Indian stock markets may have succumbed the gains from the all-time peaks achieved in January 2018 but the financial year 2017-2018 has been a hit for many stocks and sectors including the key equity indices Sensex and Nifty. The benchmark indicators of India’s stock market Sensex and Nifty claimed the milestone levels of 36,000 and 11,000 for the first time ever with blue-chip stocks such as Reliance Industries, Brittania, Titan Company, Bajaj Finance, HUL, Maruti Suzuki and Avenue Supermarts rising up to 110%. Out of the major leaders in the domestic equities in FY18, we bring to you a stock which was subscribed 170 times during its IPO, surged 75% on the listing-day and has a nine-month return of 90% from issue price to buy and earn 30% more.
Shares of Mumbai-based depository services provider CDSL saw an insanely high subscription during the three-day bidding process last year in the month of June. At the end of the third day of bidding, CDSL’s Rs 523 crore initial share sale got subscribed as high as 170 times. A huge bidding was observed in the categories of institutional investors (148 times) and HNIs (563 times) following which the stock of CDSL saw a blockbuster opening on stock markets. The stock of CDSL skyrocketed as much as 80% before closing up 75% to Rs 260 as against an issue price of Rs 149. Shares of Central Depository Services (India) Ltd have a nine-month return of 91% from the IPO price. The stock of CDSL has risen 91.27% to Rs 285 from the issue price of Rs 149 in the span of last nine months.
The research and brokerage firm Axis Securities has given a ‘buy’ rating with a target price of Rs 370 which implies an upside of 29.82% from the current market price of Rs 285. “CDSL has a strong stream of annuity-based revenue. This comes with an optionality of at least some of the various businesses of CDSL Ventures ticking (Insurance, GST Suvidha, NAD, Warehouse receipts etc),” Axis Securities said in a report. The cost structure of CDSL is largely fixed with incremental revenues flowing through to the EBITDA and with the minimal capital expenditure requirements, we expect consistent growth in free cash flows generation for CDSL, Axis Securities added.
India’s oldest stock exchange Bombay Stock Exchange is the chief promoter of CDSL along with big banks such as State Bank of India, HDFC Bank, Axis Bank, Bank of Baroda, Bank of India, Union Bank of India and Standard Chartered Bank.
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