MITTAL SCHOOL OF BUSINESS

Report on the Financial Sources of

COMPUTER AGE
MANAGEMENT SERVICES
Ltd
(CAMS)
Under the guidance of
Dr. Mahesh Kumar Sarva

Submitted by
Kandukuri Sai Vaishnavi Keerthi
Registration no. 12107725

FINM-542
Section: Q2155
Roll No. RQ2155A21
MBA (Business Analytics)
Table of Contents
ANNEXURE – V ................................................................................................................................... 2
DECLARATION: ................................................................................................................................. 2
PROFILING OF COMPANY: ............................................................................................................ 3
FINANCIAL ANALYSIS: ................................................................................................................... 4
Long Term Sources of Finances: ......................................................................................................... 7
Analysis of Long-Term sources of Finance of CAMS Ltd: ............................................................... 8
Short Term Sources of Finances: ...................................................................................................... 14
Analysis of Short-Term sources of Finance of CAMS Ltd: ............................................................ 15
COMPARISON WITH PEERS: ....................................................................................................... 19
Analysis of Long-Term Sources of Finance for CAMS, MOFS, CDSL Limited: ..................... 21
Analysis of Short-Term Sources of Finance for CAMS, MOFS, CDSL Limited: .................... 22
CONCLUSION: .............................................................................................................................. 23
Whether CAMS Ltd is a suitable to invest? ..................................................................................... 23
REFERENCES: .................................................................................................................................. 24

1
 ANNEXURE – V

Course Code: FINM542 Course Title: Corporate Finance - 1

Course Instructor: Dr. Mahesh Kumar Sarva

Academic Task No.: 2 Academic Task Title: Assignment

Date of Allotment: 27 September 2021 Date of Submission: 22October 2021

Student’s Roll No.: RQ2155A21 Student’s Registration No.: 12107725

Evaluation Parameters:

DECLARATION:

I, Kandukuri Sai Vaishnavi Keerthi, hereby declare that the

assignment work titled “Computer Age Management Services Ltd”
is my individual work and to the best of my knowledge.

I have not copied it from any other student’s work or from any other
source except where due acknowledgement is made explicitly in the
text, nor has any part been written for me by any other person.

Student’s Kandukuri Sai Vaishnavi

Name Keerthi
Student’s
Signature

2
PROFILING OF COMPANY:

Computer Age Management Services Limited is a Mutual Fund Transfer

Agency. It was incorporated in the year 1988. The Company listed w.e.f 1 st
October 2020 and the Initial Public Offer (IPO) offering through OFS by the
existing shareholders. CAMS is headquartered in Chennai, India.
Present share-holding pattern:
31% - Warburg Pincus, a leading Global Private Equity Firm.
45% - Institutional Shareholders, Mutual Funds, AIFs and FIPs
Remaining 24% is held by public.
CAMS started Transfer Agency operations during the early 90’s. CAMS’s
handled IPOs like IPCA Laboratories, Wockhardt Ltd, Crossland Research Labs
Ltd etc. CAMSs involved with the Indian Bank Mutual Fund and later started to
handle the operations of Alliance Capital Mutual Funds. It also handled the
oldest Indian Mutual Funds like JM Mutual Fund, ITC Threadneedle, Zurich
India Mutual Fund, Sun & FC Mutual Fund, Taurus Mutual Fund etc.
CAMS employs 6000+ people and offers varied to Mutual Funds, Insurance and
Banking Industries with a network of 270 locations all over India.
The various services offered by CAMS are:
• Services to Mutual Funds using ERP kind of IT platform.
• Services for private equity & venture funds
• Services for Banks and Non-Banking Finance Companies
• NBFC account aggregation services
The Company outsourced services to private insurance companies including
• Marketing and Distribution
• Branch Operations / Restructuring
• Policy Administration & Policy Serving
• Persistency
3
FINANCIAL ANALYSIS:

Net Profit
The Net Profit of CAMS Ltd for the past five financial years increased at an
increasing trend. Except for one-year 2019 when the economy was hit by
pandemic there was a decrease in the value of Net Profit.
The Net Profit for the Year 2021 is recorded at Rs.218cr. A significant
increase in the current financial year with an amount of Rs.54cr. The company
is efficient in converting sales into actual profit.

