Central Depository Services Limited was founded and established in 1999 with an objective to provide convenient, dependable and secured depository services. The company is a Market Infrastructure Institution (or MII) and an important part of the capital market structure. It provides services to market participants such as exchanges, clearing corporations, depository participants (DPs), issuers and investors. In 2002, the company started online inter-depository transfer. This allowed the online securities transfer between depositories (CDSL and NSDL). In 2005, the number of active demat accounts crossed the toll of 1 million. The company signed MOU with Korea Depository Services to develop the financial services industry in India and Korea in 2007. In 2010, CDSL signed an agreement with the Nepal Stock Exchange to set up a Depository and Clearing & Settlement system in Nepal. It was listed on NSE in 2017 after a successful IPO. CDSL won IDC Insight Excellence in Operation Award in the year 2019 and also won BIG 40 Awards – World AI Show BFSI & NBFC in the same year.

Business Segments

The company carries out its business by providing service to Beneficiary Owners or Investors (BOs), Issuers/Corporations, Depository Participants (DPs) and other services:

• Beneficiary Owners or Investors: The company provides services such as Electronic Access to Securities Information (easi), easi and Execution of Secured Transactions (easiest) and Myeasi Mobile App (Myeasi), SMS Alerts Related to Transactions (SMART), Electronic Consolidated Account Statement (ecas), Electronic Voting (evoting), and Virtual Annual General Meeting.
• Services Supporting Depository Participants: The segment deals with services like Application Programming Interfaces (or APIs) for DPs, Electronic Delivery Instruction Slip, and Electronic Margin Pledge.
• Services Offered to Issuers: CDSL provides services to issuers such as Electronic Foreign Investment Monitoring, Electronic System Driven Disclosures, Electronic Voting, Virtual Annual General Meeting, and Electronic Notices.
• Other Services: In addition to the above, it provides various other services such as KYC Registration Agency, Know Your Customer, Electronic Signature Service, Tax Filing Solution, Online Account Opening and Electronic Negotiable Warehouse Receipts and Electronic Non-negotiable Warehouse Receipts and Electronic Insurance Account.

The company has several subsidiaries like:

• CDSL Ventures Limited (CVL): It is a wholly-owned subsidiary of CDSL. It commenced its operations in 2008 by handling customer profiling and record keeping of mutual fund investors.
• CDSL Insurance Repository Limited (CIRL): It is a subsidiary company regulated by the Insurance Regulatory and Development Authority of India (IRDAI). It is engaged in the business of enabling policyholders to hold life policies, motor policies, etc.
• CDSL Commodity Repository Limited (CCRL): CDSL incorporated CCRL as a subsidiary to establish and run a commodity repository on the lines of a securities depository.

Key Personnel

Shri Nehal Vora, MD &CEO Shri Nehal Vora is the Managing Director and Chief Executive Officer of CDSL. He has been in this position since September 24, 2019. Under his leadership, CDSL has become the leading depository of India with over 2 crore beneficiary accounts and is the first and the only depository to launch its branch at the International Financial Services Centre (IFSC) at Gandhinagar.

Management Outlook

• The company believes technology is a key driver and differentiator in its market infrastructure ecosystem. With the help of investments in cutting-edge systems and tools, it expects to maintain efficient operations in the future.
• Looking forward, the company is mainly focused on expanding its market presence and increasing annuity income. It is planning to tap into emerging investor segments through targeted marketing campaigns and strategic partnerships.

SWOT Analysis

Strengths

• Strong distribution network.
• Solid Market Share.

Weaknesses

• Rising costs.

Opportunities

• Digital acceleration during challenging times.
• Enablement of e-KYC for capital market intermediaries.

Threats

• Tariff constraints by SEBI.
• Change in technology.