CDSL share dips 6% as Standard Chartered looks to exit via ₹1,250 cr block deal

Shares of Central Depository Services Ltd (CDSL) on Wednesday fell up to 6.4% to the day's low at ₹1,675 on the NSE amid report that Standard Chartered Bank looks to sell its entire shareholding in the central securities depository. The private lender mulls offloading its entire 7.18% stake in CDSL at a floor price of ₹1,672 per share, which is expected to fetch around ₹1,250 crore to Standard Chartered Bank.

Shares of CDSL opened a gap down at ₹1,718.55 and fell to an intra-day low of ₹1,675, taking the company's m-cap down to ₹17,897.19 crore. At the time of filing of the report, 12,81,018 shares were exchanging hands on the counter. Share of CDSL had touched a 52-week high of ₹2,067.00 on February 9, 2024, up 17.1% from the current share price.

CDSL share surged 2.17% in the past week but fell 10.53% in the past month. On a six-month basis, the scrip has risen 26.69% and has surged 87.98% in the past year.

CDSL provides services to all market participants including exchanges, clearing corporations, depository participants (DPs), issuers and investors.

The company posted strong growth (+52% YoY) in Q3 FY24, led by growth in market-linked revenue and a stable annuity stream. The growth was driven by a jump in transaction revenue, IPO/corporate action, and KYC fetch/creation, offset by seasonally weak e-voting revenue.

The number of demat accounts in Q3 FY23-24 stood at 10.47 + crore which is an addition of approximately 85 lakh demat accounts over 9.62+ crore as of September 30, 2023.

Notably, CDSL maintains a leadership position with a 75.6% market share and 90% incremental share.

HDFC Securities, in its review of the company stock in February, maintained its “BUY” rating, with a target price of ₹2,170, based on 40x FY26E EPS.

Depositories remain a structural play on India’s capital markets buoyed by higher retail participation. CDSL benefits from leadership (in a duopoly), in terms of the number of Demat accounts and steady non-market-linked revenues (from annuity issuer charges).

CDSL maintains and services 10 crore+ demat accounts of investors or beneficial owners (BOs) spread across India. These BOs are serviced by CDSL’s 580+ depository participants (DPs) from over 20,000+ locations. CDSL along with its subsidiaries also provides a host of services to the financial intermediaries and markets. These subsidiaries include CDSL Ventures Ltd, CDSL Insurance Repository Ltd, and CDSL Commodity Repository Ltd.

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