In a major development for India’s capital markets, National Securities Depository Limited (NSDL), backed by IDBI Bank and the National Stock Exchange (NSE), is set to launch its highly anticipated initial public offering (IPO) next week, aiming to raise $463 million (approximately ₹3,860 crore) at a valuation of $1.85 billion (around ₹15,450 crore). The listing is expected to strengthen India’s depository infrastructure sector and provide fresh growth capital to the company as markets deepen further.
IPO Details
NSDL’s IPO will consist of an offer for sale (OFS) by existing shareholders, including IDBI Bank, NSE, State Bank of India, and Union Bank of India. According to draft papers filed with SEBI, the company will not issue fresh shares, and proceeds will go to the selling shareholders.
| IPO Details | Particulars |
|---|---|
| Issue Size | $463 million (₹3,860 crore) |
| Valuation | $1.85 billion (₹15,450 crore) |
| Type | Offer For Sale (OFS) |
| Key Selling Shareholders | IDBI Bank, NSE, SBI, Union Bank |
| Launch Date | Next week (final date awaited) |
| Listing Exchange | BSE and NSE |
About NSDL
Founded in 1996, NSDL is India’s oldest and largest depository participant, holding dematerialised securities worth over ₹315 lakh crore ($3.8 trillion) as of March 2025. It provides custodial, clearing, settlement, and related services to investors and brokers.
- Promoters: IDBI Bank (holds ~26%), NSE (~24%)
- Registered DP Accounts: 3.24 crore (32.4 million)
- Market Share: ~89% of demat assets in India
Financial Performance Snapshot
| Particulars (₹ crore) | FY23 | FY24 | YoY Growth (%) |
|---|---|---|---|
| Revenue | 960 | 1,125 | +17.2 |
| EBITDA | 538 | 640 | +18.9 |
| EBITDA Margin (%) | 56.0 | 56.9 | +90 bps |
| Net Profit | 350 | 415 | +18.6 |
| Net Profit Margin (%) | 36.5 | 36.9 | +40 bps |
The company maintains robust margins owing to its strong market position, low capital intensity, and technology-led scalable operations.
Key Business Segments
- Dematerialisation & Custody Services: Core business, holding listed equity, debt securities, mutual fund units, and government securities in demat form.
- Issuer Services: Corporate actions, e-voting, IPO allotments, pledge & hypothecation services.
- KYC Registration Agency (KRA): PAN-based investor KYC repository.
- National Insurance Repository: Facilitates e-insurance account opening and policy dematerialisation.
| Segment | FY24 Revenue Share (%) |
|---|---|
| Demat & Custody Services | 62 |
| Issuer & Transaction Services | 27 |
| KRA & Insurance Repository | 11 |
IPO Objectives & Strategic Rationale
While NSDL will not receive direct proceeds, the IPO will:
- Provide liquidity to promoter banks and exchanges
- Enhance NSDL’s brand equity as a listed entity
- Enable future fund-raising opportunities for growth initiatives
- Strengthen corporate governance through diversified ownership
Market Context And Timing
The IPO launch comes amid robust market liquidity, with the Sensex crossing 80,000 levels and record monthly Demat account openings, driven by retail investor participation and increasing mutual fund inflows. India’s depository ecosystem has witnessed exponential growth over the past five years with surging primary issuances and equity market penetration.
Peer Comparison
NSDL’s only direct competitor is Central Depository Services (India) Ltd (CDSL), which listed in 2017 and has delivered strong returns to shareholders since.
| Company | FY24 Revenue (₹ crore) | Net Profit (₹ crore) | Market Cap (₹ crore) | EBITDA Margin (%) |
|---|---|---|---|---|
| NSDL | 1,125 | 415 | 15,450 (expected IPO) | 56.9 |
| CDSL | 1,230 | 505 | 15,300 | 58.2 |
Analysts expect NSDL’s IPO valuation to be in line with CDSL, given its dominant market share in demat assets despite CDSL’s larger number of active accounts.
Management Commentary
A senior NSDL executive stated:
“Our listing marks a historic milestone as we continue to strengthen India’s capital markets infrastructure. It will broaden our ownership base, drive transparency, and position us to capitalise on India’s rapid financialisation.”
India’s Depository Industry Outlook
| Metric | FY20 | FY25E | CAGR (%) |
|---|---|---|---|
| Total Demat Accounts (crore) | 3.6 | 14.5 | +31.7 |
| Demat Assets Under Custody (₹ lakh crore) | 165 | 340 | +15.4 |
Industry experts believe increasing retail participation, financial literacy, and digitalisation will continue to drive structural growth for depositories.
Potential Risks
- Regulatory changes: SEBI regulations impact fee structures and operational models.
- Cybersecurity risks: As a critical infrastructure, NSDL is vulnerable to cyber threats.
- Concentration risk: Limited competition with duopoly market structure.
Stock Market Reaction
Ahead of IPO launch, shares of IDBI Bank and NSE’s unlisted shares have seen heightened investor interest, anticipating monetisation benefits from stake sale. CDSL shares rose 3% intraday on optimism towards depository sector valuation re-rating post NSDL’s listing.
| Date | IDBI Bank Price (₹) | Change (%) | CDSL Price (₹) | Change (%) |
|---|---|---|---|---|
| Jul 21, 2025 | 91.10 | — | 2,055 | — |
| Jul 22, 2025 | 93.60 | +2.7 | 2,115 | +3.0 |
Future Plans
Post-listing, NSDL plans to:
- Invest in blockchain and advanced cybersecurity solutions for depository services
- Expand its insurance repository and KYC business lines
- Explore opportunities in digital gold and asset tokenisation custody
- Enhance investor education initiatives to deepen market participation
Industry Expert Views
A capital markets analyst stated:
“NSDL’s IPO is timely and strategic, enabling partial exit to promoters and widening market ownership. Its consistent financial performance, strong brand, and dominant market position make it an attractive long-term play in India’s financial infrastructure sector.”
Conclusion
The upcoming NSDL IPO launch for $463 million at a $1.85 billion valuation is a landmark event for India’s capital market ecosystem, promising to unlock value for promoters while positioning NSDL to capitalise on structural growth in dematerialised assets and investor services. With favourable market conditions and increasing retail participation, the IPO is expected to witness robust investor demand when it opens next week.
Disclaimer
This news content is for informational purposes only. It is not intended as investment advice. Readers are advised to consult financial experts before making any business or investment decisions based on this report.
