CMS Info Systems likely to kick off 2018 IPO season

MUMBAI: Baring Private Equity Asia-promoted CMS Info Systems, India’s largest cash management company, is likely to go to the primary market in the third week of January to raise about Rs 1,300 crore in the first initial public offer (IPO) of 2018.

Baring will dilute about 30 per cent of its stake in the IPO, giving CMS a valuation of about Rs 4,500 crore, bankers told ET. The company expects to raise around Rs 1,200-1,300 crore with its offer for sale of 4.44 crore equity shares of Rs 10 each.

CMS Info Systems, set up in 2009 after an investment by the Blackstone Group, had sought to acquire the majority stake in certain key businesses of CMS Computers. In 2011, CMS Info Systems acquired Securitrans India, thus consolidating its position as the leading cash management services company in the country.


In 2015, Baring acquired 100per cent of CMS Info Systems for Rs 2,000 crore, and 53 per cent of the equity came from Blackstone Group, 37 per cent from the Grover family, and 10 per cent from the management team led by Rajiv Kaul.

Kotak Mahindra Capital Company, Axis Capital, and UBS Securities have been appointed as book running lead managers for the first IPO of 2018.

CMS is the local market leader in cash management, based on the number of automated teller machines (ATMs) and retail pick-up points. It enjoys a market share of 25.6 per cent, based on the total number of ATMs in India, according to a Frost & Sullivan report cited in the offer document of the company.

The Frost & Sullivan report says that India has one of the lowest ATM penetration rates in the world, with only 19.7 ATMs per 100,000 adults, compared to a global average of 40.5 ATMs per 100,000 adults as of December 31, 2015.

New Delhi has undertaken initiatives aimed at increasing financial inclusion to give the public greater access to bank branches and ATMs, particularly in rural regions, where ATM penetration is very low at 4.6 machines per 100,000 adults.

Besides CMS Info Systems, hospital chain Aster DM Healthcare, which re-filed its issue prospectus with the market regulator last August with a reduced offer size, is likely open its IPO in January, according to banking sources.

In 2017, 36 companies raised a record Rs 67,150 crore through IPOs. The previous record was 2010, when 64 companies raised Rs 37,535 crore.

Some of the large IPOs receiving Sebi approval include Acme Solar with a tentative target of Rs 2,200 crore, and Hindustan Aeronautics and Reliance General Insurance, with likely issuances of about Rs 1,600 crore each.