CDSL shares made a spectacular debut on Friday, opening at Rs 250 on the National Stock Exchange at a premium of Rs 101 to the issue price of Rs 149, and soon rose further to Rs 268 — recording a gain of about 80%, after its IPO got highest ever subscription earlier this month. The listing gain was greater than the grey market premium of Rs 85-90 which was being quoted ahead of the IPO, as was reported by various news organisations, returning more than the required profits to investors, especially high networth individuals.
Earlier last week, Central Depository Services (India) Ltd’s Rs 370 crore IPO was subscribed 169.41 times at the close of bidding. This massive response all types of investors resulted in more than Rs 62,929 crore worth of bids against issue size of Rs 369.9 crore (excluding anchor investors’ portion). Against an issue size of 2.48 crore shares, bids for more than 422 crore equity shares were received. Of their respective quota of reserved shares, employees bid 1.40 times, retail investors bid 22.30 times, institutional investors bid an impressive 148.71 times, and non-institutional investors bid a humungous 563.02 times.
Ahead of the IPO, CDSL raised Rs 154.07 crore by issuing 1.03 crore equity shares to 15 anchor investors including SBI Magnum Tax Gain Scheme, ICICI Prudential, HSBC Indian Equity Mother Fund, Abu Dhabi Investment Authority–Behave, FIL Investments (Mauritius) and Goldman Sachs India.
The company is one of the two depositories in India which naturally makes it a sought-after upcoming IPO. NSE’s NSDL is the only competitor for CDSL. Just like BSE was the first stock exchange to list in India, CDSL will be the first depository to be quoted on an Indian stock exchange.
CDSL was established in 1997 by BSE, which holds a 50.05% equity stake in the depository unit. In addition to BSE, SBI and Bank of Baroda will also reduce their shareholding while Calcutta Stock Exchange will sell all the 1,000,000 shares it owns.
Brokerage houses had recommended subscribing to the issue citing strong parentage, steady growth, a decent return on equity, and high barriers to entry. However, there are risks as well, such as losses from an interruption in the IT systems or revenue loss from falling trading volumes.