Computer Age Management Services Ltd...

INSTITUTIONAL EQUITY RESEARCH

Page | 1 | PHILLIPCAPITAL INDIA RESEARCH

Computer Age Management Services Ltd (CAMS) Playing a critical role in the mutual funds value chain INDIA | Banking| IPO Note

20 September 2020

Company background • India’s largest registrar and transfer agent of mutual funds with an aggregate market

share of 70% (July 2020); c.87%) comes from its mutual fund business. • Market share up 800bps over five years; serviced Rs 19.2tn AAUM for 16 MF clients. • Services four of top five and nine of top fifteen mutual funds. • It is a technology‐driven financial infrastructure and services provider to mutual funds

and other financial institutions. It has grown its service offerings and currently provides a comprehensive portfolio of technology based‐services, such as transaction origination interface, transaction execution, payment, settlement and reconciliation, dividend processing, investor interface, record keeping, report generation, intermediary empanelment and brokerage computation, and compliance related services. It does this through a pan‐India network for its mutual fund clients, distributors and investors.

About the issue • Offer for sale of 1,82,46,600 equity shares of NSE’s holding, as per SEBI’s directive. • c.37% of the share capital. Lot size is 12. • Price band: Rs 1,229‐1,230; company will raise Rs 22.42bn at the upper band.

Key investment thesis • CAMS has a leadership position. It is the largest infrastructure and services provider in

the Indian mutual fund RTA space. We believe the industry has significant entry barriers: (1) it is costly and challenging for MFs to build capabilities in house, and (2) moving to competitors can be a time‐consuming and business‐disruptive process with high risk of data loss. CAMS’ market‐leading position, strong client relationships, extensive branch network, and growing mutual fund market will continue to support its superior return ratios (+30% RoEs). We expect return ratio to stay strong.

• At the upper end of the price band, the issue is valued at a 35x FY20 earnings of Rs 35. We believe this premium valuation is justified because of CAMS’ market‐leading position, superior return ratios, and high cash‐generative and resilient business model.

• The stock also offers a dividend yield of 1% (FY20), given that it is a capital‐light business; we believe dividends will continue rising. Dividend payout ratio in FY20 was 35%. Recommend SUBSCRIBE.

Key Financials Y/E Mar, Rs mn FY18 FY19 FY20 1Q20 1Q21Revenue from operation 6,415 6,936 6,996 1,750 1,486Other Revenue 163 182 217 55 148Total Revenue 6,578 7,118 7,213 1,805 1,635Revenue Growth 8.2% 1.3% ‐9.4%Employee expenses 2,263 2,746 2,580 651 645Operating Expenses 941 1,058 866 244 168Other Expenses 627 696 678 174 158Total Operating Expenses 3,831 4,501 4,124 1,069 972EBITDA 2,747 2,617 3,090 736 663EBITDA Margin 41.8% 36.8% 42.8% 40.8% 40.6%Profit Before Tax 2,266 2,009 2,508 599 533Profit after Tax 1,463 1,309 1,735 401 408Profit margin 22% 18% 24% 22% 25%EPS (Rs) 29.93 26.75 35.57 8.23 8.37RoNW (%) 33% 30% 32% 35% 31%Dividend (Rs) 19.1 22.5 12.2 3.0 11.2

SUBSCRIBE COMPANY DATA ISSUE OPENS 21th Sep 2020ISSUE CLOSES 23th Sep 2020PRICE BAND Rs 1229‐1230OFS 18.25mnISSUE SIZE Rs 22.4‐22.42bnMKT CAP Rs 59.3‐59.7 bn ISSUE Breakup

Investor Shares ( mn)

Amount (Rs bn) % of issueUpper Lower

QIB 9.03 11.10 11.11 50%‐Anchor 5.42 6.66 6.67 ‐ ‐ Other 3.61 4.44 4.44 ‐NIB 2.71 3.33 3.33 15%Retail 6.32 7.77 7.78 35%Emp 0.18 0.20 0.20 ‐Total 18.25 22.40 22.42 100% Shareholding Investor Post Issue % HoldingGreat Terrain 21.2 43.50%HDFC 2.9 5.99%HDFC Bank 1.6 3.33%HDB Trust 1.6 3.19%Public 21.1 43.7%

