central depository services (india)...

Central Depository Services (India) Ltd.

IPO NOTE 14th June, 2017

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91-22-6696 5555 / 91-22-6691 9569 www.krchoksey.com

KRChoksey Research is also available on Bloomberg KRCS<GO>

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Central Depository Services (India) Ltd Issue Opens On

Monday, June 19, 2017 Price Band (INR)

145 – 149 Rating

SUBSCRIBE

Issue Closes On

Wednesday, June 21, 2017 Issue Size (INR)

524 crores

OFFER STRUCTURE

Issue break-up No. of shares

(#)

QIB~ 17,233,604

Non Institutional 5,170,081

Retail 12,063,523

Employee Reservation 700,000

Total 35,167,208

Indicative Timetable

Offer Closing Date June 21, 2017

Finalization of Basis of Allotment with NSE On or about June 29, 2017

Initiation of Refunds On or about June 29, 2017

Credit of Equity Shares to Demat accounts On or about June 29, 2017

Commencement of Trading of Eq.shares on NSE On or about June 30, 2017

Particulars (INR Millions) FY13 FY14 FY15 FY16 FY17

Revenue from operations 907.5 889.3 1,052.8 1,228.5 1,460.0

EBITDA 357.3 327.2 463.1 650.3 796.2

OPM% 39.4% 36.8% 44.0% 52.9% 54.5%

PAT 510.1 489.9 574.9 911.3 865.9

NPM% 56% 55% 55% 74% 59%

EPS before extraordinary items 4.78 4.72 5.36 5.54 8.21

P/E (x) 31.2 31.6 27.8 26.9 18.2

On a Longer Horizon Central Depository Services Limited (CDSL) was formed in 1999 and is the second Indian central securities depository based in Mumbai. CDSL was initially promoted by BSE Ltd which has thereafter divested its stake to leading banks as "Sponsors" of CDSL. CDSL has two subsidiaries “CDSL Ventures Ltd” and “CDSL Insurance Repository Ltd” providing services to Capital market Intermediaries and Insurance Companies respectively. Furthermore third subsidiary, CDSL Commodity repository Ltd has been recently commenced in 2017 to provide services in terms of commodity warehouses and holding of commodities in electronic form. CDSL offers an efficient and instantaneous transfer of securities with the objective of providing convenient, dependable and secure depository services to all market participants at affordable cost. Presently, CDSL’s services are delivered by 589 Depository Participants to over 1.26 crore Investor accounts from over 17000 service centres across the country and commanding ~60% market share vis-a-vis NSDL’s market share of ~40% with respect to incremental demat accounts.

Selling Shareholders

Name of the Company Prior Holding (%) Post Holding (%)

BSE Limited 50.05% 24.00%

State Bank of India 9.57% 5.00%

Bank of Baroda 5.07% 2.99%

The Calcutta Stock Exchange 0.96% Nil

Source: RHP, KRChoksey Research

India Equity Institutional Research II IPO Note II 14th June, 2017

Particulars OFS Details

No. of shares under OFS(#) 35167208

Price band 145 – 149

Post issue MCAP (INR mn) 15571


ANALYST Dhavan Shah, [email protected], 91-22-6696 5574 Bhavik Shah, [email protected], 91-22-6696-5568

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Central Depository Services (India) Ltd

Company background and Business overview Central Depository Services Limited (CDSL) commenced its business in 1999 which was initially promoted by BSE Ltd and later divested its stake to leading banks as "Sponsors" of CDSL. CDSL facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry. The Depository Participant (DP), who act as an agent of the depository, offers depository services to investors. According to SEBI guidelines, financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to open a demat account through any DP for dematerialisation of his holdings and transferring securities. The balances in the investors account recorded and maintained with CDSL can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account which gives the details of the securities holdings and transactions. The depository system has effectively eliminated paper-based certificates which were prone to be fake, forged, counterfeit resulting in bad deliveries. CDSL offers an efficient and instantaneous transfer of securities with the objective of providing convenient, dependable and secure depository services to all market participants at affordable cost. Presently, CDSL’s services are delivered by 589 Depository Participants to over 12.3 Mn demat accounts from over 17000 service centres across the country and commanding ~60% market share vis-a-vis NSDL’s market share of ~40% with respect to incremental demat accounts. Presently, CDSL provide services to the following clients namely:

