CDSL IPO offers growth at a reasonable price

Revenues of NSDL have grown at a CAGR of 12% over the previous four financial year years

High operating profit margins, stable revenue streams along with the addition of new growth avenues strengthen the prospects of India's second largest depository - Central Depository Services (CDSL). Promoted by BSE, the company is looking to raise up to Rs 524 crore through its initial public offering (IPO) slated to open for subscription on June 19. The depository, which holds securities in an electronic form, operates in an industry with high entry barriers and has limited capex requirements going forward.

Large part of its costs are towards technology upgradations and employee-related expenses, which are more or less fixed. With stable