Mr. Aayush Agrawal, Senior Analyst, Swastika Investmart Ltd.
Despite consistent growth in revenues, stable financial performance, and increasing margins, we saw a decline in FY21 which can be attributed to COVID-19. Also as the government focuses on digital payments, a further decrease in the use and availability of cash can have an adverse effect on business activities. The risk of market volatility also needs to be considered right now on the back of rising cases from the omicron variant. We suggest investors to Avoid this stock.
The issue received a muted response from the market getting a subscription of only 1.95 times. The entire IPO proceeds of Rs 1,100 crores being Offered for Sale is another reason for the slow response from the market.
CMS Info Systems also failed to perform in the grey market as it is trading at only 2.5% over its issue price. The market volatility for the past few months and tepid last few listings might have added to this slow response. We expect the shares to list flat or at a discount of 10%.