So BSE shareholding is going to be 20% by 24% post this OFS.
As per SEBI regulation , promoter group can hold 24% not sure the reason for further diluting it.
May be cdsl is planning a buyback with surplus cash
As per SEBI No promoter sholud hold more than 15% in Depositary
I also think so. After buy back, holding of bse will again increase.
CDSL I believe is at a very interesting sweet spot with multiple income streams + lot of optionality embedded with huge opportunity size.
While some of the known regular segments provide annuity based revenue, some cyclical (eg. listing etc.), and then there is transaction based revenue stream based on shares which are transacted.
The second part on optionality is quite interesting with below legs which has huge opportunity size:
- CCRL: CDSL commodity repository Ltd (subsidiary with JV with BSE and MCX) which caters to commodity segment and I believe this is at very nascent stage in India
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20190213-43
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CDSL Insurance Repository: This has huge scope and high probability that this will become mandatory in coming years. Given the population and penetration of insurance in our country, even with very tiny fees, this can be good incremental revenue stream in future
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NAD: National Academic Depository which caters to academic records; This has started quite well and has huge scope; This will lead to faster admission processes, lesser record keeping and thus should be good incentive for colleges to outsource
We have seen how digitalizing of unlisted shares has now become quite significant revenue stream for the company.
As far as there is no new entrant and CDSL keeps playing smartly by gaining market share from NSDL, these optionality looks quite good. Counter-views welcome.
Disclosure: Hold tracking position
Informative post. @vivek_mashrani. I have been tracking CDSL for some time but hesitant to invest. It is a cash rich company that generates good cash flows. But what happens after that? Where can the co deploy the cash for better returns? There seems to be little reinvestment needs for the nature of business it is in.
Dividends and buy backs might be channels to give back cash to investors but these are not the most efficient use of the capital. Really interested to know what you think.
Well written post about CDSL.
Disc - Invested recently.
This is not kind of business where they will require huge capital for incremental growth. Best capital allocation strategy for them would remain to be dividend and/or buybacks. As far as there are avenues for growth, these businesses can create good shareholder returns.
Anyone knows what this is about ?
Seems like this 1056.09 Lakh correspond to the contingent service tax liabilities. AR 2019 Congingent Liabilities
The key questions here is whether the contingent service tax liability of 3,978.81 Lakh serviced in full?
Secondly, Is the contingent liabilities part of shareholders equity and will be provided on actual basis or it is provided in form of other liabilities. If latter, the move may be positive for balance sheet as the amount of 2928 Lakh will become shareholder equity.
some insight on sabka vikas (legacy dispute resolution) scheme https://www2.deloitte.com/content/dam/Deloitte/in/Documents/tax/in-tax-sabka-vishwas-scheme-noexp.pdf
Disclosure: Invested (2% of Portfolio)
Under the sab ka Vishwas scheme, pay 50% of tax dues and the matter is settled. So the last demand of 2112 laks is closed by them in this manner. Once u pay 50%, the remaining balance 50%, penalties, accrued interest will be waived. Plus no prosecution also. I don’t know much about accounting, but I think the difference between 3978 and 1056 will be written back. Good to see no more indirect tax litigation after this
q3 results
excellent.
@vivek_mashrani
Would like to learn your thoughts on CDSL? This seems a business which should not be impacted due to corona.
Nothing is spared from Corona 
New business listing fees portion will get affected + if small companies close down in worst case or face issues, they might not pay annual fees…
And then there might be regulatory pressure to reduces charges or not allow them to increase if situation persists…lot of moving parts, but yes relatively much lesser impact…
Looks like NAD part under CDSL venture is gone. Curently CDSL is not charging for Acedemic depository service but was waiting for MHRD view on pricing. UGC has directed to transfer NAD related acedemic awards to Digi Locker. A disclosure came yesterday. Will like to listen from management but looks like a future revenue stream is gone.CDSL_08052020145048_DisclosureforNAD08052020.pdf (163.5 KB)