CDSL makes stellar debut; ends 75% higher against issue price

At 10:01 am; the stock was trading at Rs 266, a 79% higher against its IPO price of Rs 149 per share

Central Depository Services (India) Limited (CDSL) made a strong debut by listing at Rs 250, a 68% premium against its initial public offer (IPO) price of Rs 149 on the National Stock Exchange (NSE). CDSL is the first depository to be listed on the country’s stock exchanges.

The stock ended at Rs 260.70, up 4.3% against its listing price, and nearly 75% against its issue price. 

The Rs 525-crore IPO of CDSL saw a whopping 170 times more demand than shares on offer. The issue generated demand worth nearly Rs 63,000 crore. The issue was one of the most oversubscribed in recent times.

The institutional investor portion of the IPO was subscribed 149 times, high net worth individual (HNI) portion was subscribed 563 times and the retail portion was subscribed 24 times.

CDSL is one of the two depositories operating in India, which facilitate the holding of securities in electronic form and enable securities to be processed by book entry. It was originally promoted by BSE, which subsequently divested part of its stake to leading banks as its sponsors.

Most of the local brokerage houses were upbeat on the CDSL IPO and recommended ‘subscribe’ given its strong fundamentals and clean balance sheet.

“CDSL has a unique business model with high entry barriers coupled with decent growth prospects. The average ROE for the last six years has been around 17%, which we believe will sustain going ahead as well. The incremental capital required for doing business in this space is very minimal and this makes it an interesting business model,” Angel Broking said in IPO note.

“CDSL operates in a duopoly and its business has entry barriers in terms of regulatory restrictions, capitalization norms and long gestation periods. It is also gaining ground against its only competitor NSDL by continuously gaining market share (from 46% in FY12 to 60% in FY17) in terms of incremental demat accounts opened annually. Off late, increased public interest in trading and investing in stock markets augur well for the company. Also, under penetration in stock market (2-3%) provides significant opportunity to CDSL,” analyst at India Infoline said in IPO note.

	Listing	Price in Rs					Issue Size	Subscription
Short Name	Date	Issue	Listing	% chg*	LTP	% chg*	Rs crore	Times
Avenue Supermarts	21/03/2017	299.00	640.75	114.3	809.70	170.8	1870	73.41
CDSL	30/06/2017	149	260	74.5	258.3	73.4	525.00	170
Quess Corp	12/07/2016	317.00	503.00	58.7	901.95	184.5	400	81.50
Thyrocare Technologies	09/05/2016	446.00	618.10	38.6	720.05	61.4	479	52.33
Shankara Building Prod	05/04/2017	460.00	632.80	37.6	822.05	78.7	345	28.97
Endurance Technologies	19/10/2016	472.00	647.70	37.2	880.00	86.4	1162	30.92
RBL Bank	31/08/2016	225.00	299.30	33.0	499.80	122.1	1213	48.99
BSE	03/02/2017	806.00	1069.20	32.7	1101.00	36.6	1243	36.11
Advanced Enzyme Tech	01/08/2016	179.20	235.66	31.5	322.15	79.8	412	81.63
Mahanagar Gas	01/07/2016	421.00	519.90	23.5	974.00	131.4	1040	45.49
Equitas Holdings	21/04/2016	110.00	135.25	23.0	149.75	36.1	2177	12.17
HUDCO	19/05/2017	60.00	72.50	20.8	67.10	11.8	1224	79.31
TeamLease Services	12/02/2016	850.00	1021.95	20.2	1338.30	57.4	424	38.75
GNA Axles	26/09/2016	207.00	245.15	18.4	230.00	11.1	130	38.15
Dilip Buildcon	11/08/2016	219.00	251.95	15.0	440.05	100.9	654	15.29
PNB Housing Finance	07/11/2016	775.00	890.60	14.9	1558.95	101.2	3001	20.41
Music Broadcast	17/03/2017	333.00	373.15	12.1	350.00	5.1	489	39.94
Ujjivan Financial Services	10/05/2016	210.00	231.60	10.3	302.90	44.2	882	28.79
S Chand & Company	09/05/2017	670.00	675.85	0.9	469.70	-29.9	729	42.23
LTP : Last traded price in Rs on NSE at 10:14 am
*% change over IPO Price
Peformance of IPO's that subscribed over 10 times against issue size