Set to become the first depository to list on the domestic stock exchange, BSE promoted CDSL has fixed the price band at Rs 145-149 to raise more than Rs 500 crore from its initial public offering (IPO). The Central Depository Services (India) (CDSL) IPO would hit the capital markets on June 19. The public issue of CDSL, which would end on June 21, involves its existing shareholders, including BSE, offloading over 3.5 crore shares through the offer-for-sale (OFS) route.
At the higher end of the price band the shares are estimated to fetch around Rs 524 crore. BSE, which currently holds 50.05 per cent stake in CDSL, would offload 2.72 crore shares, representing 26.05 per cent of its holding in the depository, to meet with Sebi norms. Under the regulations, a stock exchange cannot have more than 24 per cent in a depository.
State Bank of India (SBI), Bank of Baroda, The Calcutta Stock Exchange, are other CDSL shareholders which would be offloading shares through the IPO. The depository would be listed on the National Stock Exchange (NSE). CDSL promoter BSE, which became the first listed stock exchange in the country, earlier this year, is also listed on the NSE.
CDSL gets its revenues from transaction charges, account maintenance charges and settlement charges paid by depository participants (DPs) as well as annual fees, corporate action and e-voting charges paid by companies whose securities are admitted in the depository’s systems.
CDSL’s total revenue rose by average of 13.33 per cent from Rs 145.5 crore in 2014-15 to Rs 186.85 crore in 2016-17. It’s net profit rose at an average of 21.96 per cent from Rs 57.67 crore in 2014-15 to Rs 85.78 crore in 2016-17.
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Talking to reporters about various growth drivers, CDSL managing director and chief executive P S Reddy said that a commodity repository is likely to be set up in the next few months and also expressed hope that a single demat account for all financial asset classes would be allowed soon.
“Commodity repository would be a growth driver for us. We have got in-principle approval from the Warehousing Development and Regulatory Authority (WDRA) and it is likely to be launched in 2-3 months,” Reddy told reporters here.
“If the single demat account is a reality, we will roll out other products and service all product clasess in the financial sector,” he added. CDSL, which allows investors to deposit securities by opening an account in electronic form (dematerialised), has a 45 per cent market share in terms of number of accounts. It has nearly 1.25 crore accounts, as on May 31, 2017.
NSDL, which is promoted by NSE, is the second depository in the country and has about 1.58 crore accounts.
The global coordinators and book running lead managers (GCBRLM) to the offer are Axis Capital, Edelweiss Financial Services, Nomura Financial Advisory and Securities and SBI Capital Markets. The book running lead managers are Haitong Securities, IDBI Capital Markets & Securities and Yes Securities (India).