1. Depository Participants (DPs) and other capital market intermediaries: CDSL has effectively eliminated paper-based certificates and offers dematerialization of equity shares, preference shares, government securities, mutual fund units, debt instruments allowing securities transactions to be processed by book entry. The DPs act as agents of CDSL and offer depository services to the Beneficial Owner of the securities. Other capital market intermediaries include The Registrar and Transfer Agents (RTAs) and Clearing Members (CMs) which are involved in the process of issuing and transferring of securities on electronic platform.

2. Corporates: CDSL further extends its facilities to issuers in a range of non-cash corporate actions such as bonus issue, subdivision of holdings and conversion of securities in a merger, amalgamation or in an IPO to credit securities to a shareholder's or applicant's demat accounts.

Moreover, CDSL provides other online services such as e-voting, e-Locker, National Academy Depository, easi (Electronic Access to Security Information), easiest (Electronic Access to Security Information and Execution of Secured Transaction) drafting and preparation of wills for succession (myeasiwill), mobile application (myeasi, m-voting) and Transactions using Secured Texting (TRUST). CDSL also conducts meetings and other awareness programs to educate investors concerning Capital Markets.

CDSL has three subsidiaries which includes: i. CDSL Ventures Limited: It is a wholly owned subsidiary of CDSL and was formed in 2006 with the intent of offering KYC

services in respect of investors in the capital markets including mutual fund industry. As of April 30, 2017, it is the 1st and largest KYC Registration Agency with over 1.5 crores KYC records representing ~67% market share.

ii. CDSL Insurance Repository Limited: It is an insurance repository formed in 2011 and is being promoted by CDSL. It is one of the leading repositories at this phase providing facilities to allow holding of insurance policies in electronic form to the holders of these policies of several insurance companies. It also has arrangements with several life insurance companies and three general insurance companies for holding policies in electronic form. As of April 30, 2017, CDSL Insurance had opened approximately 3,25,000 e-Insurance accounts, holding more than 66,000 insurance policies in electronic form.

iii. CDSL Commodity Repository Limited: It is a wholly owned subsidiary of CDSL and commenced recently in 2017 to provide services in terms of commodity warehouses and holding of commodities in electronic form.

As of March 31, 2016, CDSL held ~43% market share (NSDL holding ~57% market share) with respect to revenues which has grown at a CAGR of 11% (NSDL CAGR stood at 12%) from FY13 to FY16. CDSL revenue from operations includes transaction charges, account maintenance charges and settlement charges paid by DPs and annual fees, corporate action charges and e-voting charges paid by companies.

Revenue CAGR between FY 14 and FY 17

18%

PAT CAGR between FY 14 and FY 17

21%



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736 856

849

1014 980 1046

1236 1375

0

200

400

600

800

1000

1200

1400

1600

2012-13 2013-14 2014-15 2015-16

CDSL NSDL

39%

38%

21%

2%

Annual Fees Other Charges

Transaction Fees Annual Maintenance Charges

51%

37%

7% 5%

Transaction Fees Custody Fees

Annual Fees Other Charges

Exhibit 1: Revenues of CDSL and NSDL (in INR millions)

Exhibit 2: CDSL Revenue from operations break-up for FY16 Exhibit 3: NDSL Revenue from operations break-up for FY16





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39% 40% 40% 40% 41% 43% 44%

61% 60% 60% 60% 59% 57% 56%

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

NSDL

CDSL





Investment rationale:

Stable revenue base due to repeat business in multiple offerings in the Indian securities and financial services Market:

CDSL along with its subsidiaries have been serving to several sub-sectors and financial services market including capital markets, mutual funds and insurance companies. Its diversified offerings to several client bases (DPs, corporates, stock exchanges, clearing corporations, registrars and the investors) has provided with multiple streams of stable, recurring operating revenue. CDSL collects fixed annual charges from registered companies and transaction-based fees from DPs which has led to stable operating income. Dematerialisation has led number of companies available in demat to grow at a CAGR of ~4% for CDSL from FY11 to FY17 joining 10,200 companies till FY17 contributing fixed annual fees. Moreover, other consistent revenue-generating services includes e-notices and e-voting services to companies; allowing shareholders to receive notices in electronic form and also to allow shareholders to cast their votes either electronically, remotely or at the meeting venue. High economies of scale leading to steady growth in profitability:

