IPO-bound CMS Info Systems commercially launches remote ATM monitoring service

The IPO-bound CMS Info Systems, the largest cash management company in terms of the number of ATMs and retail pick-up points, is commercially launching its remote ATM monitoring service in a big way and will scale it up over the next six months covering around 20,000 such units.

Fully owned by Baring Private Equity Asia, CMS Info Systems is also the third largest ATM cash management company worldwide based on number of machines serviced.

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Baring owns 100 per cent of the Rs 1,300-crore company through its affiliate Sion Investment Holdings and the company is awaiting the Sebi nod to hit the market with a Rs 2,000-crore share sale, which will be an OFS (offer for sale).

It was founded in 2009 in partnership with Rajiv Kaul (ex-CEO of Microsoft India and currently the vice-chairman and chief executive) through a demerger of the IT business of CMS Computers. The promoters family in 2015 sold it fully to private equity major Blackstone, and since then has undergone three ownership changes. For the past 12 years, the group has been with private equity players.

"In the middle of the pandemic, banks wanted us to be inventive about cash management and ATM security and we found remote monitoring of ATMs as an effective way to secure them. Accordingly, we began piloting the same a few months back and now are fully ready to commercially launch it and scale it up over the next six months across 20,000 ATMs," Rajiv Kaul told PTI on Friday.

Of this, almost 10,000 cash vending machines will be of the SBI Group, said Kaul who is also a whole-time director.

Of the 20,000 ATMs it plans to cover remotely, it already has an order book for 14,920 ATM sites as of July 2021 based on two contract wins of 9,520 and 5,400 ATMs, respectively, he said, adding another 5,000-odd are being roped in.

Since the company is headed for IPO, Kaul did not share any potential revenue outlook from the nascent remote monitoring of ATMs for him or for the industry, but according to analysts by covering 20,000 machines, CMS can easily earn an additional revenue of Rs 130 crore in the first year of operations as each ATM covered will fetch Rs 60,000-65,000 per annum in service fee. Accordingly, if a large number of ATMs are remotely monitored, this can be an as big as over Rs 3,000 crore industry.

CMS closed FY'21 with a revenue of Rs 1,310 crore from which it earned Rs 170 crore in net profit. Its technology services arm, which fetches 30 per cent of the topline, is sitting on Rs 2,000-crore order book which has to be completed over the next six years.

As much as 70 per cent of the income come from cash management services, which is clipping at 4 per cent per annum, Kaul said.

CMS' business includes installing, maintaining and managing assets and technology solutions on end-to-end outsourced basis for banks under long-term contracts, handling cash across retail touch points.

Its has pan-India fleet of 3,911 cash vans and network of 224 branches and offices as of March 2021. Its fleet cover 741 districs across all the states and union territories, except the Lakshwadeep and through its network, it serves over 1,33,000 business points across ATM cash management, retail cash management and managed services businesses.

In fiscals 2019, 2020 and 2021, it serviced 41,836, 44,497 and 40,249 retail pick-up points, respectively, through its fleet of over 3,900 cash vans, over 220 offices, according to the IPO document and during these years it serviced 52,691, 58,458 and 62,919 ATMs, respectively.

In fiscal 2021, it completed 6.7 million ATM activities and 6 million retail cash management pick-ups; and it received an average of 9,276 ATM first line maintenance calls per day.