CMS Info Systems files DRHP for Rs.2,000 crore IPO

In the latest in the string of big ticket IPOs, CMS Info Systems has filed draft red herring prospectus with SEBI for a proposed Rs.2,000 crore IPO. The entire IPO will be an offer sale by Sion Investment Holdings Pte Ltd, an affiliate of Baring Private Equity.

CMS Info Systems has been privately owned for more than 13 years now. In 2008, Blackstone took controlling stake in CMS Info Systems which was later sold to Baring Private Equity in 2015. Currently, Sion Investment Holdings owns 100% stake in the company.

CMS Info Systems is predominantly involved in tech-enabled banking support services. Its revenues basically come from ATM and Cash Management, ATM installations, ATM maintenance services and personalized card services. While cash management accounts for 68.6% of revenues, managed services accounts for 27.9% of yearly revenues.

India is the third largest ATM market in the world in terms of installed ATMs and CMS has a leadership position in ATM and cash management. CMS manages over Rs.5,000 crore of cash per day and operates through an all-India network of 3,911 cash vans, 224 offices and services over 133,000 business points on an average.

For the fiscal year ending March 2021, CMS reported net sales revenues of Rs.1,322 crore and net profits of Rs.169 crore implying net profit margins of 12.78%. The company has appointed Axis Capital, Jefferies India, JM Financial and DAM Capital (formerly IDFC Securities) as BRLMs for the issue.

Interestingly, Baring had tried to do an IPO in 2017 but decided to withhold the idea after market conditions turned unfavourable. This is their second attempt at taking the company public. Being a total offer for sale (OFS), there will not be any fresh funds coming into the company.