Central Depository Services (India) Ltd (CDSL) is the first listed Indian central securities depository based in Mumbai. The company was initially promoted by the BSE Ltd., which thereafter divested its stake to some top banks of the country. CDSL received the certificate of commencement of business from the Securities and Exchange Board of India (SEBI) in February 1999.
The main role of CDSL is to assist holding of dematerialised securities and enables securities transactions to be processed by book entry. It also facilitates holding and transacting in securities in the electronic form and assist settlement of trades on stock exchanges. These securities include Equities, Debentures, Bonds, Exchange Traded Funds (ETFs), Units of Mutual Funds, Units of Alternate Investment Funds (AIFs), Certificates Of Deposits (CDs), Commercial Papers (CPs), Government Securities (GSecs) and Treasury Bills (TBills). CDSL was listed in the year 2017 on the National Stock Exchange (NSE) through Initial Public Offer (IPO) and thereafter became the first and the only depository to get listed in Asia-Pacific region and second in the World.
FINANCE INDUSTRY IN INDIA
• India has a diversified monetary sector which is undergoing speedy growth, both in terms of pre- existing financial services firm’s along with new entities. The sector comprises Commercial Banks, Insurance Companies, NBFCs, Co-Operatives, Pension Funds, Mutual Funds and many more. India is unquestionably one of the world's most lively capital markets.
• The Government of India along with Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Scale Enterprises (MSMEs). These include launching Credit Guarantee Fund Scheme for MSMEs, issuing directive to banks concerning security requirements and setting up a Micro Units Development and Refinance Agency.
• As of January 2021, AUM managed by the mutual funds industry stood at Rs. 32.00 lakh crore (approximately). Another crucial component of India’s financial industry is the fast pace insurance industry. The total first year premium of life insurance companies reached Rs. 2.59 lakh crore (approximately) in FY20.
• The government has accepted 100% FDI for insurance mediators and increased FDI limit in the insurance sector to 74% from 49% under the Union Budget 2021-22.
• India is expected to be the fourth largest private wealth market worldwide by 2028 and India's mobile wallet industry is estimated to grow at a Compound Annual Growth Rate (CAGR) of 150% to reach US$ 4.4 billion ( approximately ) by 2022, while mobile wallet transactions will touch Rs. 32 trillion (approximately) during the same period.
COMPANY PERSPECTIVE AND REVIEW
• The financial performance of the company has been encouraging with a net profit of 10,671.82 Lakhs for the FY 2020. Motivated by strong performance, the company has suggested a dividend of 4.50 per share, highest in the past of the company History.
• As of March 31, 2020, the company has 599 Depository Participants (approximately) servicing across 28 states and 8 union territories of the country.
• The total active BO (Beneficial Owner) accounts of the company grew at a CAGR (Compounded Annual Growth Rate) of 19% from 1.08 crore in FY 2015-16 to 2.12 crore in FY 2019-20.
• The technical momentum of the scrip is very bullish indicating positive investor sentiments.
• Profit After Tax of the company grew by 84 % in the FY March 2021.
• Good financials in a growing market make the stock a good long term investment prospect.