NSDL IPO opens today: India's oldest depository goes public with 4,012 crore IPO; should you subscribe? What analysts say
The IPO, which is entirely an offer for sale (OFS) by existing shareholders, aims to raise Rs 4,012 crore, with no fresh capital being raised. The offering comprises 5.01 crore equity shares and is set to close on August 1, with the listing anticipated on the Bombay Stock Exchange (BSE) on August 6.
IPO Details and market reception
The price band for the NSDL IPO is set between Rs 760 and Rs 800 per share. Ahead of the opening, the grey market premium (GMP) was reported at 16%, indicating a positive reception among investors, .
Investors can bid for a minimum of 18 equity shares and in multiples thereafter.
NSDL, established as the first depository in India following the Depositories Act of 1996, plays a crucial role in the country's financial infrastructure. It offers a wide range of depository services across various asset classes, including equities, debt, mutual funds, and more. The company's extensive network covers over 99% of PIN codes in India, with a client base spanning 186 countries.
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Financial performance and valuation
In the fiscal year 2025, NSDL reported a revenue of Rs 1,420 crore, marking a 12% increase from the previous year. The profit after tax rose by 25% year-on-year to Rs 343 crore, with an EBITDA margin of 34.71%, showcasing strong operational efficiency. NSDL has diversified its revenue streams through subsidiaries like NSDL Database Management Ltd (NDML) and NSDL Payments Bank Ltd (NPBL), expanding into e-governance, regulatory platforms, and digital banking.
The IPO is priced at a P/E of 46.62x and a P/B of 7.98x based on FY25 earnings. In comparison, its peer Central Depository Services (India) Ltd (CDSL) trades at a higher P/E of 60.43x and P/B of 18.08x. Despite CDSL's higher valuation, NSDL commands a larger share of demat assets and a broader service infrastructure.
Market analysis and recommendations
According to Economic Times analysis, brokerages have largely recommended a 'Subscribe' rating for the NSDL IPO, particularly for long-term investors.
Analysts from Anand Rathi and Canara Bank Securities, cited by ET, highlight NSDL's near-monopoly status in the depository ecosystem, robust financials, comprehensive product coverage, and strategic importance to India's capital market infrastructure as key positives.
The ET Intelligence Group noted that while NSDL's peer CDSL has a demat custody value of Rs 70.5 lakh crore, just 15% of NSDL's Rs 464.2 lakh crore, NSDL's lower operating margin and net profit reflect in its lower IPO valuation.
However, the long-term growth prospects for the sector remain promising, driven by the increasing financialisation of savings and deepening capital markets.
Business and financial insights
NSDL generates revenue primarily through transaction fees, custody charges, and annual fees. As of FY25, NSDL held 85.1% of total securities by number and 86.8% by value, with 39.5 million active demat accounts and a network of 65,391 service centers.
The company has focused on institutional clients and larger-value transactions, while CDSL has carved out a niche in the expanding retail investor segment.
Despite NSDL's strong financial growth, it trails CDSL in several profitability metrics and operates at thinner margins. NSDL's operating profit margin for FY25 was 24%, compared to CDSL's 53.2%. The depository raised Rs 1,201.4 crore from 61 anchor investors, including prominent names like LIC, ICICI Prudential MF, and Abu Dhabi Investment Authority.
The NSDL IPO presents a compelling opportunity for investors with a long-term horizon and moderate risk tolerance. While the company faces challenges in profitability compared to its peer CDSL, its dominant market position, diversified revenue streams, and strategic importance to India's financial infrastructure makes it a high-demand investment opportunity.
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