Central Depository Services Limited or CDSL is one of the two national security depository institutions in India. As an infrastructure for markets, CDSL facilitates the holding as well as the settlement and transaction for securities that are in digital formats to increase effectiveness and ensure security. It is a clearinghouse for exchanges, corporations as well as investors, depository participants and issuers in India. Established in 1999, CDSL entered the capital market as a competitor to the first Indian depository, National Securities Depository Limited. CDSL is the current largest depository in India with a share in 73% demat accounts that are active in India. If you’re an investor or trader, and you’ve heard of CDSL Do you have any knowledge about the revenue streams of CDSL or its significance in the Indian market for capital? If not, then below information is for you.
What Are The Functions of CDSL?
CDSL offers a range of essential depository services. This includes the dematerialisation and rematerialisation process of securities, as well as the opening and maintaining of demat accounts that are provided to customers by the depository participants, and the holding the transfer, pledge and nomination of securities, such as equities bonds and mutual funds, Treasury bills, and many more.
CDSL handles all requirements for delivery as well as receipt of orders that are received by the terminal of a participant in depository. The transaction support includes settlement of trading order as well as settlement of accounts. making it easier to make market and off-market transfers.
CDSL offers a variety of digital tools to help with various services such as e-voting, electronic notices, e-locker, m-voting, Myeasi mobile app and electronic statements of account consolidated.
Other services of CDSL comprise electronic foreign investment monitoring, disclosures driven by systems virtual AGMs, and education initiatives for investors.
| Company | Central Depository Services Limited |
| Establishment Year | 1999 |
| Founder/Owner | BSE as well as other investors |
| Headquarters | Mumbai, Maharashtra, India |
| Industry | Depository Services |
| Net Worth | $4 billion |
| Revenue In 2024 | $130 million |
How Does CDSL Make Money?
1. Transaction Charges
CDSL earns income through charges for transactions that involve buying, selling, transfer and pledging units or shares. The transaction charges are fixed amounts that depository participants contribute to CDSL. These charges are typically paid by traders or investors, as well as the DPs simply take the money and deposit it to the depository.
Transaction fees account for about 40 percent of the total revenue for CDSL. In FY 24 the fee for transactions varied in the range of INR 11.50-13.50 for debit transactions.
2. Annual Issuer Charges
CDSL earns income from issuer fees. This is a regular fee to be paid by every listed company or mutual fund in line with SEBI guidelines. The issuer pays annual costs for managing their listed shares by electronically depositing them via the CDSL.
Annual Issuer Charges add approximately 22-25% of the total amount of revenue generated through CDSL. The exact amount charged by a business is contingent upon the amount of demat accounts that hold its shares.
3. IPO and Corporate Actions Charges
CDSL earns money from the fees that companies pay that decide to launch an IPO to market their shares to potential investors. In addition, the depository receives money from companies for corporate actions, such as bonuses rights, buybacks, rights OFS, splits and more.
IPO or corporate actions costs make up about 15% of revenues generated by CDSL. The charges range from INR between 20,000 and INR 1 lakh for each event.
4. Other Revenue Sources
The three revenue streams constitute the bulk of earnings for CDSL There are other segments that generate about 20% of revenue. These include settlement costs for daily settlement of trades and e-voting fees, storage of documents, KYC charges, ECAS charges and other charges for various services such as SMS alerts, APIs, and many more.
An Overview of CDSL’s Technology Infrastructure
CDSL utilizes a centralised system that allows for current data to be accessed by users in the fastest possible time. It is accessible via the internet or intranet following multi-factor authentication of users and login. High-tech software infrastructures are supported by the latest hardware technology, which includes servers, network infrastructure and flash storage for enterprise use. In addition to being durable and stable hardware tools are adaptable to meet the demands of a growing number of users.
CDSL is the recipient of certification under the ISO 22301 certification for its Business Continuity Management System or BCMS. It implements a variety of procedures to control the system and increase the efficiency in its BCMS. In addition, CDSL designs and implements best-in-class cybersecurity policies and procedures to secure confidential and sensitive information.
