Computer Age Management Services (CAMS), the largest mutual fund registrar and transfer agent with around 68 per cent market share, expects its non-mutual fund RTA businesses to contribute around 20 per cent of total revenue over the next two to three years.
This comes as the company scales up payment services and builds new revenue streams from DPDP compliance, account aggregation, and other businesses.
“Non-mutual fund businesses currently account for 15-16 per cent of the company’s revenue, up from less than 10 per cent a few years ago. We will get it up to 20 per cent pretty soon, in the next at least two to three years,” Ram Charan Sesharaman, Chief Financial Officer, CAMS, told businessline in a recent interaction.
CAMS is targeting faster growth in non-core businesses even as its core mutual fund business continues to expand at 15-18 per cent annually.
CAMS has been expanding into payments, alternative investment fund (AIF) services, KYC registration, insurance repositories, analytics and account aggregator technology services. The latest among these is a product for Digital Personal Data Protection (DPDP) compliance.
“Everything is a platform, everything is a non-linear kind of revenue growth,” the CFO said.
Payments biggest growth driver
Payments services, currently CAMS’ largest non-mutual fund business, is expected to reach ₹100 crore in revenue this year, according to the CFO.
The payments business has expanded from processing systematic investment plan (SIP) mandates and collections for mutual funds, to offering a range of services. We plan to focus on financial services and select adjacent segments, while staying away from e-commerce, cryptocurrency and gaming, Sesharaman said.
Account aggregator and DPDP
Account aggregation remains a longer-term opportunity, the CFO said, noting that the business has yet to achieve sustainable economics given the low pricing, limited use cases and uneven participation.
“The business currently generates an estimated ₹5-6 crore in annual revenue, with revenue potentially reaching ₹10 crore at most,” he said. “The volumes, once they start coming, will get better, but it is a thing for the future,” he added.
In a natural progression to this, CAMS recently also launched ConsenPro, a tech product for DPDP compliance. Built entirely in-house, the platform is designed to help companies discover where personal data is stored, map data flows and manage consent, including processes for withdrawing consent and purging data where required.
Investing for the future
The CFO said that CAMS is treating its newer businesses as a portfolio of opportunities, rather than expecting every segment to become profitable immediately, he said, noting that CAMS was investing ahead of demand to avoid being left behind when adoption picks up.
The broader strategy is to reduce dependence on the mutual fund RTA business without compromising its established profitability, he said. We have dedicated teams and technology platforms for each of the newer verticals to ensure separate attention, he added.