The much-anticipated Initial Public Offering (IPO) of
National Securities Depository Limited (NSDL) opened for public
subscription on July 30, 2025, marking a pivotal event in India’s
capital market landscape. As the country's first and largest depository,
NSDL’s IPO is entirely an Offer for Sale (OFS) of 5.01 crore equity
shares by existing stakeholders, aiming to raise ₹4,012 crore. The
IPO is open until August 2, with listing expected on August 6 on
the BSE.
IPO Snapshot: Numbers, Valuation & Subscription
The price band is fixed at ₹760–₹800 per share, with
a minimum lot size of 18 shares. On Day 1, the IPO saw a subscription
of 0.78x overall, with retail investors covering 84%, NIIs 1.32x,
and QIBs 26%.
Despite early enthusiasm, grey market premium (GMP)
slipped from ₹156 to ₹130, suggesting listing gains may be limited to
around 16%, or an estimated listing price of ₹930. While not
disappointing, this is below the peak IPO buzz of mid-July.
Business Fundamentals: Dominant Market Share, Solid
Financials
Founded after the Depositories Act, 1996, NSDL has
become the backbone of India's depository ecosystem. As of FY25, it held a market
share of 86.8% by value and 85.1% by number of securities, managing 39.5
million demat accounts through 65,391 service centres.
In FY25, NSDL posted a revenue of ₹1,420 crore (up
12% YoY) and a profit after tax of ₹343 crore (up 25% YoY). Its EBITDA
margin stood at 34.71%, highlighting operational efficiency. The company
has diversified its income via subsidiaries like NDML and NSDL
Payments Bank, expanding into e-governance, reg-tech, and digital
banking.
Valuation vs Peer: NSDL vs CDSL
The IPO is valued at a P/E of 46.62x and P/B of
7.98x, compared to CDSL’s P/E of 60.43x and P/B of 18.08x.
While CDSL enjoys better profitability metrics with a 53.2% operating margin
(vs. NSDL’s 24%), NSDL dominates in overall assets under custody and
institutional client base.
Analysts from Anand Rathi, Canara Bank Securities,
and Deven Choksey Research have recommended a ‘Subscribe’ rating,
citing NSDL’s near-monopoly, robust infrastructure, and long-term industry
tailwinds, such as the financialization of savings and deepening
capital markets.
Key Risks & Shareholder Exit
Since the IPO is an OFS, no fresh capital will be
infused into the business. Major exits include IDBI Bank (2.22 crore shares)
and NSE (1.8 crore shares), driven in part by SEBI norms limiting
single shareholder stakes in market infrastructure institutions to 15%.
Final Verdict: A Strategic Long-Term Investment
Though short-term listing gains may not be extravagant,
NSDL’s monopoly-like status, expanding revenue base, and critical
role in India’s financial ecosystem make it a solid bet for long-term
investors with moderate risk appetite. However, margin pressures
and increasing retail competition from CDSL warrant watchful optimism.
Disclaimer:
This article is for informational purposes only and does not constitute
investment advice. Readers are advised to consult their financial advisors
before making investment decisions.
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