Sujal Kumar (+ 9122 6246 4114) [email protected] Manish Agarwalla (+ 9122 6246 4125) [email protected]


COMPUTER AGE MANAGEMENT SERVICES LTD IPO NOTE

Key Charts Total income (Rs mn) Revenue from operations breakdown

Source: RHP, PhillipCapital India Research Revenue from top‐5 clients (Rs mn) Expenses breakup (Rs mn)

Source: RHP, PhillipCapital India Research EBITDA (Rs mn) Net profit and return on equity

Source: RHP, PhillipCapital India Research

6,415 6,936 6,996

1,750 1,486

6,578 7,118 7,213

1,805 1,635

‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY18 FY19 FY20 1Q20 1Q21

Revenue from Operation Other Income

86.6% 86.8% 86.9% 89.7%

13.4% 13.2% 13.1% 10.3%

0%

20%

40%

60%

80%

100%

FY18 FY19 FY20 1Q21

Mutual Fund Other Revenue

4,290 4,656 4,718

1,053

66.9% 67.1% 67.4%70.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY18 FY19 FY20 1Q21

Revenue from Top 5 Clients as a % of Revenue from Operation

2,263 2,746 2,580

651 645

940

1,058 866

243 168

626

696 677

173 158

‐

1,000

2,000

3,000

4,000

5,000

FY18 FY19 FY20 1Q20 1Q21

Employee Expense Finance Cost Operating Expense Other Expense

24022173

2607

620 450

37%

31%

37%35%

30%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

500

1000

1500

2000

2500

3000

FY18 FY19 FY20 1Q20 1Q21

EBITDA EBITDA Margin

1,463 1,308

1,734

408

33%

30%32% 31%

0%

5%

10%

15%

20%

25%

30%

35%

‐

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

FY18 FY19 FY20 1Q20

Net Profit RoE



Company Overview • India’s largest registrar and transfer agent of mutual funds with an aggregate

market share of 70% (July 2020). • Services four of top five and nine of top fifteen mutual funds. • Company provides technology‐based services, such as transaction origination

interface, transaction execution, payment, settlement and reconciliation, dividend processing, investor interface, record keeping, report generation, intermediary empanelment and brokerage computation and compliance related services, through its pan‐India network to its mutual fund clients, distributors and investors.

• As of July 2020, it serviced Rs 19.2 trillion of AAUM of 16 mutual fund clients. • A substantial portion of its revenue (c.87%) comes from its mutual fund business

which is based on the AAUM of its clients. • CAMS charge higher fees from equity mutual funds as compared to other

categories of mutual funds. The AUM of equity mutual funds serviced by them grew from Rs 2.18 trillion as of March 31 2015 to touch Rs 5.22 trillion as of March 31 2020 – a CAGR of 19%; as of June 30 2020, this was Rs 6.19 trillion.

• Handled 328mn transactions in FY20 and manages around 71.8mn investor folios as of June 2020.

• Offers an integrated and customized portfolio of services through its pan‐India physical network comprising 271 service centres spread over 25 states and five union territories as of 30 June 2020.

• Over the years, CAMS has leveraged its domain expertise, processes, and infrastructure, to diversify its offering of services to cater to a variety of other financial services sectors such as: o Electronic payment and collection services o Insurance services o Alternative Investment services o Banking and non banking services o KYC Registration Agency o Software solution o Account Aggregator

CAMS corporate chart




Mutual fund registrar and transfer agent market • Computer Age Management Services Limited (CAMS) is the largest mutual fund

registrar and transfer agent in India with a market share of 70%. • Among the top five AMCs, SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential

Mutual Fund and Aditya Birla Sun Life Mutual Fund are serviced by CAMS; only Nippon India Mutual Fund is serviced by Karvy.

