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CAMS grey market premium falls 15% ahead of listing

Most brokerages had advised subscribe rating to the Chennai headquartered company, given its strong financials and industry base. The IPO which had a price band of Rs 1,229-1,230 apiece, may make its market debut at Rs 1,550 on BSE and NSE

CAMS grey market premium falls 15% ahead of listing

Fall in the grey market premium of the stock due to sudden crash in investor sentiments may cut listing gains

The shares of India's largest registrar and transfer agent of mutual funds- Computer Age Management Services (CAMS) shares will be listed on BSE on October 1.

While most analysts expect decent listings for CAMS, it's grey market premium (GMP) fell about 15% to Rs 312. Yesterday, shares were trading near Rs 370-385 per share, from Rs 280-290 per share, hit last Friday.

This is on back of recent volatility in equity markets worldwide, caused by the pandemic, impacting grey market premiums. Fall in the grey market premium of the stock due to sudden crash in investor sentiments may cut listing gains.

The IPO, that comprised of a fresh issue of Rs 165 crore and an offer for sale of Rs 153 crore by promoters, received an overwhelming response from investors, with the offering seeing 46.5 times subscription during September 21-23.

Most brokerages had advised subscribe rating to the Chennai headquartered company, given its strong financials and industry base. The IPO which had a price band of Rs 1,229-1,230 apiece, may make its market debut at Rs 1,550 on BSE and NSE.

The IPO received bids for 60,09,50,796 shares against the offer size of 1,28,27,370 shares. The portion set aside for retail investors was subscribed 33 times and the qualified institutional investor's segment received 12.94 times bid against the allotted size. The quota reserved for non-institutional investors was subscribed 122.4 times. It has already raised Rs 666.57 crore from anchor investors ahead of the opening of its IPO.  

Initiation of refunds from the initial public offering was carried out yesterday on September 29. CAMS is co-owned by NSE Investments, Warburg Pincus, Faering Capital ACSYS Investments and HDFC Group.

Jaikishan Parmar - Senior Equity Research Analyst at Angel Broking said, "It is an asset-light business model. Hence, at end of the year, investors can expect a healthy dividend, and there is a possibility that dividends per share might increase every year. Considering strong revenue visibility, healthy financials, and generous dividend payout policy, investors can expect more than 20% listing gains."

Abhijeet Ramachandran, an independent analyst at Tips2trade said,"CAMS is a very strong fintech company with a different dominant market share in the industry. Currently, the grey market premium has reduced to 12-13% returns. With events like Q2FY21 results & US elections lined up in the coming months, market including financials could see a lot of volatility in the near term. Investors getting subscription should look to keep booking profits on the listing date & add more only on further dips."

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