The much-awaited ₹4,011 crore initial public offering (IPO) of India’s oldest depository, the National Securities Depository (NSDL) opens for subscription today. Priced between ₹760 and ₹800 per share, the entire issue is an offer for sale (OFS), meaning that the company itself will not receive any proceeds. Instead, existing shareholders, including IDBI Bank, NSE, HDFC Bank, and SBI, who are collectively offloading 5.01 crore shares, will mint the proceeds.
The listing marks a rare entry from the capital market infrastructure space and comes at a time when retail participation in equities is at an all-time high. While NSDL’s role in the Indian securities market remains well-established, analysts stand divided on its valuation comfort, revenue visibility, and how it stacks up against listed rival CDSL.
Anchor Support
Ahead of the public issue, NSDL raised ₹1,201 crore from anchor investors, attracting names such as LIC, Fidelity Funds and the Abu Dhabi Investment Authority (ADIA).
LIC emerged as the top anchor investor in NSDL’s IPO, bagging 12% of the total shares allotted in the anchor portion. Meanwhile, Abu Dhabi Investment Authority (ADIA) picked up a 1.17% stake with an investment of ₹14 crore.
In the unofficial market, NSDL’s shares are currently commanding a grey market premium (GMP) of around ₹125. This suggests a potential listing gain of roughly 15% over the issue’s top-end price. While the GMP does reflect listing gains, its trend has weakened through the days leading up to the public issue.
Price Band Turns Heads
The price band for NSDL’s IPO has been drawing attention, largely for being at a stark discount to its price in the unlisted market. Earlier this month, NSDL shares were trading at approximately ₹1,025, and even peaked at ₹1,275 in June, according to data from UnlistedZone. That puts the IPO price band at a 22% discount to recent unlisted market valuations.
This has sparked comparisons to HDB Financial Services, whose IPO surprised many with a lower-than-expected price band. While HDB did debut above its issue price, investors who had already bought the stock in the unlisted space at premium levels had taken a hit.
Analyst View: A Long-Term Bet
Analysts, by and large, have a positive outlook on the IPO, especially for investors with a long-term horizon. Most brokerages see value in NSDL’s role as a key pillar in India’s financial infrastructure, especially as capital market participation continues to deepen.
Anand Rathi has tagged the IPO with a “subscribe” recommendation, calling the pricing “reasonable” when compared to its listed peer, CDSL. At the upper price band of ₹800, NSDL is valued at a price-to-earnings (P/E) ratio of around 46.6 times, comfortably below CDSL’s 66.6 times. That said, the brokerage also notes the company’s revenue concentration around transaction-based fees as a potential risk, along with sensitivity to shifts in investor behaviour.
Angel One echoes this cautiously optimistic view. It highlights the broader tailwinds for the industry, like rising financial literacy, digitisation, and growing retail participation in markets. These trends are likely to boost NSDL’s long-term relevance, especially in underpenetrated segments. However, it also flags possible regulatory pressures and increasing competition in the demat services space as key watchpoints.
Bajaj Broking also leans bullish, pointing out that demat account penetration in India stands at just 13.4% as of FY25, leaving significant headroom for expansion. In their view, NSDL is well-positioned to capture that upside.
In essence, while analysts aren’t expecting fireworks on listing day, they largely vouch for NSDL being a solid long-term bet for those willing to tune out near-term noise and focus on India’s evolving capital market story.
Financial Snapshot
At the upper end of the price band, NSDL is valued at ₹16,000 crore. It operates the largest depository network in the country, with 65,391 service centres, more than triple the footprint of its rival, CDSL. Financially, NSDL reported a net profit of ₹343.1 crore in FY25, marking a 24.6% year-on-year increase. Revenue for the year stood at ₹1,420.1 crore, up 12% on year.
To sum it up, NSDL’s IPO arrives with a fair valuation relative to peers, strong institutional backing, and long-term growth potential. However, competition from CDSL and regulatory risks may weigh on future margins. And so, for investors seeking more than just short-term listing gains, NSDL may offer a stable, long-duration play on India’s maturing capital markets.