Market share of various MF RTAs Projected growth of the MF RTA industry (revenue in Rs bn)

Source: RHP, PhillipCapital India Research • According to CRISIL, the industry is estimated to have seen a CAGR of 17% in the

past five years. • The size of the MF RTA business as of FY20 was c.Rs 9bn. • After the onset of COVID‐19 in the first half of FY21, there has been a decrease in

transaction volumes and hence the growth in the financial year 2021 is expected to be muted.

• The mutual fund RTA industry is expected to see c.15% CAGR up to FY25 and likely to reach a size of c.Rs 18bn, which is almost in line with the growth of AUMs.

Revenue model The revenue model of MF RTAs typically revolves around these four factors: 1. The AUMs handled. 2. Mix of AUM handled across categories (equity, debt, liquid, hybrid). 3. Volume of paper‐based transactions handled. 4. Fees on value‐added services offered. • Major part of the revenue earned (approximately 80%) is via fees charged on the

AUMs managed by the AMCs – for which the MF RTAs provide a service. These fees are generally tiered.

• The other major portion of revenue is the charge for handling of paper‐based transactions of AMCs, for which considerable effort is needed to enter the details into the system for effective record keeping and reporting. Although the proportion of these transactions may be falling due to increasing usage of the online medium, they still form a good portion of MF RTAs’ revenues due to the higher dependence of institutional investors on paper‐based systems. These transactions require higher amount of processing, which in turn leads to higher costs for MF RTAs

• The overall fee percentage for the RTAs was c.3.5‐4.0bps of the total AUMs as on 31 March 2020, lower than the fee charged as of 31 March 2015 (c.4.5‐5.0bps).

• According to CRISIL, a moderate reduction in fees charged by RTAs (as a proportion of AUM, as the size of the industry AUM increases) is likely.

61% 68% 69% 70%

31%26% 27% 27%

0%

20%

40%

60%

80%

100%

Mar‐15 Mar‐19 Mar‐20 Jul‐20

CAMS Karvy Sundram Franklin

4.1

9.0

17.6

0

2

4

6

8

10

12

14

16

18

20

Mar‐15 Mar‐20 Mar‐25 P

CAGR ~17%

CAGR ~15%



MF RTAs charge the highest fee for equity AUMs (bps)

Source: RHP, PhillipCapital India Research Comparison of key players in the MF RTA business CAMS has the highest revenue in the industry and saw the highest revenue growth in the past five years with a CAGR of 13% in FY15‐20. • For FY20, its EBITDA margins and RoE were better than its competitors. • On a consolidated basis, profitability of both Karvy Computer Share and Karvy

were healthy in FY20 with EBITDA margins equal to or more than approximately 36% in respective periods.

• CAMS is the most productive MF RTA – with its monthly AUM per branch being the highest in industry.

Operational performance and key financial indicators of CAMS and Karvy

CAMS Karvy Revenue from operations (in Rs million) 6,996 4,499 Revenue from operations CAGR (FY15‐FY20) 12.80% 9.10% PAT margin 23.90% 1.00% EBITDA margin 42.80% 36.00% RoE 34.10% 3.00% Monthly AAUM (Rs bn) managed by Clients (March 2020) 17,142.78 6,570.45 Monthly AUM CAGR % (FY15‐20) 18.60% 11.60% Qtrly AAUM (Rs bn) managed by Clients (March 2020) 18,740.13 7,246.21 Quarterly AUM CAGR % (Financial Year 2015‐2020) 21.20% 12.30% No of clients (Top 10) 6 3 No of clients (Top 5) 4 1 No of branches/ locations 271 203 Monthly AUM/branch 6,326 3,237


7.5 7.8

2.4

3.3

4.3

5.9 6

2.2 21.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Equity Funds Hybrid Debt Liquid Others

Mar‐15 Mar‐17 Mar‐19 Mar‐20



Insurance Repository • Penetration: India’s life insurance penetration stood at 2.74% and that of non‐

life insurance at 0.97% as of 2018. Overall penetration of the insurance sector was 3.70%. This is lower than other Asian countries.

