CDSL: MARCHING ON A FIRM GROWTH PATH
Dalal Street Investment Journal|Vol. 36. No. 22 • SEPT 27 - OCT 10, 2021
The company endeavours to cater to the needs of investors with a comprehensive range of services at competitive prices and to maintain optimal service standards. It is therefore all set to match the rapid pace of the Indian equity markets

CDSL is the first listed depository of India and the second listed depository in the world. It is a market infrastructure institution (MII) and a crucial part of the capital market structure, providing services to all market participants – exchanges, clearing corporations, depository participants, issuers and investors. A depository is a facilitator for holding of securities in the dematerialised form and an enabler for securities’ transactions. As of August 31, 2021, CDSL held 44,100,691 investor accounts excluding closed accounts, 586 depository participants, and 509,270 million securities in dematerialised custody which value up to ₹33,540,874 million.

The company is also the first listed depository in the Asia Pacific region. Also, CDSL is the first depository to launch operations in IFSC, GIFT City. The company is spread across 96 per cent pin codes and operates with four subsidiaries: CVL, CDSL Insurance Repository Limited (CIRL), CDSL Commodity Repository Limited (CCRL), CDSL IFSC Limited (CDSL IL). CVL conceptualised, designed and implemented the KRA system with the mutual fund industry in 2006. It is the first and the largest KYC registration agency (KRA) in the country with over 3.10 crore fully digitised KYC records as of June 30, 2021.

CIRL has received registration certificate from Insurance Regulatory and Development Authority of India (IRDAI) to act as an insurance repository. CCRL was set up in 2017 and it provides electronic repository services for commodity assets. At present, it exclusively serves three commodity exchanges, namely, MCX, BSE and ICEX for their trades in agriculture commodities. CDSL IL has received approval from International Financial Services Centres Authority (IFSCA) to act as a foreign depository to run the depository system and any other ancillary activities as approved by IFSCA.

Sector Overview

The depository is an institution registered with the Securities and Exchange Board of India (SEBI) for holding custody of securities in electronic form and facilitates transfer based on instructions from account holders. The growing Indian capital markets made it difficult to handle the growing volume of documentation in paper form. This caused problems like delay in transfers, long settlement period, high levels of failed trade and bad deliveries, high-risk exposure, etc. To remove these bottlenecks, the Depositories Act was legislated in August 1996. Looking at the cumulative market share of active dematerialisation accounts, CDSL has experienced a growth in market share from 40 per cent in FY 2013-14 to 61 per cent in FY 2020-21.

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