IPO closes on 1 Aug'25
National Securities Depository Ltd
Minimum Investment
₹ 14,400 / 18 shares
Grey market premium
₹ 136 (17% premium)
Our Verdict:
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- National Securities Depository Ltd (NSDL) has a well-diversified revenue mix with stable, annuity-like income streams and a largely fixed cost structure, resulting in high operating leverage and strong margins. The firm maintains a debt-free balance sheet and delivers healthy return ratios. Furthermore, new ventures like the insurance repository offer future revenue potential, although the payments bank remains a drag on profitability and return ratios (as detailed below).
- On the valuation front, the IPO is priced at a P/E multiple of 47x — representing a ~30% discount compared to its only listed peer, CDSL. Additionally, the grey market premium (GMP) reflects strong investor sentiment and indicates the potential for a positive listing.
- NSDL leads the industry in terms of number of issuers, assets under custody and other key parameters. However, it holds only ~21% of total demat accounts — the primary driver of fee income — which explains its lower profitability relative to CDSL.
- Despite this, we recommend subscribing to the IPO due to its relatively reasonable valuation and strong growth prospects. Operating in a duopolistic market, NSDL—backed by sound financials and a robust business model—is well-positioned to benefit from the increasing scale and depth of India’s capital markets.
About the company
Founded in
27 Apr'12
Managing director
Vijay Chandok
- NSDL is one of the two SEBI-registered depositories in India, alongside CDSL, and is recognised as a Market Infrastructure Institution (MII). It facilitates electronic holding and transfer of securities through Demat Accounts, which are operated via registered Depository Participants (DPs).
- As of FY25, NSDL managed 3.9 crore demat accounts through 294 DPs. Its network included 65,391 DP service centres—significantly higher than CDSL’s 18,918 centres.
- Through its subsidiaries—NSDL Database Management Ltd (NDML) and NSDL Payments Bank Ltd (NPBL)—NSDL also offers a suite of IT-enabled financial and regulatory services. NDML functions as a KYC Registration Agency (KRA), Registrar and Transfer Agent (RTA), online payment aggregator, insurance repository and also supports various e-governance initiatives.
STRENGTHS
- Market Leadership: As of March 31, 2025, NSDL is the largest depository in India in terms of number of issuers, active instruments, demat market share (by value), settlement volumes and total assets under custody.
- Dominance in Asset Custody: NSDL holds a strong position across diversified asset classes, with approximately 85.06% of total securities by number and 86.81% by value as of FY25. Its higher custody value enables monetization through services like pledges, margin pledges and loans against securities (LAS).
- Steady Growth: Between FY23 and FY25, NSDL recorded a healthy CAGR of 18% in operating revenue, 22% in EBITDA and 21% in net profit—reflecting steady growth across financial metrics.
- Robust Return Ratios: NSDL demonstrates strong operational efficiency, with a Return on Equity (RoE) of 17.11% in FY25, indicating effective capital utilization.
- Improving Margins: NSDL has seen notable margin expansion, with operating profit margin increasing from 20.57% in FY24 to 23.95% in FY25 and net profit margin rising from 20.17% to 22.35%.
RISK FACTORS
- Dependence on Depository Revenues: The depository business accounts for 43.6% of total revenues. This segment is sensitive to the overall investment climate in India. A shift in investor preference toward alternative asset classes could reduce demand for depository services.
- Transaction-Based Revenue Volatility: Approximately 30% of revenue is transaction-based and highly dependent on trading volumes, investor sentiment, macroeconomic trends and regulatory changes. A sustained decline in market activity could materially affect this revenue stream.
- Payments Bank Performance: The payments bank division of NSDL has incurred losses in the past due to high operating costs and an elevated cost-to-income ratio, posing a drag on overall profitability.
- Lagging Market Share Vs CDSL: As of FY25, NSDL managed 3.9 crore demat accounts and 294 DPs, compared to CDSL’s 15.3 crore accounts and 574 DPs. This gap is largely due to NSDL’s slower integration of new-age fintech brokers, who have grown significantly over the past decade. Continued lack of integration with these brokers could further limit growth and erode market share.
- Legal Risks: NSDL, along with its directors and subsidiaries, is involved in legal proceedings amounting to ~Rs 458 crore. An adverse ruling in any of these cases could negatively affect the company’s reputation, business operations and financial performance.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 4,011.60 crore
Fresh Issue
₹ -
OFS
₹ 4,011.60 crore
Price range
₹ 760 - 800
Lot size
18 shares
Issue Objective
This issue is a pure Offer for Sale (OFS), meaning the company will not receive any proceeds from the issue. The proceeds will go directly to the selling shareholders.
Dates
Bidding open
30 Jul'25
Bidding close
1 Aug'25
Allotment date
4 Aug'25
Refund date
5 Aug'25
Listing
6 Aug'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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