• Usage of e‐policies: Is also extremely low. Awareness and perception of using policies in the electronic form is low in India. Even after the high level of digitalization and discounts on policies purchased online, these levels remain less significant.

IRDAI regulation on issuance of electronic insurance policies • June 2016 regulation made it mandatory for life insurance companies to issue

policies in the electronic form if the sum assured is Rs 1mn or more, or annual premium is Rs 10,000 or more.

• In case of health insurance policy, the sum assured needs to be Rs 500,000 or more, apart from annual premium of Rs 10,000 and above.

• For general insurance policies, e‐insurance is needed if anyone is paying an annual premium of Rs 5k and above or has a sum insured of Rs1 mn or more.

Insurance repositories: Act as a single stop shop for policy servicing for e‐insurance policies. Currently, four companies are performing the function of insurance repositories: • CAMS Insurance Repository Services Limited • Central Insurance Repository Limited • KARVY Insurance Repository Limited • NSDL Database Management Limited Insurance repositories perform an array of functions for policy holders who have been issued a policy in electronic form. Benefits for policy holders are: 1. Convenience in policy servicing 2. Ease of usage 3. Simplification of the claims process 4. Insurance services centres and online platform 5. Technology solutions for end‐to‐end management 6. Agent management services 7. Renewal revenue management services Growth in e‐insurance policy (‘000) Insurance repository market share


0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jan‐15 Jan‐16 Jan‐17 Jan‐18

e‐insurance policies e‐insurance accounts

45%35%

39%

32%

0%

20%

40%

60%

80%

100%

Total e‐Insurance Policies Total e‐Insurance accounts

NSDL CAMS KARVY CIRL



Business vertical 1) Mutual Funds Services Business: CAMS is involved through the life cycle of an

account ‐ from the stage of account creation to processing transactions and redemption of the amount invested. It provides necessary statutory statements such as capital gains statements including for a zero‐balance account along with transaction origination services, operations services, investor services, risk management services and compliance services.

2) Electronic Payment Collection Services Business: As part of electronic payment collection services business, CAMS manages end‐to‐end automated clearing house transaction and electronic clearance services (ECS) and services mutual funds, non‐banking financial companies and insurance companies. For the three months ended June 30, 2020 and the financial years 2020, 2019 and 2018 it executed over 22.3mn, 93.3mn, 80.6mn, and 55.4mn ECS and ACH registrations and transactions, respectively.

3) Insurance Services Business: CAMS conduct insurance services business through its subsidiary, CAMS Insurance Repository Services Limited. As of June 30 2020 it held +2.9mn e‐insurance policies. It had a market share of 39% of the insurance repository business, based on e‐insurance policies being managed in FY18.

4) Alternative Investment Fund Services Business: CAMS had 77 alternative investment funds AIF clients with an aggregate of Rs 160.27bn in AAUM for June 2020. As of March 31, 2020, it had 79 AIF clients. Services that it offers to AIF clients include: • Creation of investor record, including conducting KYC • Fund accounting services and reconciliation • Creation of MIS and reporting systems • Data processing • Intermediaries revenue management • Investor service management including document management services

and notarization of documents • Dispatching drawdown notices and collection management on behalf of the

AIF. 5) Banking and non‐banking services business: Offers customer interface services

and back‐office processing services. 6) KYC Registration Agency Business: Operates KYC Registration Agency Business

through its subsidiary, CAMS Investor Services Private Ltd, which is one of five entities granted a KRA license by SEBI. It launched this service in July 2012, and as part of its KYC Registration Agency Business, it maintains KYC records of investors on behalf of capital market intermediaries registered with SEBI, eliminating the need to repeat KYC procedures.

7) Software Solutions Business: Conduct software solutions business through subsidiary, SSPL. SSPL owns, develops and maintains the technology solutions for mutual fund clients and as of June 30, 2020, it had a technology team of 428 personnel. Through a subsidiary, CAMS developed Investrak.NET, a scalable mutual fund transfer agency platform, among others. It assists with website design and development for other businesses and consumers, providing mobility solutions, performing trend analysis, business intelligence and analytics based services, and technical and domain consulting services.

