Home >market >stock-market-news >CDSL shares close 75% higher on stock market debut

Shares of Central Depository Services (India) Ltd (CDSL) rose nearly 75% on their debut on Friday, logging the second-highest listing gains in nearly six years, after the company’s Rs524 crore initial public offering (IPO) received a robust subscription of more than 170 times when it closed earlier this month.

Before CDSL, Avenue Supermarts Ltd, which listed on the bourses on 21 March, had seen a whopping 114.30% gains on the first day. In September 2011, shares of PG Electroplast Ltd gained 96.02% on listing day.

CDSL shares opened 68% higher on the National Stock Exchange (NSE) at Rs250 a piece, compared to the issue price of Rs149, which was the upper end of the price band of Rs145-149 per share.

CDSL shares closed 74.97% higher at Rs260.70, while the exchange’s 50-share Nifty index closed up 0.18% at 9520.90 points. Earlier in the day, the shares touched a high of Rs269.95 and a low of Rs250.

“The (CDSL) stock was priced attractively, and hence it saw strong listing gains. At this point, it seems to be fairly priced," said Rakesh Tarway, head of research at Reliance Securities Ltd.

“If an investor has a long-term perspective, this stock is capable of returning 12-14% return annually, due to increasing participation in the financial market," added Tarway.

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

BSE, which sold 27.2 million shares in the IPO, received Rs405.5 crore, 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 fall to 24% after the offering. SBI’s stake will drop to 5%.

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

BSE Ltd., which was listed on 2 February, is up 33.19% from its issue price. It was the first stock exchange to get listed in India.

According to Amar Ambani, head of research at IIFL Wealth Management Ltd., the BSE stock clearly has upsides from the current level.

“The cash levels act as a cushion. Listing of CDSL also unlocks value," said Ambani

“BSE’s business is bound to grow, with equities gaining favour as an asset class, compared to earlier times," added Ambani.

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