CDSL enjoys high economies of scale resulting from fixed operating costs (employee wages, post employee benefits, software development and maintenance costs) which has led consolidated total expenditure to remain largely consistent at INR 663.54 million / 631.28 million and 702.88 million in FY 2015 / 2016 and 2017 respectively. As a result, PAT has grown at a CAGR of 14.48% from INR 499.4 million to 857.8 million from FY13 to FY 17. Stable business and steady revenue growth has allowed CDSL to pay consistent dividends with a DPR to stay more than 30%. The high economies of scale have been further enhanced by a growth of BO accounts at a CAGR of 12.98% from ~9.6 Mn over the last three fiscals.

8030 9928

8062 8634 9399 10021 10200 8842 9741 10844

12211 13992

15638

17719

0

5000

10000

15000

20000

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

CDSL NSDL

Exhibit 4: Number of companies available in demat form grew at a CAGR of ~12% for NSDL and ~4% for CDSL

7.48 7.92 8.33 8.78 9.61 10.79

12.3 11.54

12.04 12.68 13.05 13.71

14.57 15.58

0

6

12

18

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

CDSL

NSDL

Exhibit 6: Steadily market share has been increasing for CDSL in terms of BO accounts…..

Exhibit 5: Total no. of BO accounts in India (Mn)





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11877

16764 17489

15960

26765 27389

0

6000

12000

18000

24000

30000

2014-15 2015-16 2016-17

CDSL NSDL

Exhibit 10: DP service centres

Parameter FY15 FY16 FY17 April 30,

2017

Live Companies 9399 10021 9887 9934

Depository Participants 574 583 588 589

Service centres 11877 16764 17489 17481

BO Accounts (Excl. Closed Accounts) (in Millions)

9.61 10.79 12.26 12.42

1568

4628

1549 1942

0

1000

2000

3000

4000

5000

2014-15 2015-16

CDSL NSDL

Exhibit 8: DP Locations Exhibit 9: CDSL Business Snapshot

0.44 0.41 0.45

0.83

1.18

1.51

0.51 0.64

0.37

0.65

0.86

1.01

0

0.4

0.8

1.2

1.6

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

CDSL NSDL

India’s leading securities depository with the highest share of incremental growth of BO accounts CDSL is the leading securities depository in India by incremental growth of Beneficial Owner (BO) accounts (market share with respect to incremental demat account increased from 46% in FY12 to 60% in FY17) and by the total number of DP locations (grown at 195% for FY15-16). It has a wide network of DPs, who act as points of service for its investors, operating from over 17,000 sites across the country, offering convenience for an investor to select a DP based on its cost structure and locational convenience to engage in services. As of April 30, 2017, CDSL had 589 DPs servicing across 29 states and 7 union territories including two overseas centres. The number of service centres grew at 21.35% from 11877 in FY15 to 17489 in FY17.

Exhibit 7: No. of incremental demat accounts (in Mn)





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Convenient and dependable depository services at competitive prices for a wide range of securities: CDSL provides affordable depository services to investors through competitive tariff structures. It has a wide network of DPs, regularly audited, operating from over 17,000 centres, across India, offering investors convenience of selecting a DP close to them. All the DPs are directly connected to CDSL through centralised database systems which ensures relatively low initial set up costs and minimal incremental costs. This allows DPs to offer depository services on a real-time basis to investors at competitive prices. CDSL updates the procedures and processes constantly to be in line with the evolving market practices. Further CDSL also regularly monitor dormant accounts and run a helpline to address clarifications and concerns of DPs and investors for which a dedicated investor grievance cell headed by a senior vice president has been set up. It has contingency terminals to ensure DPs access to information remains unaffected in case of technical disruptions at a particular DP location. CDSL also offers internet access to DPs as a contingency measure. Moreover, it also provide BOs access to their respective accounts on the internet. It has developed expertise in handling 121 large data volumes due to several years of experience of working with a large network of DPs across the country. State-of-the-art technology and robust infrastructure and IT systems: CDSL has deployed core depository system based on a centralised architecture providing real-time updated information to users which can be accessed over the internet as well as the intranet using multi-factor user authentication. It has also deployed state-of-the-art server hardware, enterprise flash storages and highly resilient network infrastructure. CDSL’s Information Security Management System (ISMS) complies with ISO 27001 standard and protects information throughout the life span (from initial creation to final disposal). CDSL’s system also has multiple back-up levels including a redundant fail-over cluster and a seamless switchover to the Disaster Recovery System (DRS), located at a different seismic zone to ensure business continuity. CDSL’s domain strength and modern IT capabilities have enabled implement several online applications to enhance the investor experience including:

i. online statement generation, allowing users to generate transaction-cum-holding statements for a financial year. ii. web-based Centralised Depository Accounting System (CDAS) allows users greater flexibility and

ease of use in conjunction with CDSL’s registration based account management tools. iii. easi and easiest allowing users to view executed transactions on a real-time basis. iv. e-Locker, a facility allowing users to store different documents, which can be viewed, downloaded or shared from any

location subsequently. v. mobile app (myeasi and m-Voting).



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Industry overview:

Domestically, there are only two depositories, NSDL (Established in 1996) and CDSL. The depository system in India is a INR 2400 Mn industry, as of FY16, with a CAGR of 12% from FY14 to FY16. The option (either CDSL or NSDL) has not only resulted in a competitive scenario (reducing transaction charges for investors) but also led to growth in number of DPs across India providing locational convenience to investors . This industry faces strong entry barriers being promoted by stock exchanges i.e. NSDL by NSE and CDSL by BSE. With strong parental lineage, new entrant will be at disadvantageous position in gaining market share due to intense competition. Growth in capital market transactions is a key driver for depositories growth.

Equity Markets

As the trading became compulsory in demat form for all investors in Year 1999, it resulted in uptick in the number of shares traded on BSE from ~18 Bn in FY02 to ~69 Bn in FY17 possessing ~21% share (Compared to ~79% for NSE) of total shares traded on both exchanges. Further as on March 31, 2017, the number of demat accounts with NSDL and CDSL amounted to 15.58 Mn and 12.3 Mn which grew at a CAGR of ~5% and ~9% respectively from past six fiscals.

Exhibit 11: Trading statistics of stock exchanges

18 22 39

48 66 56

99 74

114 99

65 57 48

86 76 69

28 36

71 79 82 85

148 142

221

182 162 166

153

236 220

258

0

50

100

150

200

250

300

Qu

anti

ty o

f sh

are

s tr

ade

d in

Bn

BSE NSE

7.48 7.92 8.33 8.78 9.61

10.79

12.3 11.54 12.04 12.68 13.05

13.71 14.57

15.58

0

4

8

12

16

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

CDSL NSDL

Exhibit 12: Number of demat accounts (in Mn)




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Debentures and Bonds Aside from equity shares, the dematerialisation facility was also extended to instruments such as commercial papers and bonds. The number of active instruments increased to 13140 and 9777 for NSDL and CDSL with a CAGR of ~14% and ~15% respectively from FY12 to FY16.

Exhibit 13: No. of active instruments in terms of debentures / bonds

5687 6911 6807

8481

9777

7746 8993 9503

11353

13140

0

3500

7000

10500

14000

2011-12 2012-13 2013-14 2014-15 2015-16

CDSL NSDL

410 477 519

593 678

606

742 878

1123

1356

0

400

800

1200

1600

2011-12 2012-13 2013-14 2014-15 2015-16

CDSL NSDL

Exhibit 14: No. of issuers in terms of debentures / bonds

Mutual funds Despite the eligibility of mutual funds units to be held in dematerialised form, some remain held in book entry form. Nevertheless the AUMs of the mutual funds industry grew by approximately INR 11,647 Bn during the last five years. Also, the cumulative net assets of all mutual funds, as of March 31, 2017, was INR 17,546 Bn as compared to INR 12,328 Bn on March 31, 2016, representing an increase of 42%. The number of mutual funds held in dematerialised form is expected to increase over time resulting in further higher revenues for depository companies.