8) Account Aggregator Business: Subsidiary CFISPL was issued an in principle approval by the RBI on May 8 2018 for being an account aggregator.



Key strengths Largest infrastructure and services provider in a large and growing mutual funds market: CAMS is India’s largest registrar and transfer agent of mutual funds. The nature of its services to mutual funds spans multiple facets of its relationship with investors, distributors, and regulators. The number of folios serviced by CAMS grew from 39.4mn as of 31 March 2020 to 39.8mn as of 30 June 2020. Its operating model has assisted in contributing to the growth of its mutual fund clients by providing real time, uninterrupted, pan‐India services. The relationship with HDFC Asset Management Company Limited, ICICI Prudential Asset Management Company Limited, SBI Funds Management Private Limited and Aditya Birla Capital Limited, its 4 largest mutual fund clients, averaged 18 years. Integrated business model and longstanding client relationships in its mutual funds services business: Utilizing its diverse portfolio of technology enabled services and leveraging the pan‐India physical network, domain expertise of the Indian financial services ecosystem and a comprehensive risk management system, CAMS has built an integrated business model and has longstanding client relationships in its mutual funds services business. Scalable technology enabled ecosystem: Uses advanced technology to innovate and improve its services for not only clients but also investors, distributors, channel providers and regulators. Satisfaction rate is over 95%, as per the SEBI‐mandated investor‐satisfaction survey. SEBI complaints as a percentage of transactions handled reduced to 0.004% in FY20 from 0.015% in FY15. Its IT team comprises of +606 qualified professionals that manage a comprehensive proprietary IT infrastructure, develop innovative products and ensure systems and data security, in addition to offering 24x7 support to its clients. They offer many of its services online and through its mobile device applications, for investors, their clients, their distributors and channel providers. Strong focus on processes and risk management: CAMS clients are regulated financial institutions and the services it provides to them must be accurate, timely and continuous, secure and technologically advanced as they are considered to be necessary to the functioning of financial services industry. In its mutual funds services business, CAMS assists its clients with compliance requirements, including submission of reports to regulators. Experienced management and board and marquee shareholders: CAMS management team has extensive experience in a variety of financial services sectors, with a demonstrated ability to grow and diversify the business. Anuj Kumar, the Whole‐time Director and Chief Executive Officer, has over two decades of experience and has been with the company since June 2016. Its key management personnel have average work experience of over 27 years and have been with the company for over 5 years. The Board of Directors collectively possess an effective mix of skills and attributes with significant business, operational, technology, finance, insurance, legal and investment experience in a diverse range of industries. The marquee shareholders include Great Terrain (an affiliate of Warburg Pincus), HDFC, HDFC Bank and NSEIL, among others.



Key strategies Maintain the leadership position by enhancing service offerings to mutual fund clients: A key element of CAMS business strategy is to continuously enhance the scope of its service offerings in the core mutual fund registrar and transfer agency business and further deepen integration with its clients and improve value delivery. CAMS has been focused on adding services for its existing mutual fund clients relating to servicing of investors, interface with investors, distributors and other stakeholders, risk management, process automation, data analytics and business intelligence in order to grow and maintain its share of business and revenues from its mutual fund clients. Continue the technology‐led services innovations: Market position has been a function of its in‐house technology capabilities, which they plan to continue investing in. Their spend on technology has continued to be significant and the advantages available to them by developing and investing in technology include client commitment and loyalty, economies of scale, effective risk management, scalability, expansion to the adjacent financial services sectors, among others. The company is engaged in several such initiatives in the areas of reconciliation, brokerage computation, digitization of paper transactions, quality control, among others. Achieve leadership in individual businesses and then target scale: CAMS invest in creating sustainable and scalable business platforms early on in the life cycle, and focus on delivering incremental value to its clients. Most of its businesses and client relationships in such businesses continue to grow over time and at scale the businesses contribute favourably to its profitability. Key new offerings continue to be imbued with a platform character and are technology‐based. They launched CAMSPay, which is an end‐to‐end highly automated National Automated Clearing House (NACH) platform that supports electronic payments through the National Payments Corporation of India platform. Improve automation in the businesses: Through automation, CAMS targets to not only improve cost efficiencies but also enhance customer experience. They are currently engaged in several automation projects, including automation of subscription reconciliation, purchase and SIP processes, document receipts and storage. Its applications, such as myCAMS, GoCORP, digiSIP, CAMSserv, edge360 are aimed not only at enhancing the investor and distributor ease of operation but also to automate the flow of transactions, thereby reducing manual efforts and risks associated with manual efforts.



