The Rs 525-crore Initial Public Offer (IPO) of Central Depository Services (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. Recent IPOs such as Avenue Supermarts, operator of DMart Chain, was subscribed
104 times, while that of state-owned Hudco
saw nearly 80 times subscription.
players said in CDLS’s stable earnings growth, attractive valuations and return on equity attracted lot of investors towards the IPO, which saw nearly 1.8 million applications.
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
The high demand in the HNI segment was on expectations of high listing day gains, said brokers. Notably, most of the recent IPOs, such as Tejas Networks and Eris Lifesciences, were shunned by HNIs.
The price band for the CDSL
IPO was Rs 145 to Rs 149 per share. At the top-end of the price band, CDSL
will be valued at around Rs 1,550 crore. For the year FY17, CDSL
had reported the net profit of Rs 85.8 crore on revenues of Rs 186.9 crore. At the IPO price, the company was valued at around 17.5 times its FY17 earnings.
Set up in 1999, CDSL
is among the only two depositories in the country along with the National Securities Depository
(NSDL). Both CDSL
and NSDL facilitate holding of securities in electronic (dematerialised) format. As of March 2017, CDSL
managed 12.3 million demat accounts, while NDSL handled 15.6 million. CDSL
charges annual issuer fees for holding of securities in electronic form. Besides, it also generates revenues from other services such as electronic voting, documents storage, processing of know your customer
(KYC) applications, processing fees for corporate actions like dividend payout and buybacks.
After BSE, CDSL
is the second market
infrastructure institution (MII) to go public. Just like the BSE, CDSL, too, will be listed only on the National Stock Exchange