Computer Age Management Services Ltd., a mutual fund transfer agency, expects its revenue to grow at an annualised rate of 12-13% in the next five years.
“The revenue is highly correlated with AUMs (assets under management) of mutual funds. Whenever AUM grows, clients have an advantage as they get fee remission, and the company sees revenue growth,” Anuj Kumar, chief executive officer at the Warburg Pincus- and NSE-backed company, told BloombergQuint in an interview. “If mutual fund AUM is expected to grow 17-18% on a compounded basis for the next 5-6 years, then the company's revenue growth will be expected to be between 12 and 13%.”
CAMS, India's largest registrar and transfer agent of mutual funds with almost 70% market share, will launch its three-day initial public offering on Sept.21. The company aims to raise Rs 2,242 crore by selling 1.82 crore shares at Rs 1,229-1,230 apiece, according to its red herring prospectus. The IPO comprises of an offer-for-sale by NSE Investments, a subsidiary of National Stock Exchange.
Key highlights of the conversation with Anuj Kumar:
- The company covers all the liability-side operations of mutual funds, provide bundled service to customers.
- In addition to mutual funds business, the company does business for alternative investment funds and portfolio management services.
- It has a 40% market share as an insurance repository.
- Increased access to mutual funds with entry of more retail investors augur well for the company for the next five years.
- The company's business has been characterised by client stickiness, with top 10 clients having a relation of 19 years with the company.
Watch the full interview here:
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