People have you ever wondered what is CDSL and when you create your Demat account you will get a unique CDSL Account number, what is it. And what it actually CDSL mean.
CDSL is called Central Depository6 Services Limited and is Government registered share depository, where it records the depositories of shareholders in electronic form.
People way back in 1996 the shareholding was in paper format, where a person can buy the shares of the concerned company through papers.
In the movie scam 1992, you can see the trading has happened using certificates in the ring. Where there were many loopholes.
But things go on changing, in 1996 Government took a decision to make this as digital form. The process of converting paper format into digital format is called "DEMATERIALIZATION". Often called "DEMAT".
The place where shares are stored digitally is called DEMAT. And this Demat account will be linked to your trading app. So, here the trading app acts as a medium where the actual shares are stored in DEMAT.
CDSL will do exactly the same. CDSL offers the service of a Demat account in which every share is allocated and stored.
CDSL was formed in the year 1999, but before CDSL, NSDL was established in the year 1996 which acts the same as CDSL.
Now CDSL is an organization, where CDSL will get money to operate its Administration.
People when you sell shares from your Demat account, you are subjected to pay 13.5 rupees per company as TAX. Now the question, where this money goes, well this money goes to CSDL because it operates your shares and you should pay as tax.
And every year you are asked to pay Annual maintenance charges where a part of the money will be collected by CSDL. So,
The No.of Demat accounts opening = Increase in the Revenue of CSDL.
People you won't believe me but,
In 2020-2021 itself almost 4.11 crore people have opened their Demat accounts. And when you look at the share price of the company, CSDL share has given more than 120% in just one year. Their revenue has increased from 86 crores in Dec 2020 to 152 crores in Dec 2021. CSDL has no competitors to its sectors because it is the first depository to get listed in IPO.
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posted by varun