Rating Methodology We rate stock on absolute return basis. Our target price for the stocks has an investment horizon of one year. We have different threshold for large market capitalisation stock and Mid/small market capitalisation stock. The categorisation of stock based on market capitalisation is as per the SEBI requirement. Large cap stocks Rating Criteria Definition

BUY >= +10% Target price is equal to or more than 10% of current market price

NEUTRAL ‐10% > to < +10% Target price is less than +10% but more than ‐10%

SELL <= ‐10% Target price is less than or equal to ‐10%. Mid cap and Small cap stocks Rating Criteria Definition

BUY >= +15% Target price is equal to or more than 15% of current market price

NEUTRAL ‐15% > to < +15% Target price is less than +15% but more than ‐15%

SELL <= ‐15% Target price is less than or equal to ‐15%.

Disclosures and Disclaimers PhillipCapital (India) Pvt. Ltd. has three independent equity research groups: Institutional Equities, Institutional Equity Derivatives, and Private Client Group. This report has been prepared by Institutional Equities Group. The views and opinions expressed in this document may, may not match, or may be contrary at times with the views, estimates, rating, and target price of the other equity research groups of PhillipCapital (India) Pvt. Ltd.

This report is issued by PhillipCapital (India) Pvt. Ltd., which is regulated by the SEBI. PhillipCapital (India) Pvt. Ltd. is a subsidiary of Phillip (Mauritius) Pvt. Ltd. References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. This report is prepared and distributed by PCIPL for information purposes only, and neither the information contained herein, nor any opinion expressed should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives. The information and opinions contained in the report were considered by PCIPL to be valid when published. The report also contains information provided to PCIPL by third parties. The source of such information will usually be disclosed in the report. Whilst PCIPL has taken all reasonable steps to ensure that this information is correct, PCIPL does not offer any warranty as to the accuracy or completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at his or her own risk and PCIPL does not accept any liability as a result. Securities and Derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily an indication of future performance.

This report does not regard the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realised. Under no circumstances can it be used or considered as an offer to sell or as a solicitation of any offer to buy or sell the securities mentioned within it. The information contained in the research reports may have been taken from trade and statistical services and other sources, which PCIL believe is reliable. PhillipCapital (India) Pvt. Ltd. or any of its group/associate/affiliate companies do not guarantee that such information is accurate or complete and it should not be relied upon as such. Any opinions expressed reflect judgments at this date and are subject to change without notice.

Important: These disclosures and disclaimers must be read in conjunction with the research report of which it forms part. Receipt and use of the research report is subject to all aspects of these disclosures and disclaimers. Additional information about the issuers and securities discussed in this research report is available on request.

Certifications: The research analyst(s) who prepared this research report hereby certifies that the views expressed in this research report accurately reflect the research analyst’s personal views about all of the subject issuers and/or securities, that the analyst(s) have no known conflict of interest and no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific views or recommendations contained in this research report.

