CDSL IPO: ANOTHER BIG BLAST OF THE YEAR AFTER BSE IPO

COMPANY OVERVIEW

Incorporated in 1999, Central Depository Services (India) Limited (CDSL), a subsidiary of BSE Limited operates as a securities depository in India. They offer various services, such as account opening, dematerialisation, processing delivery and receipt instructions, account statement, re-materialization, pledging, nomination, transmission of securities, change in address, bank account details and SMS services for depository participants.

CDSL also offers facilities to issuers to credit securities to a shareholder’s or applicant’s demat accounts; KYC services in respect of investors in capital markets to capital market intermediaries; and facilities to allow holding of insurance policies in electronic form to the holders of these insurance policies of various insurance companies.

In addition, they provides other online services, such as e-voting, e-locker, national academy depository, electronic access to security information, electronic access to security information and execution of secured transaction, drafting and preparation of wills for succession, and mobile application and transactions using secured texting. It serves investors through intermediaries, such as depository participants, issuer companies, registrar and transfer agents, beneficial owners, and clearing members.

They are the leading securities depository in India by incremental growth of Beneficial Owner (“BO”) accounts over the last three Fiscals and by the total number of registered Depository Participants (“DPs”), as at the end of Fiscal 2016, according to the CRISIL Report.They offer services to the following clients:

• Depository Participants and other capital market intermediaries
• Corporates
• Capital market intermediaries
• Insurance Companies
• Others

It’s services are offered by the above entities

Promoter Cum Bigger Strength

BSE LIMITED is the promoter of the company.

OVERVIEW OF SECURITIES TRADE AND SETTLEMENT PROCESS

OBJECTS

The object of the offer are to:

• Achieve the benefits of listing the equity share on NSE
• Enhance it’s visibility and brand image and provide liquidity to it’s existing shareholders.

The Company will not receive any proceeds of the Offer and all the proceeds of the Offer will go to the Selling Shareholders in the proportion of the Equity Shares offered by them

ISSUE DETAILS

•  Issue Open: 19th June, 2017
•  Issue Closes: 21st June, 2017
•  Issue Type: Book Built Issue IPO
•  Issue Size: 35,167,208 Equity Shares of Rs 10 aggregating up to Rs [400] Cr
•  Face Value: Rs 10 Per Equity Share
•  Issue Price: Rs.145 – Rs.149 Per Equity Share
•  Market Lot: 100 Shares
•  Valuation: 1400 Cr.
•  Minimum Order Quantity: 100 Shares
•   Listing At: NSE

VALUATIONS

As far as Valuations are concerned the IPO seems to be undervalued with a P/E of 19.04     at the upper price band and 16.22 on standalone basis, on lower price band on consolidated  basis P/E stands at 16.22 while on standalone basis 18.94.

COMPANY FINANCIALS 

SUBSCRIPTION SUGGESTIONS BY AUTHOR

Well being the second IPO blast of the year after BSE IPO also being its subsidiary company with an attractive valuations of  19.04 & 16.22 subsequently,and consistent growth in its profits over the years and only peers it has NSDL which is not listed and an attractive business model. Consistent increase in EBITDA margin over the years.

We rate it with a Subscribe rating with a view not only for listing benefits but also for the perspective of medium to long term term investment.