CMS Info Systems Ltd, a cash management and payment solutions company, has launched its three-day initial public offering (IPO) yesterday— Dec 21. In this article, learn more about the company’s business model and its IPO.

Company Profile – CMS Info Systems Ltd

CMS Info Systems Ltd (CMS) is India’s largest cash management company based on the number of ATM points and the number of retail pick-up points (as of FY21). It installs, maintains, and manages assets and technology solutions on an end-to-end outsourced basis for banks and financial institutions. The company also caters to organised retail and e-commerce firms in India.

In FY21, CMS’ total currency throughput stood at Rs 9,15,886 crore. Currency throughput is the total value of cash passing through all its ATM and retail cash management businesses. The company has a pan-India fleet of 3,965 cash vans and a network of 238 branches and offices as of August 31, 2021.

Business Segments:

  • Cash Management Segment: This includes end-to-end ATM replenishment services, cash pick-up & delivery, network cash management & verification services, and cash-in-transit services for banks. The company derives ~66.74% of its revenue from operations from this segment (as of August 2021).
  • Managed Services: This segment includes banking automation product sales, deployment, and associated annual maintenance. It also offers common control systems and software solutions, including multi-vendor, security, and automation software solutions. The segment accounts for 30.64% of the company’s total revenue. CMS has an order book of Rs 2,000 crore to be executed over the next 5-7 years.
  • Others: CMS Info Systems provides end-to-end financial cards issuance and management services for banks. They also offer card personalisation services.

About the IPO

CMS Info Systems’ public issue opens on December 21 and closes on December 23. The company has fixed Rs 200-216 per share as the price band for the IPO.

The IPO is entirely an offer for sale (OFS) of 5.09 crore equity shares by promoters and early investors, aggregating to Rs 1,100 crore. Individual investors can bid for a minimum of 69 equity shares (1 lot) and in multiples of 69 shares thereafter. You will need a minimum of Rs 14,904 (at the cut-off price) to apply for this IPO. The maximum number of shares that can be applied by a retail investor is 897 equity shares (13 lots).

The main objective of the IPO is to provide an exit strategy (or liquidity) to CMS’ promoters (Sion Investment Holdings). The company aims to achieve the benefits of listing the equity shares on NSE and BSE. The total promoter holding in the company will decline from 100% to 65.59% post the IPO.

Financial Performance

CMS Info Systems has posted a consistent increase in net profit over the past three financial years. The company suffered a minor decline in revenue in FY21 due to the Covid-19 pandemic. EBITDA increased to Rs 293.6 crore in FY21, compared to Rs 253.89 crore in FY20. For the first five months of FY22, it registered a net profit of Rs 84.4 crore and a revenue of Rs 629.72 crore. The revenue derived from its top five customers stood at 57.01% as of August 31, 2021.

They reported positive operating cash flow during the last three years. The company is also virtually debt-free.

Risk Factors

  • A decline in the availability or use of cash as the predominant mode of payment in India can have a severe impact on the company’s business and financial condition.
  • CMS’ business has significant expenses in relation to employee benefits, cash vans, and transportation. An increase in these expenses could affect its ability to offer competitive prices or maintain profitability.
  • They derive a substantial portion of the total revenue from a limited number of clients. The loss of any of its key customers or a decline in business from them could adversely affect the company’s reputation and cash flows.
  • CMS Info Systems’ business is exposed to operational risks (such as third-party fraud, embezzlement by employees, armed robbery, etc) for which it has incurred and might continue to incur risk costs and penalties. 
  • The failure of its information technology systems could have an adverse impact on its overall operations.
  • Any adverse developments concerning Indian banks that affect their demand for cash management services or utilisation of ATMs could harm CMS Info Systems’ financial performance.

IPO Details in a Nutshell

The book-running lead managers to the public issue are Axis Capital, DAM Capital Advisors, JM Financial Consultants, and Jefferies India. CMS Info Systems Ltd had filed the Red Herring Prospectus (RHP) for its IPO on December 14. You can read it here. Out of the total offer, 50% is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors.

Ahead of the IPO, CMS Info Systems raised Rs 330 crore from anchor investors. The marquee investors include Goldman Sachs, BNP Paribas Arbitrage, SBI Life Insurance, ICICI Prudential Mutual Fund (MF), SBI MF, etc.


CMS Info Systems has a strong product portfolio and long-standing customer relationships. It has an integrated business platform that offers a wide range of tailor-made products and services. As per a Frost & Sullivan report, the market for cash management services stood at Rs 8,500 crore in FY21. It is estimated to reach a market size of Rs 21,400 crore by FY27, growing at a CAGR of 16.6%. Being the largest player in the industry, CMS Info Systems is well-positioned to scale further.

However, the company’s business model primarily depends on cash being the predominant mode of payment in India. As we know, our country is witnessing a shift to cashless payment methods with the adoption of UPI and other systems. As an investor of CMS, you will need to keep an eye on the trend in digital transactions and their impact on the cash management business in the long term. 

The company has not received much interest in the grey market. CMS’ IPO shares are trading at a premium of just Rs 30 in the unofficial market. Before applying to this IPO, we will wait to see if the portion reserved for institutional investors gets oversubscribed. As always, consider the risks associated with the company and come to your own conclusion.

What are your views on this IPO? Will you be applying for it? Let us know in the comments section of the marketfeed app.