NSDL IPO shocker: Price band 22% below unlisted market value

Economic Times

25-07-2025

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In a move that has caught investors off guard, National Securities Depository Limited (NSDL) has set the price band for its upcoming initial public offering at Rs 760–800 per share, marking a steep 22% discount to its last valuation in the unlisted market.The pricing has sparked disbelief, particularly among those active in the unofficial market, where NSDL shares had been trading at about Rs 1,025 earlier this month. According to UnlistedZone, this represents a 20% fall from the stock's peak of Rs 1,275 in June 2025.The Rs 4,011.6 crore IPO of NSDL will open for public subscription on July 30 and close on August 1, with anchor bidding set for July 29. The issue will be entirely an Offer for Sale (OFS) of up to 5.01 crore shares by existing shareholders, including IDBI Bank, NSE, Union Bank of India HDFC Bank , and SUUTI. IDBI Bank is offloading 2.22 crore shares, while NSE is selling 1.8 crore shares.NSDL is targeting a valuation of around Rs 16,000 crore through the offering. Retail investors will be required to invest a minimum of Rs 14,400 for one lot of 18 shares. The company, which filed its DRHP with SEBI in July 2023 and updated it in May 2025, has trimmed the issue size from 5.72 crore shares to 5.01 crore shares.The valuation mismatch has drawn comparisons to the recent IPO of HDB Financial Services, which also shocked investors with a price band well below its unlisted value. HDB Financial Services' IPO was priced at Rs 700–740 per share, a 40% discount to its unlisted market price of Rs 1,225 prior to the announcement. Shares in the unofficial market had peaked at Rs 1,550 in September last year.Despite the pricing shock, HDB Financial listed on July 2, 2025, at Rs 835 per share, 12.8% above the issue price. Yet, investors who purchased shares at high valuations in the unlisted market suffered losses.NSDL shares are trading at a healthy grey market premium (GMP) of Rs 145–155, implying a listing gain of about 18% over the top end of the IPO price band. GMP reflects the difference between the IPO price and the price in the unofficial grey market, though it remains speculative and unregulated.At Rs 800, the IPO values NSDL at a price-to-earnings ratio of 46.6, notably lower than its listed peer CDSL, which trades at a P/E of 66.6. The company's financials remain strong despite a slowdown in primary market activity. In Q3 FY25, NSDL posted a 29.8% year-on-year rise in consolidated net profit to Rs 85.8 crore, while total income increased 16.2% to Rs 391.2 crore.The allotment of NSDL shares is expected on August 4, with listing likely on August 6. Investors will now be watching closely to see whether the IPO follows the trajectory of HDB Financial's issue, which overcame initial skepticism to debut at a premium.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)