Exhibit 15: Trends in resource mobilisation by MFs

5872 7014 8252

10828 12328

17546

-220 765 538 1033

1342

3430

-400

600

1600

2600

3600

0

5000

10000

15000

20000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Assets at the end of period (INR Bn) Net Inflow (INR Bn)





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Market Opportunities: 1. Rising capital market participation

India's demographic dividend, growth in per capita income and savings, along with government initiatives will boost participation in the capital markets augmenting well demand for depositories.

i. Demographic dividend

India is at the peak of a demographic dividend, with a large working age population (15-64 years) and a low dependency ratio . According to the 2011 Census, 62.5% of India's population falls within the working-age group of 15 to 59 years old. This larger working class is expected to increase the amount of investments, which may result in growth for depositaries.

ii. Growth in per capita income

India’s per capita income rose to INR 93,653 in FY17. In real terms, per capita income is estimated to have grown by 5.9% in FY17, compared to 6.6% in FY16. This buoyant trend will uptick investment in capital market from savings which in turn will magnify depositories growth.

iii. Improving literacy

Literacy in India, was 74.07% in the 2011 Census, which represented an increase of 14% since 2001. The literacy rate in India has been steadily rising over the last three decades due to various initiatives such as Sarva Siksha Abhiyan, Mid-Day Meal Scheme and the Right to Education Act 2009, as well as increased spending on education by the central and state governments. Going forward, literacy rates are expected to improve further that will help to boost the growth of economy.

2. New value-added service offerings

Indian depositories are expected to evolve and add newer services, such as record keeping, single demat account for all financial assets (Announced in Budget FY15) and KYC processes which are expected to contribute to future growth.

3. SEBI Investor Education and Financial Literary Initiatives

The SEBI intends to boost participation in the Indian capital markets by combining regulatory measures with both investor education and the promotion of financial literacy thorough various awareness initiatives.

i. Investor awareness programmes and regional seminars

The SEBI has organised over 1,350 investor education programmes, in collaboration with exchanges, depositories and various trade bodies such as investors associations. The SEBI also seeks to create awareness through regional investor education seminars across the country, focussing on tier-2 and tier-3 cities.

ii. Mass media campaign

The SEBI broadcasts important messages to investors through television, radio, print media and bulk SMS to educate people about the SEBI’s grievance redress mechanism, the SEBI complaints redress system (SCORES) and toll-free helpline aiming to caution investors about schemes seeking to mobilise capital for speculative purposes by offering unrealistic returns. It also urges investors to avoid relying on hearsay when investing and instead carry out proper due diligence.

iii. Dedicated investor website

The website provides relevant education and schedule of various investor education programmes to update investors about the forthcoming activities and seminars held by the SEBI.

iv. Investor assistance

The SEBI has also adopted measures to expedite the process for redressal of investor grievances, by way of a new web based centralised grievance redress system called SCORES. Moreover, SEBI also provides assistance to investors through email, telephone, letter and face-to-face consultation. Approximately 3,282 replies were sent providing guidance to investors in FY16.

v. Other initiatives

The SEBI also undertakes other initiatives in relation to investor guidance, such as (i) operating stalls at various fairs and exhibitions; (ii) programmes for differently-abled people; (iii) providing education and training to various government departments; (iv) participating in various investor awareness programmes undertaken by state level coordination committees; (v) managing a campaign for Application Supported by Blocked Amount (ASBA); and (vi) collaborating with the OECD to host an Asian seminar on the emerging trends in financial consumer protection across Asia.