Additional Disclosures of Interest: Unless specifically mentioned in Point No. 9 below: 1. The Research Analyst(s), PCIL, or its associates or relatives of the Research Analyst does not have any financial interest in the company(ies) covered in

this report. 2. The Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively do not hold more than 1% of the securities of the

company (ies)covered in this report as of the end of the month immediately preceding the distribution of the research report. 3. The Research Analyst, his/her associate, his/her relative, and PCIL, do not have any other material conflict of interest at the time of publication of this

research report. 4. The Research Analyst, PCIL, and its associates have not received compensation for investment banking or merchant banking or brokerage services or for

any other products or services from the company(ies) covered in this report, in the past twelve months. 5. The Research Analyst, PCIL or its associates have not managed or co‐managed in the previous twelve months, a private or public offering of securities for

the company (ies) covered in this report. 6. PCIL or its associates have not received compensation or other benefits from the company(ies) covered in this report or from any third party, in

connection with the research report. 7. The Research Analyst has not served as an Officer, Director, or employee of the company (ies) covered in the Research report. 8. The Research Analyst and PCIL has not been engaged in market making activity for the company(ies) covered in the Research report. 9. Details of PCIL, Research Analyst and its associates pertaining to the companies covered in the Research report:



Sr. no. Particulars Yes/No1 Whether compensation has been received from the company(ies) covered in the Research report in the past 12 months for

investment banking transaction by PCIL No

2 Whether Research Analyst, PCIL or its associates or relatives of the Research Analyst affiliates collectively hold more than 1% of the company(ies) covered in the Research report

No

3 Whether compensation has been received by PCIL or its associates from the company(ies) covered in the Research report No4 PCIL or its affiliates have managed or co‐managed in the previous twelve months a private or public offering of securities for the

company(ies) covered in the Research report No

5 Research Analyst, his associate, PCIL or its associates have received compensation for investment banking or merchant banking or brokerage services or for any other products or services from the company(ies) covered in the Research report, in the last twelve months

No

Independence: PhillipCapital (India) Pvt. Ltd. has not had an investment banking relationship with, and has not received any compensation for investment banking services from, the subject issuers in the past twelve (12) months, and PhillipCapital (India) Pvt. Ltd does not anticipate receiving or intend to seek compensation for investment banking services from the subject issuers in the next three (3) months. PhillipCapital (India) Pvt. Ltd is not a market maker in the securities mentioned in this research report, although it, or its affiliates/employees, may have positions in, purchase or sell, or be materially interested in any of the securities covered in the report.

Suitability and Risks: This research report is for informational purposes only and is not tailored to the specific investment objectives, financial situation or particular requirements of any individual recipient hereof. Certain securities may give rise to substantial risks and may not be suitable for certain investors. Each investor must make its own determination as to the appropriateness of any securities referred to in this research report based upon the legal, tax and accounting considerations applicable to such investor and its own investment objectives or strategy, its financial situation and its investing experience. The value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial, economic, or political factors. Past performance is not necessarily indicative of future performance or results.

Sources, Completeness and Accuracy: The material herein is based upon information obtained from sources that PCIPL and the research analyst believe to be reliable, but neither PCIPL nor the research analyst represents or guarantees that the information contained herein is accurate or complete and it should not be relied upon as such. Opinions expressed herein are current opinions as of the date appearing on this material, and are subject to change without notice. Furthermore, PCIPL is under no obligation to update or keep the information current. Without limiting any of the foregoing, in no event shall PCIL, any of its affiliates/employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind including but not limited to any direct or consequential loss or damage, however arising, from the use of this document.

Copyright: The copyright in this research report belongs exclusively to PCIPL. All rights are reserved. Any unauthorised use or disclosure is prohibited. No reprinting or reproduction, in whole or in part, is permitted without the PCIPL’s prior consent, except that a recipient may reprint it for internal circulation only and only if it is reprinted in its entirety.

Caution: Risk of loss in trading/investment can be substantial and even more than the amount / margin given by you. Investment in securities market are subject to market risks, you are requested to read all the related documents carefully before investing. You should carefully consider whether trading/investment is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. PhillipCapital and any of its employees, directors, associates, group entities, or affiliates shall not be liable for losses, if any, incurred by you. You are further cautioned that trading/investments in financial markets are subject to market risks and are advised to seek independent third party trading/investment advice outside PhillipCapital/group/associates/affiliates/directors/employees before and during your trading/investment. There is no guarantee/assurance as to returns or profits or capital protection or appreciation. PhillipCapital and any of its employees, directors, associates, and/or employees, directors, associates of PhillipCapital’s group entities or affiliates is not inducing you for trading/investing in the financial market(s). Trading/Investment decision is your sole responsibility. You must also read the Risk Disclosure Document and Do’s and Don’ts before investing.

