Analyst Meet / AGM     21-May-20
Conference Call
Central Depository Services
Strong distribution reach of 599 depository participants from over 20000 locations covering 94% of pin codes
Central Depository Services conducted a conference call on 20 May 2020 to discuss its financial results for the quarter and year ended March 2020. Nehal Vora, MD&CEO of the company addressed the call: Highlights:

The company has added 14.96 Beneficial Owner (BO) accounts in Q4FY2020 compared with 9.2 lakh in the previous quarter and 6.61 lakh in the corresponding quarter of the last year. The company has added 48.32 lakh BO accounts in FY2020 taking the total number of such accounts to 271.67 Lakhs with the net BO accounts at 211.81 Lakhs end March 2020

The company has become the first depository to cross the 200 lakhs milestone.

As on 31 March 2020 CDSL has 599 depository participants offering services from over 20,000 locations covering 94% of the pin codes across the country. These depository participants comprise our clearing members, banks, custodians and non-banking finance companies. The only competitor of the company NSDL has only 280 depository participants.

As per the company, almost all listed companies are admitted with them for demat, while large number of unlisted private limited companies are also admitted with them for demat. As on 31 March 2020, the securities of 14762 companies have been admitted with the CDSL for demat.

During the last 12 months, the volume of securities under custody has increased by 26%.

The revenues of the company increased by 16% to Rs 284 on consolidated basis, while moved up 12% to Rs 211 crore on standalone basis in FY2020.

The profits of the company have decreased mainly on account of a provision of a nonrecurring previous year's anticipated statutory liability of Rs 10.56 crore, CSR of Rs 6.81 crore and legal provisions of Rs 1.79 crore

The company through its subsidiary CVL held 2.16 crore capital market investor records under CVL up 15% from 1.88 crore last year. The company is the first and largest KYC Registration Agency (KRA) in the country. KYC processing has jumped to 3.2 lakh in FY20 from 2.29 lakh in FY2019.

The number of registrar and transfer agents (RTA) has increased 402 from 121 last year.

The company has processed 277 lakh transactions in FY20 under GST suvidha compared with 259 lakh last year.

Under the National Academic Depository, the number of academic Institutions associated with the company has increased to 619 from 527 last year. The company has updated 2.83 crore records compared with 1.04 crore last year. The number of students registered also increased to 13.27 lakh from 2.7 lakh class last year. However, National academic depository has been transferred to dig locker.

CDSL, CVL and other entities are allowed to undertake e-KYC Aadhaar Authentication service of UIDAI (Unique Identification Authority of India) in securities Market. This initiative will help to achieve the objective of keeping a check on Money laundering, while also prove to be a new income opportunity for all permitted entities.

CDSL became the first and only depository to have received the approval from SEBI to commence operations at GIFT City. CDSL inaugurated its IFSC Branch at the GIFT City, Gandhinagar in Gujarat in January 2020.

Segment wise annual charges contributed 33% of revenues in Q4FY2020, transaction charges 21%, IPO corporate action charges 12%, KYC online data charges 19%, account statements 2%, document storage charges 2% etc.

During FY2020, the segment wise annual issuer charges contributed revenues of Rs 77.5 crore, transaction charges Rs 43 crore, IPO corporate action charges Rs 23 crore, KYC online data charges, Rs 37 crore, account statements Rs 9 crore, e KYC Rs 4 crore, document storage charges Rs 5 crore, e voting Rs 3.5 crore etc.

Annual fees charges are finalized by SEBI every five year with revision scheduled for 2020, while the company is cautious about any changes in the charges due to current pandemic situation.

As per the company, there are 80000 unlisted companies, while only 11000 companies have been admitted for demat. As per the regulation, dematerialization of securities is compulsory for any corporate action and transfer of shares.

Technology and digitalization remains the key focus area of the company, while it will continue to invest in technology going forward.

The employee cost was up in FY2020 due to salary hike, while the top management change is likely to help in keeping employee cost under control ahead.

As per the company, the bad debt provisions stood at Rs 7.5 crore for FY20 compared with Rs 3 crore in FY19. The bad debt provisions are created due to delaying payments from DPs.

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