CDSL share price jumped nearly 15% today. Why stock is surging

CDSL share price jumped nearly 15% today. Why stock is surging

Shares of Central Depository Services (India) Limited (CDSL) surged nearly 15% on the National Stock Exchange (NSE) on Tuesday with the stock closing at ₹1,242.8 per share, up 14.72%.

‘‘With the action happening in the IPO market, there may be new depositary accounts opening only for these IPOs as July and August look to be the busiest month for IPOs. That, technically means that there may be lot of business for CDSL,’’ said Avinash Gorakshkar, Head of Research at Profitmart Securities.

‘‘So, this may be one of the reasons why markets looking at large topline and profit jump coming in for CDSL as there business is dependent on these accounts that they open,’’ he added.

The second Indian central securities depository based in Mumbai, recently become the first depository to open more than four crore active Demat accounts.

CDSL is one of the two depositories in India and the only listed one in the country. It received certificate of commencement of business from SEBI in February 1999. It facilitates holding and transacting in securities in the electronic form and facilitates settlement of trades on stock exchanges.

CDSL maintains and services 4 crore Demat accounts of investors or beneficial owners (BOs) spread across India. These BOs are serviced by CDSL’s over 580 depository participants (DPs) from over 20,600 locations.

Major shareholders of CDSL include BSE, Canara Bank, HDFC Bank, LIC and Standard Chartered Bank. It offers a host of services through its subsidiaries - CDSL Ventures Limited (CVL), CDSL Insurance Repository Limited (CDSLIR), CDSL Commodity Repository Limited, and CDSL IFSC Limited (CDSL IL).

Separately, BSE shares also surged 9.5% to ₹1,091 per share on the NSE on Tuesday.

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CDSL share price: Depository opens record 4 crore Demat Accounts; adds 1 crore in just 6 months—Anil Singhvi says bullish on exchanges, depositories and BFSI

The strong recovery shown by the Indian stock markets since the massive fall during peak of the Covid 19 pandemic last year has attracted retail investors in the equity market in huge numbers. This has directly benefited Central Depository Services Ltd (CDSL). Amid positive sentiments related to the share market, CDSL said that it has seen retail investors participation almost doubling in the last one year.

See Zee Business Live TV Streaming Below:

CDSL said that it has created a new record by opening 4 crore demat accounts and claimed it has maximum active accounts. “Interestingly, CDSL had around 1 crore demat accounts in September 2015. It took almost five years to double it to 2 crore in January 2020. The increase in CDSL demat accounts picked up going forward as the CDSL had 3crore active accounts by January 2021. It further rose to 4 crore only by July 2021. These are active accounts where trading is being done on regular basis. Retail investors have contributed the maximum in this CDSL’s journey as from 59 to 60 per cent retail investors account in the last year, CDSL now have 70 per cent such accounts,” said Devanshi Ashar of Zee Business.

Even top brokerages like Angel Broking and Motilal Oswal have also reiterated in their presentations that retail investors are also keenly participating in futures market now.

Talking about this success and growing retail participation in the share market, Zee Business Managing Editor Anil Singhvi said equity has emerged as very successful asset class and there is no replacement of it as far as profit generation is concerned. It has established this notion successfully that ‘there is no alternative’ to equities, especially during the last one year.

The Market Guru said he is very bullish on all the exchanges, depositories and Banking, financial services and insurance (BFSI) for the next 10 to 15 years. " One should keep them in their portfolio and forget to generate maximum return out of them in the longer term."

CDSL shares closed at Rs 1,050, up RS 24.80 or 2.42 per cent on NSE on Friday. It has generated over 250 per cent returns for its investors in the past one year.

CDSL share price: Buy CDSL, target price Rs 1075: Chandan Taparia

Chandan Taparia of Motilal Oswal has buy call on Central Depository Services (India) with a target price of Rs 1075.The current market price of Central Depository Services (India) Ltd. is Rs 1034.75 Time period given by analyst is Intra Day when Central Depository Services (India) Ltd. price can reach defined target.Central Depository Services (India) Ltd., incorporated in the year 1997, is a Small Cap company (having a market cap of Rs 10813.14 Crore) operating in Financial Services sector.For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 110.25 Crore, up 6.83 % from last quarter Total Income of Rs 103.20 Crore and up 51.08 % from last year same quarter Total Income of Rs 72.98 Crore. Company reported net profit after tax of Rs 51.64 Crore in latest quarter.Stock gave a consolidation breakout and surpassed its previous hurdle levels