NSE-listed stock market-related transactions settlement company, Central Depository Services (CDSL) share price is buzzing ahead of its bonus rewards for investors. On August 13, CDSL shares witnessed selling pressure, however, its weekly performance is strong. In a year, CDSL shares gained by over 114% on the NSE. CDSL's bonus issue allotment comes after the company recently delivered a hefty Rs 22 dividend per share. Broadly, the consensus recommendation of analysts is HOLD on CDSL shares.
CDSL Share Price:
On NSE, CDSL share price ended at Rs 2,527.90 apiece after market hours of August 13, down by 1.8% with a market cap of Rs 26,416.56 crore. This comes after CDSL touched a new 52-week high of Rs 2,667.95 apiece on August 12, hence investors cashed in their gains.
CDSL share's weekly performance is up by 10%, due to fixing the record date of bonus issue in a 1:1 ratio. Last week, CDSL received Sebi's approval for additional investment in India International Bullion Holding IFSC Limited (IIBHL).
YTD, CDSL shares are up by 39%. While in a year, the stock emerged as a multibagger with gains of a whopping 114.3%.
CDSL Bonus Issue:
CDSL fixed Saturday, August 24, 2024, as the record date for the bonus issue 1:1.
As per the regulatory filing, the bonus shares will be issued to the Shareholders of the Company in the ratio of 1:1 i.e., 1 (One) new fully paid-up Equity Share of ₹10/- (Rupees Ten Only) each for every 1 (One) existing fully paid-up Equity Share of ₹10/- (Rupees Ten Only) each held by the eligible Shareholders of the Company as on the Record Date.
CDSL Investment:
Another key development is that CDSL said on NSE that Sebi has approved the additional investment up to Rs 20 crore in IIBHL.
The reason behind the investment is to maintain the net worth in IIBX as per IFSCA. The Board of IIBHL has decided that any investment in IIBX shall be infused by IIBHL including any consortium member of IIBHL.
The tentative timeline of completion of the acquisition process in IIBHL by August 31, 2024.
India International Bullion Holding IFSC Limited is a holding company for Bullion Project. IIBHL is funding both of its subsidiaries namely India International Bullion Exchange IFSC Limited and India International Depository IFSC Limited which is engaged in providing bullion importing platform and depository functions respectively.
CDSL Dividend:
In July 2024, CDSL turned ex-dividend for a final dividend for the financial year 2023-24 of Rs 19/- and a special dividend of Rs 3/- per equity share of the face value of Rs 10/- bringing the total dividend payout to Rs 22/- per equity share.
CDSL Share BUY/HOLD?
As per Trendlyne data, the consensus recommendation from 9 analysts for Central Depository Services (India) Ltd. is HOLD. EPS is expected to grow by 22.3% in FY25
In its latest report, ICICI Securities said,"We factor in FY24-26E revenue/EBITDA/PAT CAGR of 23%/25%/23%. Accordingly, CDSL's core EPS is estimated at INR 44.2/INR 41.6 for FY25/26E, respectively. We also add free cash investments of INR 170 per share to the valuation. Our 40x multiple reflects strong growth in capital markets (effect of higher demat account is permanent), lower regulatory risk among capital market plays, possibility of operating leverage ahead and growth optionality in insurance depository business."
ICICI Securities has maintained HOLD, while revised its target price on CDSL to Rs 2,235 (from INR 2,142) on 40x (unchanged), FY26E core EPS of INR 51.6 (earlier 49.4).
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