Figure-1

Net Profit in Crores

250
218

200
160 164

150
107 112
100

50

0
2017 2018 2019 2020 2021

Revenue:
The Revenue Growth of CAMS experienced a consistent increase over the
time of 5 years. The Revenue growth for the year Rs.673cr. Increasing in
revenue can result in higher prices in sales and ensure higher profit margins
over the long term.
Though the growth rate is not significant compared to the previous year 2020,
the company is maintaining consistency in its financial performance.

4
 Figure-2

Revenue in Crores
800

700 651 661 673

605
600

500 458

400

300

200

100

0
2017 2018 2019 2020 2021

Earnings Per Share:

The Earnings per Share of CAMS limited for the financial year 2021 is at
Rs.44.89 per share. The Shareholders are willing to pay Rs.44.89 per share in
the current financial year when compared to the previous financial year 2020
where 1share = Rs.33.65.
The company has seen an increase of Rs.11.24 per share. The determining
factors for an increase in EPS can be due to the increase in the Net Income.
Figure-3

EPS
50
44.89
45
40
32.81 33.65
35
30
25 21.51 23
20
15
10
5
0
2017 2018 2019 2020 2021

5
Shareholding Pattern:
Shareholding pattern of CAMS Limited India is as follows.
The Promoters are holding 30.96% of the Total Share. It includes Great
Terrain Investment Ltd.
Foreign Institutional Investors (FIIs) hold nearly 26.49% of the shares of the
Company. Including Small Cap World Fund, Inc, Goldman Sachs Funds-
Goldman Sachs Emerging Markets Equity Portfolio, Abu Dhabi
Investment Authority.
Domestic Institutional Investors (DIIs) has 15.15% of the shares in CAMS
Ltd. The various HDFC Bank Ltd, SBI small cap fund, SBI Life insurance
co. Ltd.
Public has 27.40% of the total share capital which includes companies like
Housing Development Finance Corporation Limited, HDFC Limited,
Acacia Banyan Partners.

Figure-4

SHAREHOLDING PATTERN
Promoters FIIs DIIs Public

Public Promoters
27% 31%

DIIs
15%

FIIs
27%

6
Long Term Sources of Finances:

The sources of long-term sources of finance refers to institutions or agencies

through which finance for long-period can procured. In case of sole-
proprietorship and partnership firms, long-term finances can be provided by the
owner themselves and by retained profits. In case of Companies whose financial
requirement is large the following are the sources of long-term finance:
a. Equity Share Capital: The Capital of the company raised by offering
shares is known as equity share capital. It is the capital invested by the
owners of the Company.
b. Preference Share Capital: It is the capital that the company raises
through the issuance of Preference Share Capital. These shares come with
a preferential right to avail profits and claim assets during liquidation and
with fixed rate of dividend.
c. Debentures: Debentures are a debt instrument used by the companies to
issue loans by raising capital. Companies use Debentures when they need
to borrow money at a fixed rate of interest for its expansion purpose.
d. Retained Earnings: The undistributed profits of the company that is kept
in the form of General Reserve. It acts as an important source of long-
term finance for companies.
e. Bank Borrowings: It is the process through which repayments are made
by the company for several years to pay off the loan amount borrowed.

7
Analysis of Long-Term sources of Finance of CAMS Ltd:

The Analysis of Long-Term Finance for CAMS Ltd are as follows.

Table-1

Long-Term Sources of Finance (Rupees in Lakhs)

Year 2017 2018 2019 2020 2021
Equity Share Capital
4,876.00 4,876.00 4,876.00 4,876.00 4,876.00
Other Equities
31,268.57 36,399.08 34,345.25 44,032.62 42,091.89
General Reserve
11,035.43 11,035.43 11,035.43 11,035.43 11,035.43
Retained Earnings
20,954.00 26,028.38 24,032.79 33,424.53 30,393.54
Other Comprehensive Equity -720.86 -664.73 -727.97 -789.43 -754.73
ESOP - - -
362.10 1,122.69
Securities Premium Account - - - -
294.96

Non-Current Borrowings

Financial Borrowings
a. Borrowings 0 0 0 0 0
b. Trade Payables 0 0 0 0 0
c. Other Financial Liabilities 0 0 0 6427.36 6135.16
d. Provisions 4228.57 5414.2 6797.27 6944.59 7063.78

The long-term finance of CAMS Ltd for the past 5 years from 2017 to 2021 are
mentioned in the above table. According to the table the following analysis is
made.

