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CAMS investors look for partial exit via IPO

New York-based $79 billion private equity firm Warburg Pincus is the largest shareholder with 43.5 per cent in the company.

, ET Bureau|
Updated: Dec 04, 2019, 06.06 PM IST
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Kotak Mahindra and Nomura have been appointed by the company for the share sale.
MUMBAI: Private equity investors Warbug Pincus and Faering Capital, along with Housing Development Finance Corp (HDFC) and NSE Strategic Investment Corp, will sell a part of their stakes in mutual fund registrar Computer Age Management Services Ltd (CAMS) in an initial public offer (IPO) that could raise up to Rs 1500 crore from retail and institutional investors.

The company will file initial papers with the regulator within the next fortnight and likely list on the stock exchanges subject to regulatory approvals before the end of the fiscal 2020, three people familiar with the company’s plans said.

“This is an out and out offer for sale. The investors that have put money in the firm over the last few years are now planning to take back some profits. The company itself is cash rich and does not need any money. Calculations in terms of how much each investor will sell and valuations of the company are still being worked out,” said one of the three people cited above.

New York based $79 billion private equity firm Warburg Pincus is the largest shareholder with 43.5% in the company. It started investing in the company late in 2017 and has since bought stake from other investors including HDFC Group, NSE Investment and former promoter V Shankar’s Acsys Investment Pvt Ltd.

HDFC and HDFC Bank together owned 23.17% in CAMS at one time with Acsys holding 31.83% and NSE Investment 45%. Currently, HDFC’s stake is down to 12.5% while NSE Investment holds 37.5% in the company. Local PE firm Faering Capital owns 4%. The rest of the shareholders hold 2% or lower stake in the company.

“The shareholders have to decide how much each of them wants to dilute. Those discussions are still ongoing and that will also be crucial in deciding the valuations of the company. But so far, all shareholders want to keep some stake in the company after the issue,” said a second person familiar with the company’s plans.

Kotak Mahindra and Nomura have been appointed by the company for the share sale.

Besides offering mutual fund services, CAMS also has a license to offer KYC services to Sebi-regulated intermediaries and an IRDA license to extend insurance repository services. The company services 69% of the Rs 26 lakh crore mutual fund industry and serves four of the top five mutual funds in India.

Anuj Kumar, president & CEO at CAMS, neither confirmed nor denied the company’s plans to go public. “Our shareholders keep evaluating different options based on their own liquidity position,” he said.

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