Shares of this securities depository company surged as IRDAI mandates KYC in insurance

As a result of IRDAI's mandate for KYC of insurance, CDSL's share price increased by 6 per cent.

Insurance Regulatory Development Authority of India (IRDAI) to make KYC mandatory for policyholders.  One of the four IRDAI-approved depositories and the first central securities depository in India, CDSL, would likely benefit from the move. CDSL will be used to carry out the whole KYC procedure.

The stock increased by 6 per cent on Tuesday, August 30, and is trading at Rs 1254. The share's 52-week high and low are Rs. 1734 and Rs. 1015, respectively. ROE and ROCE for the stock are respectively 31.6 per cent and 41.9 per cent.

Central Depository Services Limited offers services to all market players, including exchanges, clearing houses, depository participants (DPs), issuers, and investors. It is an enabler for securities transactions as well as a facilitator for holding securities in a dematerialized form.  CDSL is India's largest securities depository. It also has the highest percentage of incremental demat account growth and the most DPs registered in the depository business.

Depository Activity makes up 78 per cent of the company's revenue, followed by Data Entry and Storage 21 per cent, and Repository 1 per cent. The firm established itself as the first depository with more than three billion demat accounts in FY21. As more people participate in capital markets, the fundamentally strong stock price increases.

For three years, the top line has grown at a CAGR of 41 per cent. The revenue for FY22 was Rs. 551 crore. Tremendous operating and net profit margins of 66.3 per cent and 56 per cent are enjoyed by the company. Sales for the most recent quarter ending in June increased by 20 per cent QOQ to Rs 140 crore. For FY22, the firm had a strong free cash flow of Rs 257 crore.