8
Equity Share Capital:
Computer Age Management Services Limited is India’s largest Mutual Fund
Transfer Agency serving over 69% of assets of the Indian Mutual Fund
Agency.
The Share capital of the company is given below in the figure.
Figure-5

Share Capital
6000
4876 4876 4876 4876 4876
5000

4000

3000

2000

1000

0
2017 2018 2019 2020 2021

• CAMS Ltd for the past 5 years is raising its long-term source of capital by
issuing the equity shares to its owners. The amount of Equity Shares issued
is constant for the past five years. It is being issued at Rs.4876lakhs.
• Constant share capital indicates that the share capital of the company
remains constant for the years is on account of non-issuance of additional
shares.
• The Company has not accepted any deposits from the Public.
Other Equities:
Other forms of Equity mean any share capital other than Common Stocks,
Convertible Securities. Other Equity means any capital stock other than
Common Shares, Common Share Equivalents options.

9
 Figure-6

Other Equity
50,000.00
44,032.62
45,000.00 42,091.89
40,000.00 36,399.08
34,345.25
35,000.00 31,268.57
30,000.00
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
2017 2018 2019 2020 2021

• The Other Equities for the year 2017 was at Rs.31,268.57lakhs

• It is increasing at a steady trend. Except for the year 2019 where it was
Rs.34,345.25lakhs.
• Although it decreased in the year 2019 there has been a tremendous increase
in the year 2020 by Rs.44.032.62lakhs.
• In the year 2021 the other equities decreased by Rs.1940.79lakhs.
• It results in overall increase to the company’s stockholder’s equity balance,
but as there is decrease trend it indicates that the Company has paid
Dividends on Stock which reduces the share of Retained Earnings.
• CAMS limited is repurchasing its stocks, which results in decrease in
stockholder’s equity.

Other Comprehensive Equity:

The Other Comprehensive Equity includes the unrealized gains and losses
reported in the Equity Column of Balance Sheet.
There is an unrealized loss during the past 5 years in CAMS Limited due to the
hedging transactions or Investment plans.
In the year 2021 it is at Rs. -754.73lakhscompared to the previous year 2019
which is at Rs. -789.43lakhs.

10
Retained Earnings:
Retained Earnings consists of the accumulated income that the company has
held onto rather than paying out in dividend income. Increase in Retained
Earnings is a positive sign but some shareholders view this in a negative sense.
The Retained Earnings of CAMS Limited are as follows:
Figure-7

Retained Earnings
40,000.00

35,000.00 33,424.53
30,393.54
30,000.00
26,028.38
24,032.79
25,000.00
20,954.00
20,000.00

15,000.00

10,000.00

5,000.00

-
2017 2018 2019 2020 2021

• The Retained Earnings for the year 2017 are at Rs.20,954lakhs compared
to the current financial year 2021 at Rs.30,393lakhs.
• Within a span of four years the retained earnings increased to
Rs.9,439.54lakhs.
• Compared to the year 2020 there is a decrease in the amount of retained
earnings by Rs.3030.99lakhs.
• This is due to the payment of Dividend on Stocks from the Retained
Earnings.
• Increase in Retained Earnings results when the company takes in more
money out of its revenue.
• The higher the retained earnings of CAMS Limited, the more likely the
company has earned income over time.

General Reserve:
The General Reserve of CAMS Limited for the past five years is constant at
Rs.11,035.43 lakhs

11
Long-Term Borrowings:
• Computer Age Management Services Limited has not issued
Debentures and any kind of Preference Share in the past five financial
years.
• CAMS Limited is considered as virtually debt-free company.
• The Company does not have any borrowings from the Banks, Financial
Institutions, Government or by issue of debentures.
• The Company has not raised any money by the way of initial public
offer or further public offer including debt-instruments or by the way of
term loans.
• The company has not made any preferential allotment or private
placement of shares or partly convertible debentures during the past five
years.

