CDSL is 2nd largest depository in India with 44% market share in terms as on FY17. However, it is noteworthy that CDSL held 60% market share of FY17 incremental BO accounts at 13.7% YoY growth. CDSL has been
gaining market share in recent times which provides us comfort in terms
of visibility of revenue growth.
Valuation
Steady growth, asset-light nature of business and decent RoE of ~20%
shall enable the stock to command high valuation. Asset light nature of
business enables the company to distribute 35-50% of profits as
dividend. In FY17, it had paid ` 3/share as dividend. The IPO is
attractively priced with TTM PE of 18x at higher price band of ` 149.
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