IPO Note : National Securities Depository Ltd by Geojit Financial Services Ltd
Anchoring Growth in India’s Capital Market...
National Securities Depository Ltd (NSDL) is a SEBI-registered Market Infrastructure Institution (MII) that provides a secure and scalable digital framework for India’s financial markets. As a leading depository, NSDL enables seamless holding and transfer of securities via Demat accounts, supporting a broad spectrum of asset classes—ranging from equities and debt instruments to mutual funds, REITs, InvITs, AIFs, and sovereign gold bonds. As of March 31, 2025, NSDL managed over 39.45 million active Demat accounts via 294 depository participants, with account holders across 99.34% of Indian pincodes and 194 countries.
* India’s depository market grew at ~27.4% CAGR from FY17-FY25 and is expected to grow at ~11–12% CAGR over FY25-FY27, fuelled by retail investor interest, digitization and rising financial literacy.
* As of FY25, NSDL held a dominant position in securities custody, servicing 99.99% of dematerialized holdings by foreign portfolio investors. It also managed RS.70,167.65 bn in assets for individuals and HUFs, capturing 67.90% of that specific market segment.
* NSDL’s payment bank business contributes ~51% of revenues in FY25, which is less profitable than other parts of its business due to lower margins. NSDL’s institutional-heavy client base results in elevated compliance and infrastructure costs, increasing the cost of operation.
* In FY25, NSDL saw its registered issuers (for example, issuance of new listed and non-listed securities like equity and non-equity) jump from 46,015 to 79,773, a 73% YoY increase, reflecting strong corporate engagement with capital markets.
* The assets under custody (AUC) of NSDL is ~6.6x that of its peer CDSL in FY25, indicating its strong institutional client base and high revenue visibility driven by the recurring custody and maintenance fees, transaction linked charges, and greater engagement across its depository and value-added services.
* NSDL delivered strong financial results over FY23–25, with revenue, EBITDA, and PAT growing at CAGRs of 17.9%, 21.2%, and 20.9%, respectively—driven by stable revenue streams and improved operating efficiency.
* At the upper price band of RS.800, NSDL’s FY25 P/E ratio of 47x appears reasonably priced compared to its peer. Considering its dominant share in AUC, rapid growth in financials, stable revenue stream, healthy return ratios and focus on digital infrastructure expansions ahead, we assign a ‘Subscribe’ rating with a long-term investment perspective.
Purpose of IPO
The issue consists of an OFS of RS.4,012cr. The investor selling shareholders are IDBI Bank Ltd, NSE Ltd, Union Bank Ltd, State Bank of India Ltd, HDFC Bank Ltd (SS) and Administrator of the Specified Undertaking of the Unit Trust of India. The object of the offer is to achieve the benefits of listing the equity shares on the stock exchanges.
Key Risks
* IT system failures or breaches may disrupt business, harm reputation, and incur SEBI penalties.
* In FY25, ~30% of revenue comes from transaction fees; lower market activity could impact delivery-based earnings.
For More Geojit Financial Services Ltd Disclaimer https://www.geojit.com/disclaimer
SEBI Registration Number: INH200000345
