CDSL Soars 13% to Record High Amid Bonus Issue Talks

In intraday trading on Friday, shares of Central Depository Services (India) Limited (CDSL) surged 13% to a record high of Rs 2,260 on the National Stock Exchange (NSE). This increase came after the business declared that on July 2, 2024, its board will review a first bonus issuance. The share price increased over its June 3 high of Rs 2,200.

“The board of directors of CDSL is scheduled to meet on Tuesday, July 02, 2024, among other things, to consider and approve the proposal for issuance of bonus shares, if any, subject to the approval of the company’s shareholders,” the business said in an exchange filing. At 11:20 a.m., CDSL was up 12% at Rs 2,248.60, much outperforming the 0.33% increase in the Nifty 50. A total of 7.66 million equity shares were exchanged at the counter, according to exchange data.

The stock of CDSL has gained 103% over the last year, more than doubling, while the benchmark index has increased by around 26%. Since making its debut on the stock market on June 30, 2017, CDSL has continuously produced impressive results. The company provides a range of depository services to a number of Indian capital markets sub-sectors, including mutual funds and AIFs, as well as individual and institutional investors.

The operating revenue of CDSL is derived from transaction-based fees received from depository participants and set annual charges paid from registered issuing entities. A vast range of instruments, including equity shares, preference shares, bonds issued by public and private corporations, mutual fund units, government securities, commercial documents, and certificates of deposit, are dematerialized by the company.

Along with National Securities Depository Ltd. (NSDL), CDSL is one of India’s two top depositories; it makes it easier for traders to complete their deals through Demat accounts and for assets to be electronically stored and exchanged. With 10.4 crore accounts under management, CDSL became the first listed depository in the country to establish more than 10 crore demat accounts in November.

With the backing of prominent organizations such as the State Bank of India, Bank of India, and Bombay Stock Exchange, CDSL has demonstrated impressive expansion propelled by a noteworthy surge in demat accounts. In a recent block deal, BSE sold a 4.54% interest in CDSL. CDSL receives its revenue from the transaction fees, settlement fees, and account maintenance fees paid by its approximately 583 registered depository participants.

In conclusion, CDSL’s stock has achieved remarkable returns, rising 107% in the last 12 months alone. It has experienced a remarkable return of 908% over the last five years and a rally of 128% over the previous three years since its market debut. The company’s optimistic outlook is further enhanced by the planned board meeting on July 2nd to discuss the bonus issue.

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