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CDSL raises Rs154 crore from anchor investors ahead of its IPO

LiveMint logoLiveMint 16-06-2017 Swaraj Singh Dhanjal

Mumbai: Securities depository firm Central Depository Services (India) Ltd (CDSL) on Friday said that it has raised Rs154 crore by allotting shares to anchor investors ahead of its initial public offering, which opens on 19 June.

In a statement to stock exchanges, the company said that it has allotted a total of 10.3 million shares to 15 anchor investors at Rs149 per share. CDSL has priced its shares in a price band of Rs145-149 per share for the IPO.

The anchor book is that portion of an IPO that bankers can allot to institutional investors on a discretionary basis. Anchor book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.

Institutional investors who participated in the anchor book allocation included FIL Investments (Mauritius) Ltd, ICICI Prudential Dividend Yield Equity Fund, HDFC Standard Life Insurance Co. Ltd, IDFC Equity Fund, HSBC Indian Equity Mother Fund, Axis Mutual Fund, IIFL Special Opportunities Fund, Abu Dhabi Investment Authority, and Goldman Sachs India Limited.

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

At the upper end of the price band, the share sale will fetch these shareholders a total of Rs524 crore. The company is not raising any capital to invest in its business activities.

BSE, which is selling 27.2 million shares in the IPO, will receive Rs405.5 crore through the IPO (at the upper end of the price band), 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 reduce to 24% after the offering. SBI’s stake will drop to 5%.

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

For depository participants, the company offers dematerialization for a wide range of securities, including equity shares, preference shares, mutual fund units, debt instruments and government securities. For firms, CDSL provides services such as credit of securities to a shareholder’s or an applicant’s demat accounts to give effect to a range of non-cash corporate actions such as bonus issues, subdivision of holdings and conversion of securities in a merger, amalgamation or in an IPO.

It also offers KYC (know your customer) services in respect of investors in Indian capital markets to capital market intermediaries, including to mutual funds. CDSL also offers other online services such as e-voting.

As of 30 April, CDSL had over 12.4 million investor accounts, over 253 billion securities of 9,934 issuers under its custody, representing a total value of Rs18.3 trillion, and 589 registered depository participants who had over 17,000 service centres across India. And, over 15 million KYC records with a market share of approximately 67%, according to the company’s red herring prospectus.

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