Baring Asia makes successful exit from CMS Info Systems

The company offloaded its remaining 26.7% holding, or 41.77 million shares, through a block deal on Tuesday, as per the term sheet reviewed by Mint. The sale, estimated to be worth ₹1,503.8 crore, was conducted at a floor price of ₹370 per share, a 7% discount from the Monday’s closing price on the National Stock Exchange (NSE). IIFL Securities managed the sale on behalf of the promoter.

This move marks a successful exit for Baring Asia, which had acquired 100% stake in CMS Info Systems from Blackstone and the Grover family in 2015 for ₹2,000 crore. 

While the firm sold partial stake during the company’s public market debut in 2021 scooping up ₹2,000 crore, it sold around 13.8% stake for ₹638 crore in June 2023 for ₹300.23 per share through a block trade. Again, in August 2023, the firm sold 19.4% stake for ₹1,071 crore.

People with knowledge of the deal said this translates to nearly a fourfold return on their investment, potentially positioning it as one of Baring Asia’s most successful exits in India.

Following the announcement, CMS Info Systems’ share price witnessed a dip, falling to ₹375.50 per share on the NSE before closing at ₹385.75. 

For Barings PE Asia, this is its second exit through capital markets after it sold its position in Coforge. Last year, the firm sold its remaining 26.6% of stake in the tech company for ₹7,684 crore, fetching it manifold returns.

In the past, it exited from Hexaware Technologies, Citius Tech and Lafarge India have been multibagger for Barings PE Asia, data from Venture Intelligence, a private equity and venture capital data provider shows.

Blackstone, in collaboration with former Microsoft India CEO Rajiv Kaul, had initially acquired a majority stake in CMS Info Systems from the founding Grover family in 2009, investing a total of ₹280 crore in two tranches for a 53% holding.

In the past year, the company has given a positive return of 40% to investors, significantly higher than the Nifty 50 index return of 27.6%.

CMS Info Systems Ltd listed on 31 December, 2021. Cash management company made a tepid market debut. Shares of CMS Info Systems were listed at a premium of 1.94% at ₹220.20 on NSE compared to the issue price of ₹216.

Financial sponsors such as Blackstone, Bain, KKR and Advent among others have been exiting their positions in listed firms through large block trades since beginning of last year. The depth of Indian stock markets and a buoyant domestic institutional investor base has helped absorb the flood of block deals in the recent past. 

The successful exits through the capital markets have helped build confidence among the financial sponsors on the viability of such trades as an exit option and has encouraged them to buy more such companies and list them.

“The biggest story in India, over the last 4–5 years, has really been the level of maturity and depth that capital markets in India have evolved into. It’s been a sea change” said Rohan Suri, managing director, KKR at an Indian Venture Capital and Alternative Investment Industry, or IVCA, event in Mumbai on Monday highlighting the depth of capital markets in India. 

“Quite a few exits that we’ve solely been exited on the Indian capital markets, and these are large quantum of capital that we have returned through tapping the capital markets in India, which frankly 10 years ago, wasn’t something that we would potentially even think of, let alone underwrite,” he added.

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Published: 27 Feb 2024, 06:21 PM IST