other financial assets
1.8
2.8
4.1
5.9
Other current assets
31.4
78.1
79.2
79.4
Current Liability
270.1
399.9
513.7
388.6
Net Current Assets
346.1
419.8
466.6
500.6
Other Non-Current Asset
92.6
83.0
75.2
88.2
Total Assets
822.6
932.9
1,098.1
1,189.4
Source: Company, Angel Research
CMS Info Systems Limited | IPO Note
December 20, 2021
5
Exhibit 3: Consolidated Cash Flow Statement
Y/E March (`cr)
FY2019
FY2020
FY2021
5MFY22
Operating profit before changes
234.0
320.8
340.2
180.4
Net changes in working capital
-72.1
-57.3
-97.9
-152.2
Cash generated from operations
161.9
263.5
242.4
28.3
Direct taxes paid (net of refunds)
-60.1
-49.3
-56.9
-20.1
Net cash flow operating activities
101.8
214.2
185.4
8.2
Proceeds from sale of property
0.4
0.4
4.9
0.2
Purchase of property, plant and equipment
-31.3
-83.6
-55.1
-99.0
Purchase consideration
-39.1
-
-
-13.0
Investment in mutual funds
-281.4
-383.0
-335.7
-221.5
Proceeds from redemption of mutual funds
364.6
339.7
281.2
273.5
Others
-7.1
7.1
-44.7
32.7
Cash Flow from Investing
6.2
-119.4
-149.3
-27.1
Dividend paid
-28.5
-32.1
-36.3
-9.2
Finance costs
-0.4
-0.6
-0.9
-
Finance costs on lease liability
-6.9
-6.7
-7.3
-5.1
Payment of principal portion)
-16.5
-18.2
-17.2
-10.5
Cash Flow from Financing
-52.4
-57.6
-61.7
-24.8
Inc./(Dec.) in Cash
55.6
37.1
-25.6
-43.7
Opening Cash balances
66.46
122.03
159.13
133.51
Closing Cash balances
122.0
159.1
133.5
89.8
Source: Company, Angel Research
CMS Info Systems Limited | IPO Note
December 20, 2021
6
Exhibit 4: Key Ratios
Y/E March
FY2019
FY2020
FY2021
Valuation Ratio (x)
P/E (on FDEPS)
33.3
23.7
19.0
P/CEPS
21.3
16.7
13.8
P/BV
4.3
3.8
3.2
EV/Sales
2.7
2.1
2.2
EV/EBITDA
15.4
11.6
9.8
Per Share Data (Rs)
EPS (Basic)
6.5
9.1
11.4
EPS (fully diluted)
6.5
9.1
11.4
Cash EPS
10.1
12.9
15.7
Book Value
50.4
57.5
66.5
Returns (%)
ROE
12.9
15.8
17.1
ROCE
13.5
16.4
17.7
Turnover ratios (x)
Receivables (days)
124
118
140
Inventory (days)
13
11
25
Payables (days)
52
70
86
Working capital cycle (days)
85
59
79
Source: Company, Angel Research
CMS Info Systems Limited | IPO Note
December 20, 2021
7
Research Team Tel: 022 - 40003600 E-mail: [email protected] Website: www.angelone.in
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