Depository services provider Central Depository Services (India) Limited (CDSL) which is promoted by Bombay Stock Exchange (BSE) has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on 28th December 2016 for its initial public offering (IPO).
According to the draft red herring prospectus (DRHP) the initial public offering (IPO) will purely be an offer for sell of up to 33.65 % of its Stake (i.e. 3.52 crore shares) by existing shareholders such as BSE, Bank of Baroda, Calcutta Stock Exchange and State Bank of India.
As on December the top 10 shareholders of CDSL were, Bombay Stock Exchange holding 50.05%, State Bank of India holding 9.57%, Standard chartered Bank holding 7.18%, HDFC Bank holding 7.18%, Canara Bank holding 6.45%, Bank of India holding 5.57%, Bank of Baroda holding 5.07%, LIC holding 4.15%, Union Bank holding 1.91% and Bank of Maharashtra holding 1.91%.
CDSL has appointed Edelweiss Financial Services, SBI Capital Markets, Axis Capital, Nomura Financial Advisory and Securities (India) Pvt. Ltd, Haitong Securities, IDBI Capital Markets, and YES Securities. To manage its shares sale.
Post IPO, the shareholding of BSE, SBI, and Bank of Baroda all together will come down to 32%, according to the DRHP. BSE will be divesting the largest portion of shares, of 24% as the exchange looking to sell 26% stake among its 50% of Stake of CDSL. Calcutta Stock Exchange's which holds 0.96% will cease to be a shareholder after the IPO.
Central Depository Services (India) Limited (CDSL) was founded with the intention of providing convenient, dependable and secure depository services at affordable cost to all market participants.
CDSL was set up in 1999 by BSE and is second Indian central securities depository based in Mumbai.
CDSL facilitates holding of securities in electronic form. CDSL and National Stock Exchange-promoted National Securities Depository Ltd are the only two depositories in the country.
BSE’s plan to divest its stake in CDSL comes at a time when the exchange is planning an IPO of its own to provide an exit route to its investors. On march 2016, Enrich Advisors reported that BSE had received a go ahead by Securities and Exchange Board of India (SEBI) for the IPO.
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The CDSL IPO will create liquidity for other shareholders, especially state-owned banks which have invested in the company. With rising bad assets and large sums of money required for recapitalization, these banks have been pushed by the finance ministry to look at divestment of non-core assets to raise funds.
Reference:SEBI Government portal