India: CDSL IPO set for June 19, price band fixed

Photo: Livemint

Securities depository firm Central Depository Services (India) Ltd (CDSL) on Monday said it plans to launch its over Rs500 crore initial public offering (IPO) on 19 June.

CDSL has priced its shares in a price band of Rs145-149 per share.

The IPO, a pure offer for sale, will see the company’s existing shareholders—stock exchange BSE India Ltd, the country’s largest lender State Bank of India Ltd (SBI), Bank of Baroda Ltd and The Calcutta Stock Exchange—sell around 35.16 million shares.

At the upper end of the price band, the share sale will fetch these shareholders a total of Rs524 crore. The company is not raising any capital to invest in its business activities.

BSE, which is selling 27.2 million shares in the IPO, will receive Rs405.5 crore through the IPO (at the upper end of the price band), while other sellers such as SBI, Bank of Baroda and The Calcutta Stock Exchange will make Rs71.1 crore, Rs32.3 crore and Rs14.9 crore, respectively.

Collectively, these selling shareholders own a 65.65% stake in CDSL. BSE, which owns a 50.05% stake in the company, will see its stake reduce to 24% after the offering. SBI’s stake will drop to 5%.

CDSL serves various customers such as depository participants, companies, capital market intermediaries and insurance companies.

For depository participants, the company offers dematerialization for a wide range of securities, including equity shares, preference shares, mutual fund units, debt instruments and government securities. For firms, CDSL provides services such as credit of securities to a shareholder’s or an applicant’s demat accounts to give effect to a range of non-cash corporate actions such as bonus issues, subdivision of holdings and conversion of securities in a merger, amalgamation or in an IPO.

It also offers KYC services in respect of investors in Indian capital markets to capital market intermediaries, including to mutual funds. CDSL also offers other online services such as e-voting.

As of 30 April, CDSL had over 12.4 million investor accounts, over 253 billion securities of 9,934 issuers under its custody, representing a total value of Rs18.3 trillion, and 589 registered depository participants who had over 17,000 service centres across India. And, over 15 million KYC records with a market share of approximately 67%, according to the company’s red herring prospectus.

For fiscal 2017, CDSL recorded a revenue of Rs155.2 crore, up from a revenue of Rs133.1 crore it reported in the previous fiscal. It reported a profit of Rs67.8 crore in 2016-17, down from Rs76.8 crore in the previous year.

Last week, Mint reported that several firms, including CDSL, are gearing up to launch IPOs in June. These include private equity firm ChrysCapital-backed pharma company Eris Lifesciences, telecom equipment maker Tejas Networks Ltd and small finance bank Au Small Finance Bank Ltd. Collectively, these four are looking to raise over Rs5,000 crore through their initial share sales. So far this year, eight firms have raised Rs6,335.83 crore through IPOs, while last year, 26 companies raised Rs26,493.84 crore through this route.

Also Read: India: Central Depository Services files draft papers for IPO

India: BSE looks to divest up to 30% in CDSL through IPO

This article was first published on Livemint.com