News

Published: July 2, 2024
Updated: July 2, 2024

BONUS BUMP: CDSL Shares Dip Despite 1:1 Bonus Issue

Market Movement

Shares of Central Depository Services Limited (CDSL) slipped 2.8% to Rs 2,368 per share on the NSE in Tuesday's intraday trade, despite the company's announcement of a 1:1 bonus issue of equity shares.

Bonus Share Details

The bonus issue entails the issuance of 104.5 million equity shares with a face value of Rs 10 each, totaling Rs 104.5 crore. This will effectively double the number of shares outstanding, leading to a downward adjustment in the stock price.

Capital Expansion

Post the issuance of bonus shares, the company's equity share capital will increase to Rs 209 crore. The issuance is expected to be completed within two months from the board approval date, on or before September 1, 2024.

Financial Performance

CDSL reported a consolidated net profit of Rs 129.25 crore in Q4FY24, marking a significant increase compared to Rs 63.12 crore in Q4FY23. Revenue from operations also saw a substantial surge, rising by 93% to reach Rs 240.78 crore in the same quarter.

Market Cap and Valuation

The company has a total market cap of Rs 25,239 crore and is presently trading at a price to earnings multiple of 60.57 times.

Current Trading

At 02:35 PM, the stock was trading 0.93% lower at Rs 2,415.25 per share on the NSE, while the NSE Nifty50 was down marginally by 0.03% at 24,133.40 levels.

Accordingly, while the bonus issue may have initially led to a decline in CDSL's share price, the company's strong financial performance and increased capital base are likely to attract investors in the long run.