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Valuation and Outlook: The depository participant’s revenue is largely influenced with a change in the economic environment. With new govt coming into radar since FY14, Indian economy has been witnessing a change in the growth outlook owing to robust govt initiatives. This has been reflected into securities market and thereby the performance of depository participants in last few years. The revenue of CDSL grew at a CAGR of ~18% over FY14-17, while EBITDA & PAT increased by ~35% & ~21% CAGR respectively. We believe the growth was largely supported by increase in the per capita income and thereby savings, which shifted to securities market by way of Equity, Debt, Mutual funds etc. This can also be evident from the fact that BO accounts in India was up by 8.5% CAGR over FY14-17 as against 4.6% CAGR over FY12-14. Further, CDSL being cost effective as compared to NSDL has resulted company to outpace overall industry growth. The BO accounts for CDSL increased at a CAGR of 11.9% over FY14-17 as against 5.3% CAGR over FY12-14. This in turn improved its market share from 40% in FY14 to 44% in FY17. Going ahead, we expect that financial savings growth could be supported from ‘Rural India’ given the constant support by central govt to increase their disposable income through different initiatives. This flow could come into financial market in any form such as Equity, Debt, Mutual funds resulting into better growth opportunities for the depository participants such as CDSL. Apart from this, the company has been providing different services such as KYC related solutions, Insurance dematerialization and Commodity repository solutions, which we expect to fuel further growth in the financial performance from medium to long term perspective. The company has been generating revenues of around 39% from annual fees as against 7% for NSDL. We believe this provides strong revenue visibility in terms of recurring revenue for CDSL and hence any further uptick in IPO coupled with increase in the issuer base could improve revenue outlook from medium to long term perspective. Apart from this, the company has only two major operational costs i.e. employee and other exp, which are largely fixed in nature. Thus, increase in the economies of scale would absorb fixed overheads resulting into expansion in operational performance and thereby return ratios & free cash flows. In terms of valuation, on the upper price band of INR 149, it has been valued at 18.2x on FY17 earnings. We believe, valuations are reasonable given the robust business outlook along with decent financial performance over FY12-17 i.e. Avg OPM: ~48%, Avg NPM: ~60%, Avg ROE: ~16% and Avg FCF/Revenue: ~23%. Hence, we recommend ‘SUBSCRIBE’ rating on the issue.



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Financials: Exhibit 16: Income Statement

Particulars (in Rs. Millions) FY13 FY14 FY15 FY16 FY17

Total Revenues 907.5 889.3 1052.8 1228.5 1460.0

Employee Cost 171.5 174.5 192.1 214.9 248.7

Other Operating Expenses 378.6 387.7 397.7 363.3 415.2

EBITDA 357.3 327.2 463.1 650.3 796.2

Other Income 333.0 338.9 401.9 384.8 408.5

EBITDA, including OI 690.4 666.1 865.0 1035.1 1204.7

Depreciation 26.1 49.7 73.8 53.1 39.0

Other exceptional items 0.0 0.0 16.9 331.0 0.0

EBT 664.3 616.4 808.0 1313.1 1165.6

Taxes 154.2 126.5 233.1 401.9 299.8

Tax Rate 23.21% 20.53% 28.85% 30.60% 25.72%

Net Income 510.1 489.9 574.9 911.3 865.9

NI Excl Extra Items 510.1 489.9 558.0 580.2 865.9

NI Incl Extra Items 510.1 489.9 574.9 911.3 865.9

Basic EPS excl. Extra items (INR) 4.78 4.72 5.36 5.54 8.21

Shares Outstanding 104.5 104.5 104.5 104.5 104.5




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Financials Exhibit 17: Balance Sheet

Particulars (in Rs. Millions) FY13 FY14 FY15 FY16 FY17

SOURCES OF FUNDS

Share Capital 1,045.0 1,045.0 1,045.0 1,045.0 1,045.0

Reserves 2,240.1 2,489.1 3,115.4 3,748.2 4,288.2

Minority Interest 123.7 135.7 145.6 146.8 154.9

Total Shareholders Funds 3408.8 3669.8 4305.9 4940.0 5488.1

Net Deferred Tax liability 10.4 29.1 7.4

Other long term liabilities 215.6 217.6 3.2 5.2 6.1

Current Liabilities and Provisions

Trade Payables 51.5 55.0 71.0 73.2 89.8

Other Current Liabilities 214.7 339.0 705.7 432.3 405.3

Short Term Provisions 275.4 276.1 18.4 50.2 75.8

Total Current Liabilities 541.6 670.1 795.1 555.6 570.9

Total Liabilities 4166.0 4557.5 5114.5 5529.9 6072.4

APPLICATION OF FUNDS :

