CDSL surges 122.25% from issue price
MUMBAI:Shares of Central Depository Services (India) Ltd (CDSL) surged 122.25% from the issue price of ₹149 per share in a week after their market debut last week on June 30.
CDSL shares rose more than 17% intraday on Friday, closing at ₹331.15 on the National Stock Exchange (NSE). The benchmark Sensex index was up 1.42% while the Nifty gained 1.52% from June 30 to July 7.
During the week, CDSL’s market value rose by ₹726.80 crore to ₹3,460.52 crore, from ₹2,733.72 crore on the listing day.
CDSL, which listed on the National Stock Exchange, saw listing gains of around 75% after opening at ₹250, a 68% premium over its issue price.
The ₹524 crore initial public offering (IPO), which was open between June 19 and 21, was oversubscribed a staggering 170.16 times.
CDSL’s stellar performance beats a bumper rally in Avenue Supermarts Ltd, which listed on March 21. Shares of maverick investor Radhakishan Damanipromoted Avenue Supermarts, operator of supermarket chain D-Mart, have surged around 200% since the day of listing.
Within a week of listing, the Avenue Supermarts stock had jumped 106.25%.
It has maintained its rising trend with a steady flow of volumes.
The stock touched a record high on Friday at ₹910 per share. In terms of market capitalisation, the company is among the 50 most valued.
According to BSE data, Avenue Supermart, with a market value of ₹55,961.66 crore, holds the 48th position in overall ranking on the BSE, ahead of Tata Steel Ltd and Cadila Healthcare Ltd. CDSL is one of India’s two depositories—the other is National Securities Depository Ltd—which hold securities in the electronic form.
Ahead of its IPO, analysts had said the CDSL issue was attractive due to its strong parentage, stable earnings growth, strong margins and decent return on equity of 17% in FY17.
According to Motilal Oswal Securities Ltd, a key positive of CDSL is that it has controlled operating expenses in the last three years, triggering a significant margin expansion of 1,150 basis points to 54% in FY17 from FY15.
CDSL’s revenue grew 17.8% to ₹146 crore over FY15-17 while net profit over the same period grew 24.8% to ₹87 crore.
The debt-free company had cash and investments of ₹551 crore as on March 2017.
The number of CDSL demat accounts have grown at a compound annual growth rate of 8.6% over FY2011-17 to 12.3 million, compared to rival NSDL’s 5.1% over the same period to 15.6 million.
While CDSL has an overall market share of 43% in cumulative demat accounts, on the incremental accounts opened, it had a market share of 59% in FY2017.
The depository has gained market share with higher growth in incremental beneficial owner (BO) accounts over the last three years to 44% in FY17 from 40% in FY14.
Parent BSE Ltd, State Bank of India Ltd (SBI), Bank of Baroda Ltd and The Calcutta Stock Exchange sold around 3.51 crore shares in the public offering. CDSL will not receive any proceeds from the offer.