CDSL shares fall after announcing 1:1 bonus issue of equity shares

Shares of Central Depository Services Limited (CDSL) fell 2.8 per cent at Rs 2,368 per share on the NSE in Tuesday’s intraday trade. This came after the company recommended issuing bonus shares to its shareholders in a 1:1 ratio. 
 

This entails the issuance of 104.5 million equity shares with a face value of Rs 10 each, totaling Rs 104.5 crore.

A 1:1 bonus issue, it effectively doubles the number of shares outstanding. As a result, the stock price adjusts downward to approximately half of its pre-bonus issue level, assuming all other factors remain constant. This adjustment is due to the increased supply of shares without a corresponding increase in the company's overall value.

Post the issuance of bonus shares, the company's equity share capital will increase to Rs 209 crore, the company said in an exchange filing on Monday. 

The issuance of these bonus shares is expected to be completed within two months from the board approval date, on or before September 1, 2024.

In addition to the bonus share issuance, the company's board also approved an increase in its authorised share capital from Rs 150 crore (divided into 15 crore equity shares of Rs 10 each) to Rs 300 crore (divided into 30 crore equity shares of Rs 10 each). 

In Q4FY24, CDSL reported a consolidated net profit of Rs 129.25 crore, marking a significant increase compared to Rs 63.12 crore in Q4FY23. Revenue from operations also saw a substantial surge, rising by 93 per cent to reach Rs 240.78 crore in the same quarter.

The company has total market cap of Rs 25,239 crore and is presently trading at a price to earnings multiple of 60.57 times.  

At 02:35 PM; the stock of the company was trading 0.93 per cent lower at Rs 2,415.25 per share on the NSE. In comparison, the NSE Nifty50 was down marginally by 0.03 per cent at 24,133.40 levels.