Trade Payables:
There are no Trade Payables for CAMS Limited for the past 5 years. No-
Debt is good news to the company as this increases the market-share for the
company.

Employee Stock Option Plan:

An Employee Stock Option Plan (ESOP) is an employee benefit that is given by
the company to the employees which gives ownership rights to the workers.
• CAMS Limited issued ESOPs to their employees for the past two
financial years.
• ESOP given in the year 2020 is Rs.362.00lakhs.
• ESOP issued in the year 2021 is Rs.1,122.69lakhs.
• There is a tremendous increase in the value of ESOP issued by the
company in the last two years.
Thus, these are the various sources of Long-Term finance that the company is
utilizing to generate funds.

12
 Table-2

Statement of Changes in Long-Term sources of Funds

Year 2017 2018 2019 2020 2021
Equity Share Capital 0.00 0.00 0.00 0.00
Other Equities 5,130.51 -2,053.83 9,687.37 -1,940.73
General Reserve 0.00 0.00 0.00 0.00
Retained Earnings 5,074.38 -1,995.59 9,391.74 -3,030.99
Other Comprehensive Equity 56.13 -63.24 -61.46 34.70
ESOP 0.00 0.00 362.10 760.59
Securities Premium Account 0.00 0.00 0.00 294.96

Non-Current Borrowings

Financial Borrowings
a. Borrowings 0.00 0.00 0.00 0.00
b. Trade Payables 0.00 0.00 0.00 0.00

The above table demonstrates the changes in the Long-Term source of Funds
from the year 2017 to the year 2021.

13
Short Term Sources of Finances:

Short-Term sources of finance can be defined as credit arrangement provided to

a company for a period less than one year. It is provided to the company to
bridge the gap between income and expenses in short-run and help to manage
its current liabilities.
The main source of short-term financing includes the following:
a) Trade Credit: When a firm buys its supplies and materials on credit from
other firms it is recorded as debt as Accounts-Payable. Trade Credit accounts
for largest single contributor of short-term credit.

b) Commercial Bank Loans: It is an important source of short-term financing.

Banks provide short-term and intermediate-term money for the firm’s growing
financial needs.

c) Commercial Paper: The third source of short-term finance is commercial

paper. It is a form of Promissory notes sold to other business, insurance
companies, pension funds etc. The duration of these commercial paper is for
maximum of 6 months.

d) Secured Loans: Most of the short borrowings are unsecured loans. The
common type of secured loans is generated by providing collateral on accounts
receivable and inventories.

e) Factoring: It is one of the options to consider while searching for short-term

financing. It allows business to obtain immediate capital or money based on
the future attributed income to a particular amount due on accounts receivable.

14
Analysis of Short-Term sources of Finance of CAMS Ltd:

The Analysis of Short-Term sources of Finance of CAMS Ltd for the financial
years 2017 to 2021 is demonstrated in the below table.

Table-3

Short-Term Sources of Finance (Rupees in Lakhs)

Current Liabilities

Financial Liabilities
Short-Term Borrowings 0 0 0 0 0
Trade Payables 2841.63 3387.18 3446.56 3658.38 5201.94
Provisions 785.93 965.8 1948.51 831.58 1233.59
Other Current Liabilities 1257.96 2988.98 4851.84 3462.25 3267.57

Other Financial Liabilities 0 0 0 2130.86 7889.35

Short-Term Borrowings:
Also known as Short-Term debts is the firm’s financial obligation that are
expected to be paid off within one year.
CAMS Limited does not have any kind of short-Term borrowings in the
past five financial years.
This represents the debt-free company, Free from the obligation to pay debt.

15
Trade Credit:
Also known as Trade Payables. It the obligation to pay by the company for the
goods or services that have been acquired on credit from the suppliers in the
ordinary course of Business.
Figure-8

Trade Credit
6000
5201.94
5000

4000 3658.38
3387.18 3446.56
2841.63
3000

2000

1000

0
2017 2018 2019 2020 2021

• The Trade Payables for the 2017 is at Rs.2,841.63lakhs and the

trade payables for the financial year 2021 is at Rs.5201.94lakhs.
• There has been an increase in the amount of Trade Payables by
Rs.2360.31lakhs.
• The need for Trade Credit reached all time highest in the year 2021 which
recorded at Rs.5201.94lakhs.
• This tremendous increase in the Short-Term Finance is due to meet the
needs of the Company.
• Overall, there is significant movement in the value of the Trade Credit over
past five years.

