NSDL IPO Review
India’s leading depository service provider, National Securities Depository Limited (NSDL), is finally coming up with its long-awaited IPO. But is it worth subscribing? Let’s break it down simply.
IPO Timeline & Details
- Subscription Window: Opens July 30, 2025, Closes August 1, 2025
- Type of Issue:
🟡 100% Offer for Sale (OFS) – ~5.01 crore shares
🔴 No fresh capital is to be raised by the company. - Price Band: ₹760 – ₹800 per share
(Face Value: ₹2/share) - Lot Size: 18 shares
💰 Investment per lot: ₹13,680 – ₹14,400 (for retail investors) - Employee Discount: ₹76 per share (up to 85,000 shares)
Investor Allocation
| Category | Allocation |
|---|---|
| QIBs (Institutions) | ~50% |
| NIIs (HNI Investors) | ~15% |
| Retail Investors | ≥35% |
| Employees | Reserved with Discount |
NSDL vs CDSL – A Quick Note
While CDSL and NSDL are often compared, their business models differ:
- NSDL focuses more on institutional services (banks, large brokers)
- CDSL dominates the retail demat space (which is growing faster)
NSDL | CDSL |
| Promoter: No Promoter as defined by SEBI regulations. Major stakeholders are IDBI Bank (26.10% stake) and the National Stock Exchange (24% stake | CDSL is a BSE Promoter |
Market Share-
| Market Share-
|
| Business Model – Over 51 % of NSDL Revenue comes from Banking Service provider by their Subsidy company NSDL Payment Bank Limited
| Business Model –
|
Financials Snapshot – FY 2025
Total Revenue: ₹1,420 Cr
- Of this, ₹719.9 Cr came from Banking Services
- 51% of total revenue is contributed by NSDL Payment Bank
NSDL Payment Bank – Revenue vs Profit
| FY | Revenue (Cr) | PAT (Cr) |
|---|---|---|
| 2021–22 | ₹300 Cr | – |
| 2024–25 | ₹722 Cr | ₹2 Cr |
While revenue has increased by over 2 times in 4 years, profit hasn’t kept pace.
In FY 2025, the PAT margin is just 0.27%, which is concerning for a growing vertical.
⚠️ Competitors like Airtel Payments Bank, India Post, and Paytm Payments Bank make this segment a tough battlefield.
Growth Trend – Slowing Down
- NSDL has grown at an average 34% CAGR over 5 years.
- However, YoY growth is slowing, with only 12% in FY 2023–24.
🚨 Sustainability of growth is in question.
Challenges to NSDL’s Growth
- Regulatory Dependence
Heavily governed by SEBI – changes in policy, fee caps, etc. can directly impact revenue. - Limited Revenue Streams
Few diversified drivers; most income still concentrated in depository & banking services. - 100% OFS
No fresh funds go to NSDL; promoters are simply offloading stake. - Low Retail Exposure
CDSL’s strength is its strong retail customer base; NSDL lacks that leverage.
Valuation Check
- Market Cap (Post IPO): ~₹16,000 Cr
- Price-to-Earnings (P/E) Ratio: 46x
🔎 At 46x P/E, the IPO appears overvalued – especially when retail demat growth is slowing.
📉 Opening of new demat accounts – a key driver – is declining YoY.
Intrinsic Valuation (DCF-Based)
Based on a Discounted Cash Flow (DCF) model:
Estimated Intrinsic Value: ₹370 – ₹385/share
Assumptions:
- 12% CAGR Revenue Growth
- 11% Discount Rate
🚨 The current IPO price is more than 2x its intrinsic value.
💬 Conclusion: Apply Only for Listing Gain
- ✅ Strong brand and core market position
- ⚠️ No fresh funds, limited PAT growth, and steep valuation
- 💸 GMP (Grey Market Premium): ~18%
Our Take:
Apply only for potential listing gains,
Not recommended for long-term investment at current valuation.
