CDSL Overtakes NSDL – Becomes Preferred Depository Services Provider

CDSL & NSDL

The BSE-promoted Central Depository Services (CDSL) has displaced the National Securities Depository (NSDL) – the pioneer of the concept of dematerializing physical shares in the country – from the top slot in terms of Demat accounts where all securities held in the name of respective investors are credited.

As per the latest data until December 31, 2019 CDSL has 19,721,768 demat accounts while NSDL has 19,638,964 accounts.

This achievement fuels CDSL’s prospect to be a preferred depository services provider to investors while increasing its investment appeal.

CDSL is now the first depository to open a branch at International Financial Service Centre (IFSC) at GIFT City in Gujarat.

The branch at IFSC will help introduce products like depository receipts, masala bonds, and exchange-traded funds (ETFs), along with hybrid products and similar delivery-based trading.

The branch at IFSC will help introduce products like depository receipts, masala bonds, and exchange-traded funds (ETFs), along with hybrid products and similar delivery-based trading.

CDSL was listed in Jun 2017 at an 80% premium to its issue price of Rs 149. It returned strong gains since listing and is finding favor with investors due to its steady earnings performance and good dividend track record.

Last year, CDSL paid out 35% of its profit as dividends. This is a middling range that strikes a nice balance between paying dividends to shareholders and retaining enough earnings to invest in future growth. Besides, if reinvestment opportunities dry up, the company has room to increase the dividend.

Give the earnings growth trajectory, CDSL is on the cusp to be the best dividend stocks over the long term.

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