NSE selling entire CAMS stake through IPO; issue details awaited
Source : Economic Times
NEW DELHI: NSE is selling its entire stake in Computer Age Management Services (CAMS) via an offer for sale, with the Warburg Pincus-backed Great Terrain Investment becoming the company’s promoter. The update on the IPO is likely to be announced on Wednesday, and the issue is likely to hit the market next Monday.
As per the red herring prospectus released on Tuesday, NSE Investments Limited (NSEIL) is selling 18,246,600 equity shares in CAMS. NSEIL held 37.5 per cent stake, or 1,82,85,000 shares, in CMS as of March 31, 2019, as per NSE’s annual report for FY2019-2020.
A source told ETMarkets.com that OFS shares were the maximum NSE could offer in the issue. The remaining shares will be diluted before the OFS itself.
CAMS was as an associate company of the group up to February 4, 2020, NSE said in its annual report 2020.
CAMS’ draft prospectus filed with Sebi on January 9 suggested an offer for sale of 12,164,400 shares, which included an offer of up to 4,144,600 shares by Great Terrain, up to 6,099,876 shares by NSEIL, up to 944,724 shares by Acsys, up to 487,600 shares by HDFC and up to 487,600 shares by HDB Trust.
NSE Investments had acquired 44.99 per cent stake in CAMS in FY14. National Stock Exchange of India (NSE), the holding company, received a letter from Sebi stating that NSE should have obtained prior permission from Sebi for acquisition of stake in CAMS, an associate company, through its wholly owned subsidiary NSE Investments Limited in FY14, which resulted in violation of Securities Contracts (Regulations) Stock Exchanges and Clearing Corporation (SECC) Regulations, 2018.
In the same letter, Sebi directed NSE to divest its entire stake in CAMS (i.e. 37.50 per cent at present) within a period of 1 year; withdraw its directorship in CAMS and not to exercise voting rights and avail any corporate benefits in respect of the shareholding. SEBI further stated that this is without prejudice to any other action that SEBI may initiate for non-compliance with the Regulation 38(2) of SECC Regulations, 2018 read with Regulation 41(3) of SECC Regulations, 2012.
The grey market so far is expecting a price band of Rs 1,200-1,240 for the issue and based on that, the unlisted shares of CAMS traded at a Rs 350-360 premium in the unlisted market. The upper limit of the price range suggests an issue size of nearly Rs 2,260 crore.
“CMS is commanding a grey market premium of Rs 350-360. This is based on a projected price of Rs 1,230,” said Sagar Shah of Sagar Shah of Ascent Wealth Advisors. Dinesh Gupta of Unlisted Zone sees a similar grey market premium of Rs 358-362. He sees the price band in the Rs 1,200-1,240 range.