Kindly note that past performance is not necessarily a guide to future performance.

For Detailed Disclaimer: Please visit our websitewww.phillipcapital.in IMPORTANT DISCLOSURES FOR U.S. PERSONS This research report is a product of PhillipCapital (India) Pvt. Ltd. which is the employer of the research analyst(s) who has prepared the research report. PhillipCapital (India) Pvt Ltd. is authorized to engage in securities activities in India. PHILLIPCAP is not a registered broker‐dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided for distribution to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a‐6 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not a Major Institutional Investor.

Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report should do so only through Rosenblatt Securities Inc, 40 Wall Street 59th Floor, New York NY 10005, a registered broker dealer in the United States. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through PHILLIPCAP. Rosenblatt Securities Inc. accepts responsibility for the contents of this research report, subject to the terms set out below, to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor.

The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority (“FINRA”) and may not be an associated person of Rosenblatt Securities Inc. and, therefore, may not be subject to applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a research analyst account. Ownership and Material Conflicts of Interest Rosenblatt Securities Inc. or its affiliates does not ‘beneficially own,’ as determined in accordance with Section 13(d) of the Exchange Act, 1% or more of any of the equity securities mentioned in the report. Rosenblatt Securities Inc, its affiliates and/or their respective officers, directors or employees may have interests, or long or short positions, and may at any time make purchases or sales as a principal or agent of the securities referred to herein. Rosenblatt Securities Inc. is not aware of any material conflict of interest as of the date of this publication Compensation and Investment Banking Activities



Rosenblatt Securities Inc. or any affiliate has not managed or co‐managed a public offering of securities for the subject company in the past 12 months, nor received compensation for investment banking services from the subject company in the past 12 months, neither does it or any affiliate expect to receive, or intends to seek compensation for investment banking services from the subject company in the next 3 months. Additional Disclosures This research report is for distribution only under such circumstances as may be permitted by applicable law. This research report has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient, even if sent only to a single recipient. This research report is not guaranteed to be a complete statement or summary of any securities, markets, reports or developments referred to in this research report. Neither PHILLIPCAP nor any of its directors, officers, employees or agents shall have any liability, however arising, for any error, inaccuracy or incompleteness of fact or opinion in this research report or lack of care in this research report’s preparation or publication, or any losses or damages which may arise from the use of this research report.

PHILLIPCAP may rely on information barriers, such as “Chinese Walls” to control the flow of information within the areas, units, divisions, groups, or affiliates of PHILLIPCAP.

Investing in any non‐U.S. securities or related financial instruments (including ADRs) discussed in this research report may present certain risks. The securities of non‐U.S. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on such non‐U.S. securities or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in effect within the United States.

The value of any investment or income from any securities or related financial instruments discussed in this research report denominated in a currency other than U.S. dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or income from such securities or related financial instruments.

Past performance is not necessarily a guide to future performance and no representation or warranty, express or implied, is made by PHILLIPCAP with respect to future performance. Income from investments may fluctuate. The price or value of the investments to which this research report relates, either directly or indirectly, may fall or rise against the interest of investors. Any recommendation or opinion contained in this research report may become outdated as a consequence of changes in the environment in which the issuer of the securities under analysis operates, in addition to changes in the estimates and forecasts, assumptions and valuation methodology used herein.

No part of the content of this research report may be copied, forwarded or duplicated in any form or by any means without the prior written consent of PHILLIPCAP and PHILLIPCAP accepts no liability whatsoever for the actions of third parties in this respect.

PhillipCapital (India) Pvt. Ltd. Registered office: 18th floor, Urmi Estate, Ganpatrao Kadam Marg, Lower Parel (West), Mumbai – 400013, India.

Computer Age Management Services Ltd...

Documents

Transcript of Computer Age Management Services Ltd...