16
Provisions:
Provisions are the funds that are put aside by the company to cover the
unanticipated losses and risks in the future because they are uncertain and
there is no valid certainty regarding the amount and its timing.

Figure-9

Provisions
2500

1948.51
2000

1500
1233.59
965.8
1000 785.93 831.58

500

0
2017 2018 2019 2020 2021

• CAMS Limited had Provisions in the year 2017 at Rs.785.93lakhs.

• Whereas in the financial year 2021 the Provisions increased to
Rs.1233.59lakhs.
• There has been an increase in the value of Provisions by the CAMS Limited
By Rs.447.66Lakhs.
• The Provisions amount hit all time highest in the year 2019 where it was
recorded at Rs.1948.51lakhs.
• Increase in the number of Provisions mean that the borrowers of CAMS
Limited had defaulted earlier and the company is taking precautions to
protect itself from the default payments.
• Thus, decrease in the number of Provisions is a good indicator regarding the
financial performance of the company.

17
Unsecured Borrowings:
Unsecured Borrowings also known as Other Current Liabilities. This is a type
of short-term debt that is not protected by providing any collateral, rather it is
given based on the creditworthiness of the borrower.

Figure-10

Unsecured Borrowings
6000

4851.84
5000

4000 3462.25
3267.57
2988.98
3000

2000
1257.96
1000

0
2017 2018 2019 2020 2021

• CAMS Limited in the year 2017 has Rs.1257.96lakhs worth unsecured

borrowings.
• In the year 2021 the number of unsecured borrowings increased to
Rs.3267.57lakhs.
• If we carefully observe the value of unsecured borrowings rose
exponentially in the year 2019 to Rs.4851.84lakhs.
• This is due to the Payment of the Creditors increased along with it the value
of Provisions also increased.
• This led the company to depend more on the Unsecured Borrowings.

18
COMPARISON WITH PEERS:

Central Depository Services Limited (CDSL):

Central Depository Services Limited is the first listed Indian central
securities depository based in Mumbai. The main Function of CDSL is to
facilitate the holding of dematerialized securities enables securities to be
processed by book entry.
• The Company is almost debt-free, and it is expected to give a good
quarterly return.
• The profit growth over the past five years was 24.10%.
• The stock is trading at 16.14 times the book value.
Motilal Oswal Financial Services (MOFS):
Motilal Oswal Financial Services Limited is an Indian diversified financial
services firm offering a range of financial products and services which ranges
from Investment Banking services to Private Equity Fund.
• The Company has delivered a good quarterly return for the past five
years at 50.76% CAGR
• It has a healthy dividend ratio of 28.74%
• The Stock od the company is trading at 2.99 times the book value.

Now comparing between the financial sources of funds between CAMS, CDSL
and MOFS.

19
First, I have taken the Net Profit of these 3 companies for the past 5 financial
years.
The Net Profit is demonstrated in the below figure.

Figure-11

Net Profit
1400
1197
1200

1000

800
623
600
364
400 290
218201
160 114 164 215
200 107 86 103 112 106

0
2017 2018 2019 2020 2021

CAMS CDSL MOFS

• The Net Profit of the financial services providing agency for the past 5 years
according to the above illustration we can understand that
• When compared to Motilal Oswal Financial Services Ltd, Computer Age
Management Services Ltd is not with par in the Net Profit generated in
the 5 financial years.
• Even though CAMS performance is better than CDSL with there is a lot of
improvement needed for CAMS to compete with MOFS.
• In the current financial year 2021the Net Profit of CAMS is Rs.201cr
whereas CDSL is at Rs.201cr.