Net Block 84.7 96.1 66.9 36.7 52.2

Capital Work in Progress 8.7 1.8 0.0 0.0 0.0

Intangible asset under development 4.4 0.0 0.0 0.0 2.6

Non-current investments 257.6 446.9 2232.1 2104.7 2729.0

Deferred tax assets 46.2 39.2 8.4 0.0 22.9

Long term loans and advances 115.2 137.2 0.9 0.4 0.8

Other Non Current Assets 0.0 0.0 344.7 296.8 227.2

Current Assets, Loans & Advances

Current Investments 3162.4 3307.0 1909.0 2470.0 2300.0

Sundry Debtors 84.6 61.9 69.1 130.1 132.7

Cash and Bank 353.3 409.8 431.0 403.7 483.2

Loans and Advances 24.0 22.4 1.2 0.8 1.1

Other Current assets 25.0 35.2 51.2 86.8 120.8

Total Current Assets 3649.2 3836.3 2461.5 3091.3 3037.8

Total Assets 4166.0 4557.5 5114.5 5529.9 6072.4




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Kisan Ratilal Choksey Shares and Securities Pvt. Ltd Registered Office:

1102, Stock Exchange Tower, Dalal Street, Fort, Mumbai – 400 001. Phone: 91-22-6633 5000; Fax: 91-22-6633 8060.

Corporate Office: ABHISHEK, 5th Floor, Link Road, Andheri (W), Mumbai – 400 053.

Phone: 91-22-6696 5555; Fax: 91-22-6691 9576.


ANALYST CERTIFICATION:

We, Dhavan Shah [B.Com, MS(Finance)], research analyst, & Bhavik Shah [MMS(Finance)], research associate, author and the name subscribed to this report, hereby certiCY that all of the views expressed in this research report accurately reflect my views about the subject issuer(s) or securities. I also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.

Terms & Conditions and other disclosures:

KRChoksey Shares and Securities Pvt. Ltd (hereinafter referred to as KRCSSPL) is a registered member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and MCX Stock Exchange Limited. KRCSSPL is a registered Research Entity vide SEBI Registration No. INH000001295 under SEBI (Research Analyst) Regulations, 2014.

We submit that no material disciplinary action has been taken on KRCSSPL and its associates (Group Companies) by any Regulatory Authority impacting Equity Research Analysis activities.

KRCSSPL prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analyst covers.

The information and opinions in this report have been prepared by KRCSSPL and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of KRCSSPL. While we would endeavor to update the information herein on a reasonable basis, KRCSSPL is not under any obligation to update the information. Also, there may be regulatory, compliance or other reasons that may prevent KRCSSPL from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or KRCSSPL policies, in circumstances where KRCSSPL might be acting in an advisory capacity to this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. KRCSSPL will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. KRCSSPL accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. Our employees in sales and marketing team, dealers and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed herein, .In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest.

Associates (Group Companies) of KRCSSPL might have received any commission/compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of brokerage services or specific transaction or for products and services other than brokerage services.

KRCSSPL or its Associates (Group Companies) have not managed or co-managed public offering of securities for the subject company in the past twelve months

KRCSSPL encourages the practice of giving independent opinion in research report preparation by the analyst and thus strives to minimize the conflict in preparation of research report. KRCSSPL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither KRCSSPL nor Research Analysts have any material conflict of interest at the time of publication of this report.

It is confirmed that, Dhavan Shah [B.Com, MS(Finance)], research analyst, & Bhavik Shah [MMS(Finance)], research associate, of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific brokerage service transactions.

KRCSSPL or its associates (Group Companies) collectively or its research analyst do not hold any financial interest/beneficial ownership of more than 1% (at the end of the month immediately preceding the date of publication of the research report) in the company covered by Analyst, and has not been engaged in market making activity of the company covered by research analyst.

Since associates (Group Companies) of KRCSSPL are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report.

It is confirmed that, Dhavan Shah [B.Com, MS(Finance)], research analyst, & Bhavik Shah [MMS(Finance)], research associate, do not serve as an officer, director or employee of the companies mentioned in the report.

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