CMS Info Systems shares drop by 8% following Rs 1,163-crore block deal

Shares of CMS Info Systems Ltd experienced a nearly 8 percent decline on August 10th as a substantial block deal involving 3.2 crore shares, equivalent to a 21.6 percent stake in the company worth Rs 1,163 crore, took place. The transaction, involving a group of traders, led to a notable shift in ownership, sparking a drop in the company’s share price.

The identities of the buyers and sellers in this significant block deal have not yet been disclosed. At 10 am, the stock was trading at Rs 361 on the Bombay Stock Exchange (BSE), marking an 8 percent decrease from its previous closing price. Simultaneously, India’s benchmark index, the Sensex, also experienced a slight decline of 0.3 percent, resting at 65,805 points.

This recent block deal is reminiscent of a similar event in June, during which CMS Info Systems witnessed the offloading of a 13.8 percent stake in the company worth approximately Rs 638 crore by its promoter, Sion Investment Holdings Pte Limited, an affiliate of Baring Private Equity Asia. Renowned investors such as Abu Dhabi Investment, Norges Bank, and ValueQuest participated in acquiring shares in the company during that transaction.

Despite these ownership shifts, CMS Info Systems reported a commendable 22 percent year-on-year increase in net profit for the April-June quarter, amounting to Rs 84.28 crore compared to Rs 69 crore in the previous year. The company’s consolidated revenue for the quarter also demonstrated growth, standing at Rs 518.25 crore, reflecting a 13.72 percent increase from the previous year.

Rajiv Kaul, Executive Vice-Chairman, Whole-time Director, and CEO of CMS Info Systems, emphasized the positive performance, stating, “We are happy to report another quarter of 20 percent-plus earnings growth, led by market leadership in cash logistics and the scale-up of our managed services and technology business.” Kaul acknowledged that the quarter faced challenges from unseasonal rain affecting rural consumption and the withdrawal of Rs 2,000 currency notes, factors that compounded the traditional weakness of the quarter. He expressed the company’s ongoing focus on achieving its strategic growth objective of doubling revenues between FY21 and FY25.