New Delhi: After a flat start on the bourses, shares of CMS Info Systems witnessed strong demand, surging 19 per cent to scale an intraday high of Rs 260 per share.
The scrip had initially listed at 220.2 apiece, a premium of merely two per cent over its issue price of Rs 216 on NSE. It listed a Rs 218.5 on BSE.
About 23 lakh shares had changed hands on the bourse by 11.45 am.
The sudden move after a muted listing left investors seeking a fresh entry confused while those who were allotted shares were left wondering if the time is right to book profits.
The majority of the analysts suggested that investors should hold the counter for medium to long term, with only a few suggesting a fresh entry after the recent run-up.
Ajit Mishra, VP- Research, Religare Broking said investors can continue to hold CMS Info Systems with the long term view, considering its past financial performance and future growth prospects. “The company is broadening its network and also planning to add new business areas. New investors can start buying in a staggered manner on dips,” he added.
CMS Info Systems is India’s largest cash management company in terms of the number of ATM points and retail pick-up points as of March 31, 2021. The company is engaged in installing, maintaining, and managing assets and technology solutions on an end-to-end outsourced basis for banks, financial institutions, organized retail and e-commerce companies in India.
Considering the company’s dominant position in the domestic cash management value chain, we had assigned a ‘Subscribe’ rating for the issue, said Rajnath Yadav, Research Analyst, Choice Broking. Thus, we would recommend to remain invested in the company for the medium term, he added.
The company raised Rs 1,100 crore via its initial offering, selling the shares in the range of Rs 205-216 apiece between December 21-23. The issue had received a muted response from the investors as it was overall subscribed less than two times.
Likhita Chepa, Senior Research Analyst at CapitalVia Global Research said one can expect gains in the long-term as the fundamentals of the company look strong.
“The company has been able to post good results in the past and fundamentals look good. But in the current market scenario and given the less interest of the public in the IPO, it might see very little to no gains for some time,” she said.
On the flip side, Santosh Meena, Head of Research, Swastika Investmar believes that investors are better off investing in other businesses with higher growth potential. “Government is focusing on digital payments and we believe that the availability and use of cash could further decline, which will affect the business of the company,” he said while suggesting to keep a strict stop loss of Rs 200 on the counter.
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