Central Depository Services Limited, is the second Indian central securities depository based in Mumbai. CDSL facilitates holding and transacting securities in electronic form and facilitates the settlement of trades executed on stock exchanges. On 30 June 2017, CDSL was listed on the National Stock Exchange (NSE) through initial public offering (IPO) making it the first depository in Asia-Pacific region and only the second depository in the world to get listed.
The company operates as a digital vault for securities, providing dematerialization services that enable investors to hold shares, bonds, and other financial instruments in electronic format. CDSL was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to all market participants. In February 1999, CDSL received certificate of commencement of business from Securities and Exchange Board of India (SEBI).
CDSL operates through a comprehensive business model that generates revenue from multiple sources across the securities ecosystem. CDSL currently holds a 58% market share in terms of investor accounts, with 589 registered depository participants. The company's business model centers around providing essential infrastructure services to various market participants.
CDSL being a depository, it works like a bank where the securities are held in electronic format. They offer the Demat account to the investors/ traders, which hold the securities. The company generates revenue through transaction charges, annual maintenance fees, issuer charges, and various value-added services including e-voting, e-CAS, and data storage.
Issuer Companies: Numerous entities issue a wide range of securities in dematerialization form with CDSL. Through CDSL, these issuer companies are able to credit securities to a shareholder's or applicant's account. Annual fees from these issuer companies amount to significant revenues for CDSL.
Despite being a late entrant in the depository market, CDSL has outgrown its competitor NSDL with its unique business strategy. CDSL focuses on retail DPs, particularly discounted brokers, and with its relatively low fee structure and relaxed registration requirements, it has become India's largest Depository in terms of DP accounts.
CDSL enjoys a duopoly along with NSDL. Furthermore, CDSL's size gives it a competitive advantage and power over NSDL. 600+ Depository Participants (DPs)—This is a larger number than NSDL, making it more accessible to retail investors.
Annually, CDSL's consolidated net profit is at Rs 526 crore in FY25 compared with Rs 420 crore in FY24, registering an increase of 25% YoY. Total income grew by 32% YoY to Rs 1199 crore. However, On a consolidated basis, CDSL's net profit decreased by 22% year-on-year and 23% quarter-on-quarter to Rs 100 crore in Q4 March 2025.
- Market Capitalization: The market cap of Central Depository Services (India) Ltd (CDSL) is ₹36836.25 Cr as of 4th July 2025.
- Revenue Growth: Taking a five-year time horizon, the revenues and net profit of CDSL have grown at a CAGR of 24% and 25% respectively.
- Profitability: Net profit for the year grew by 52.0% YoY. Net profit margins during the year grew from 49.7% in FY23 to 51.7% in FY24.
CDSL became the first depository to register 15.29+ crore demat accounts as on 31 March 2025. During the FY 2024-25, approximately 3.73 crore new demat accounts were opened. This growth reflects the increasing digitalization of Indian financial markets and growing retail participation.
The company's total active BO (Beneficial Owner) accounts have grown at a CAGR of 19% from 1.08 crore in FY 2015-16 to 2.12 crore in FY 2019-20. Though the industry has grown tremendously in the last few years, the Indian capital market is still highly underpenetrated in terms of equity participation, and there is significant room for growth.
CDSL has deployed state-of-the-art server hardware, enterprise flash storages and highly resilient network infrastructure. These systems are highly scalable, reliable and robust. CDSL has gone in for a centralised database system. This architecture provides distinct advantages to the users wherein the initial set-up cost for Issuer Companies, their RTAs and Depository Participants is low compared to the decentralized set up in which local infrastructure, database licenses and trained systems manpower are required at the financial intermediary end.
CDSL has set up a new company, India International Bullion Holding IFSC Ltd to handle the bullion business in Gift City, Gujarat. Later it plans to expand into silver and other precious metals, commodities, etc. 25 June 2025 - CDSL and IIM Mumbai sign MoU to collaborate on financial data analytics and skill development.
Transactional charges and IPO charges which together contribute 29% to the revenue, are market-linked in nature. These income are dependent on stock market performance, and the downfall in market level may bring volatility to the company's earnings.
However, last year in June SEBI came up with a discussion paper on 'Review of Ownership and Governance norms for facilitating new entrants to set up Stock Exchange / Depository'. The purpose was to contemplate the formation of more depositories. It is yet unclear when the regulators will allow the setting up of more such entities. But it does point to the fact that sooner or later CDSL's authority as the leading depository institution may be challenged.
CDSL represents a compelling investment opportunity in India's growing capital markets infrastructure, benefiting from the country's digital transformation and increasing retail participation in financial markets. The company's strong market position, robust financial performance, and strategic initiatives position it well for continued growth, though investors should remain mindful of regulatory changes and market cyclicality.