20
Analysis of Long-Term Sources of Finance for CAMS, MOFS,
CDSL Limited:

Long-Term Source of Finance:

The total long-term sources of Finance for the three companies the past five
financial year are illustrated in the following figure.
Figure-12

Long-Term Source of Finance

4000
3,531.39
3500
3000 2,764.14
2,593.56
2,381.44
2500
2000
1500 669.18

1000 682.59
469.71 489.09569.61 392.16542.53 412.75502.25 462.29
500 361.45
0
2017 2018 2019 2020 2021

CAMS MOFS CDSL

• The long-term sources of finances for the three companies demonstrated in

the above diagram.
• As we observe the Long-Term financing for Motilal Oswal Financial
Services is having highest sources of financing.
• In the year 2017 the value of financing of Computer Age Management
Services is at Rs.469.71cr, Central Depository Services Limited at
Rs.682.59cr and Motilal Oswal Financial Services at Rs.3531.39cr
• The availability of Finance for CAMS Limited is comparatively low than
other two financial companies.
• This shows the performance of CAMS Limited.
• In the year 2021 the value of financing of Computer Age Management
Services is at Rs.361.45cr, Central Depository Services Limited at
Rs.462.29cr and Motilal Oswal Financial Services at Rs.669.18cr

21
Analysis of Short-Term Sources of Finance for CAMS, MOFS,
CDSL Limited:

Short-Term Source of Finance:

The available short-term sources of finance for the three companies for the
financial year 2017 to 2021 are illustrated in the given diagram.

Table-4

Short-Term Source of Finance (Rs. In Cr)

Year CAMS MOFS CDSL

2017 175.92 3,648.56 147.52

2018 92.96 2,221.87 80.25

2019 102.48 1,517.44 69.11

2020 73.42 1,412.26 70.28

2021 48.86 375.74 54.14

Figure-13

Short-Term Source of Finance

4000
3500
3000
2500
2000
1500
1000
500
0
2017 2018 2019 2020 2021

CAMS MOFS CDSL

22
• From the above illustration we can observe that the short-term finance for
Motilal Oswal Financial Services Ltd is exponentially very high when
compared to the other two companies.
• The reason behind this is Computer Age Management Services Ltd is
virtually a debt-free company and it does not have any short-term
borrowings.
• There are no Short-Term Borrowings for CAMS Ltd and the company has
not issued any form of Commercial Papers to raise short-term funds.
• In the year 2017 the value of financing of Computer Age Management
Services is at Rs.175.921cr, Central Depository Services Limited at
Rs.147.52cr and Motilal Oswal Financial Services at Rs.3648.56cr
• And in the financial year 2021 the value of financing of Computer Age
Management Services is at Rs.48.86cr, Central Depository Services
Limited at Rs.54.14cr and Motilal Oswal Financial Services at
Rs.375.74cr
• The decrease in the value of short-term borrowings is due to the repayment
of the funds earlier taken and proves the self-sufficiency of the companies.

CONCLUSION:
• Computer Age Management Services Limited is almost a debt-free
company.
• The Company has been maintaining a healthy dividend pay-out ratio at
98.08%.
• It has the largest infrastructure providing services of Mutual Funds with
diverse portfolio with Pan-India physical network.
• The growth of the company is also observing an increase trend for the
past five financial year.
• Since it is almost debt-free company the financial risk is reduced to a
greater extent.

Whether CAMS Ltd is a suitable to invest?

Based on my research and findings from the Annual Report and various
websites regarding CAMS Ltd, I can conclude by saying that CAMS Ltd is a
good company to invest in. As it is virtually debt-free company and
performing steadily in the previous five financial years it has lower amount of
risk to new investors based on its assured level of performance.

23
REFERENCES:
• Annual Report of CAMS ltd
https://www.camsonline.com/assets/image/about/pdf/FY_17-18.pdf

• Annual report of CAMS Ltd

https://www.camsonline.com/assets/PDF/Annual_Report/CAMSAnnualReport_2020
_2021.pdf

• CAMS Financial data from Screener and money control

https://www.screener.in/company/CAMS/#shareholding

https://www.moneycontrol.com/india/stockpricequote/onlineservices/computeragema
nagementservices/CAM

• Peer comparison of Motilal Oswal FS

https://www.screener.in/company/MOTILALOFS/consolidated/

• Peer comparison of CDSL

https://www.screener.in/company/CDSL/consolidated/

24