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Central Depository Services Ltd. (CDSL) – Repository of “Value”

Hello Friends!

Here’s my presentation on Central Depository Services Ltd. (CDSL). CDSL is India’s only listed securities depository company, promoted by Asia’s oldest stock exchange, BSE Ltd.

Download “CDSL-Repository-of-Value-Beyond-Quant-May-2018.pdf” CDSL-Repository-of-Value-Beyond-Quant-May-2018.pdf – Downloaded 195 times – 1 MB


  • #2 Player in India’s Duopoly Securities Depository sector.
  • Entry barriers: No depository license has been issued since CDSL’s incorporation in 1999.
  • Depositories will always be in business, due to the legal requirement of mandatory dematerialization of securities.
  • Low penetration of Depositories (only 3.2Cr Demat accounts, in a population of 134Cr) leaves a long runway ahead for incumbents.
  • CDSL has been ramping up extremely fast, and has consistently beaten the #1 player, in adding Demat accounts. Market share of 46.5% (March 31, 2018).
  • So rapid has been CDSL’s ramp-up, that we expect CDSL to become the #1 player by Demat accounts no later than current year FY19.
  • CDSL’s 100% subsidiary CDSL Ventures Ltd. is India’s #1 KYC Agency, with a 65% market share.
    Triggers include entry into the Registrar & Transfer Agent (RTA) space, and possibility of dematerialization being made mandatory for unlisted companies too.
  • Our key concerns are: (i) Business of Depositories could suffer in bear markets, with decline in txn.
    (ii) If new depository licenses were to be issued, it would lead to more competition. (iii) Authorization to CERSAI to act as the central KYC records registry might impact CDSL Ventures Ltd.
  • The stock trades at 22.4x FY19E and 18.2x FY20E earnings.


This material is meant for educational purpose only.

I am NOT a Sebi-registered research analyst. This document is NOT a research report, or a recommendation to buy or sell the securities mentioned herein.

No part of this content should be construed as investment advice or solicitation, or a recommendation to buy or sell securities named therein. The author will not be responsible for the outcome of investments based on this content.

The author does not hold shares in the company covered, as of the date of the document.

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