Capitaline

Analyst Meet / AGM 28-Oct-20

Conference Call

Central Depository Services (CDSL)

New system of margin pledge is expected to create a normal routine income stream

Central Depository Services conducted a conference call on 27 October 2020 to discuss its financial results for the quarter ended September 2020. Nehal Vora, MD&CEO of the company addressed the call: Highlights: The company added record high number of demat accounts at 29 lakh in Q2FY2021 which is highest in the history of the company driven by its technology and software platforms. The company had added about 20 lakh account in Q1FY2021 and 7-8 lakh demat account in Q2FY2020. The significant portion of demat account are active accounts. The focus of the company is to create safe, secure and sustainable platform for the investors. The total number of demat account with the company has increased to 2.61 crore end September 2020 and the company continues to remain the largest demat account company. The company has 593 depository participants covering 20500 locations accounting for 95% of the pin codes in India. The company has created an AGM platform where companies can convene AGM through video conferencing. An e- voting platform has also been created. The large number of companies have used and continue to use CDSL platform to convene the AGMs. The company expects this business will continue even after the pandemic as it provides a lot of convenience. The company is also providing email service where companies can send emails to their shareholders in safe and secure way. The new system of margin pledge in securities market is expected to create a normal routine income stream for company every month. The margin please charges are included in transaction revenue. KRA volumes have increased by 11 7% y-o-y in H1FY2021 driven by the buoyant market conditions. E-KYC records show a marginal declined to 5.84 lakh in H1FY2021 from 6.74 lakh in H1FY2020, while the number of RTA companies which have received services have reached to 539 end September 2020 from 296 a year ago. The issuer fee is due for increase, but SEBI has to decide on the issuer charges. The admin and other expenses increase is on account of expenses of SMS that has been made compulsory by SEBI, while expenses made on technology and software also contributed to the overall expenses. The company is hopeful that provision on doubtful debt would reverse by the end of the year. The total income of the company increased to Rs 101 crore out of that Rs 89 crore is operating revenue that consists of transaction charge Rs 31 crore, annual issuer charges Rs 22 crore, online data charges Rs 13 crore, IPO corporate action charges Rs 7.8 crore, e voting charges Rs 4.38 crore and cash statement charges Rs 1.85 crore. An increase in e voting charges to Rs 4.38 crore from Rs 2.48 crore is driven by covid-19 and people referring to use e-voting rather than physical voting.

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