INTERVIEW: Here’s why this cash management firm is going for an IPO when Indians are being pushed to go cashless

• CMS Info Systems’ IPO opened its IPO today on December 21 and will close on December 23.
• The company plans to raise ₹1,100 crore via public issue of shares, which is a complete offer for sale by promoter Sion Investment Holdings PTE.
• Commenting on impact over another lockdown, the company’s director and CEO Rajiv Kaul told Business Insider that, “We hope we are well prepared in case anything untoward happens, it could be a natural calamity or it could be a thing like covid or a new variant.”

Mumbai-based cash management company CMS Info Systems that has opened its initial public offering (IPO) today may face a hurdle in its finances once again if another wave of COVID-19 comes through.

“We hope we are well prepared in case anything untoward happens, it could be a natural calamity or it could be a thing like covid or a new variant,” said, director and CEO of CMS Info Systems Rajiv Kaul to Business Insider in an interview.

This played out in 2020 when the company’s revenue fell 6% due to the lockdowns and lack of use of ATMs thereof.
The company manages cash for banks along with other outsourcing requirements for banks, financial institutions, organized retail and e-commerce companies in India.

Its business includes installing, maintaining and managing assets and technology solutions on an end-to-end outsourced basis for banks under long term contracts.

The company’s finances dipped slightly during lockdown as customers shifted some part of their transactions to digital payments.

However, lockdowns are only one part of the risk. The other longer-term risk is the policy push from both the government and the Reserve Bank of India who want people to use less cash and more digital payments in the time to come. More than two⁠-thirds of CMS’ revenue comes from picking up cash from the banks and delivering it to the ATMs.

So far, thankfully for CMS, these calls for a cashless India have not yielded much result. In fact, the cash in circulation in the economy has only gone up five years after the $4
“Digital transactions have been growing for a long time, it’s not only today, we are just talking about it today. We are talking about it since demonetisation because paytm, mobikwik and all was happening. So it's not a new disruption. Digital is disrupting some elements of cash, check, RTGS, NEFT or mobile payments and UPI. So there is a lot of flux and volatility,” said Kaul.

Business operations in three segments:

Revenue from operations	Description	% percentage of total income in FY21
Cash management services	Include end-to-end ATM replenishment services, cash pick-up and delivery, cash-in-transit services for banks	67.79%
Managed services	Banking automation product sales, common control systems, and software solutions	27.54%
Others	Financial cards issuance for banks and card personalisation services	3.47%

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