NSDL IPO: Key Details Every Investor Must Know

NSDL IPO: A Deep Dive into India’s Largest Depository Going Public

The National Securities Depository Limited (NSDL) IPO is one of the most anticipated public offerings in India’s financial markets in 2025. As India’s leading securities depository, NSDL plays a pivotal role in the country’s capital market infrastructure. With its upcoming IPO set to open on July 30, 2025, investors are eager to understand what this opportunity entails. This blog explores the NSDL IPO details, its business model, financial performance, and what investors should consider before applying.

What is NSDL?

Founded in 1996, NSDL is India’s first and largest securities depository, registered with the Securities and Exchange Board of India (SEBI) as a Market Infrastructure Institution (MII). It revolutionized India’s financial markets by introducing dematerialization, transitioning securities from paper-based to electronic form. Today, NSDL holds a dominant market share, managing 84.03% of securities by number and 88.39% by value as of March 31, 2023.

NSDL offers a wide range of services, including:

• Dematerialization and Trade Settlement: Enabling investors to hold and transfer securities in electronic demat accounts.
• Corporate Actions: Facilitating dividends, bonus issues, and other corporate events.
• Additional Services: E-voting, consolidated account statements (CAS), and non-disposal undertakings (NDU).
• Subsidiaries: NSDL Database Management Limited (NDML) and NSDL Payments Bank Limited (NPBL), which provide e-governance, KYC, and digital banking services.

With over 31.46 million active demat accounts and a network spanning 99% of India’s pin codes, NSDL is a cornerstone of the nation’s financial ecosystem.

NSDL IPO Details

The NSDL IPO is a 100% Offer for Sale (OFS) of 50.15 million equity shares, reduced from an initial 57.26 million shares, as per an addendum to the Draft Red Herring Prospectus (DRHP) filed with SEBI. Since it’s an OFS, NSDL will not receive any proceeds; instead, the funds will go to selling shareholders, including major institutions like IDBI Bank (26.10% stake, offloading 22.22 million shares), National Stock Exchange (NSE, 24% stake, offloading 18 million shares), State Bank of India (SBI), HDFC Bank, and Union Bank of India. This sale aligns with SEBI’s directive for institutional investors to reduce holdings below 15% by October 13, 2025.

Key IPO Details:

• IPO Open Date: July 30, 2025
• IPO Close Date: August 1, 2025
• Price Band: ₹760–₹800 per share
• Issue Size: Approximately ₹3,750–₹4,000 crore
• Lot Size: To be announced
• Allotment Date: August 4, 2025
• Listing Date: August 6, 2025 (tentative)
• Exchanges: BSE and NSE
• Registrar: MUFG Intime India Private Limited
• Book-Running Lead Managers: ICICI Securities, Axis Capital, HDFC Securities, IDBI Capital, SBI Capital Markets, and others

The IPO allocates 50% to Qualified Institutional Buyers (QIB), 15% to High Net-Worth Individuals (HNI), and 35% to retail investors.

Financial Performance of NSDL

NSDL has demonstrated robust financial growth, making it an attractive prospect for investors. Key financial highlights include:

• Revenue Growth: Revenue from operations increased from ₹467.569 crore in FY21 to ₹1,099.81 crore in FY23, with total income for FY25 reaching ₹1,535.19 crore.
• Profit After Tax (PAT): PAT grew from ₹188.565 crore in FY21 to ₹234.81 crore in FY23, with FY25 reporting ₹343.12 crore.
• Q4 FY25 Performance: Net profit rose 4.77% year-on-year to ₹83.3 crore, with total income up 9.94% to ₹394 crore.
• Zero Debt: NSDL maintains a debt-free balance sheet, with a 40% increase in net worth from FY21 to FY23.
• Dividend History: The company paid ₹20 crore annually in dividends, though the payout ratio decreased from 9.4% in FY22 to 6.3% in 9MFY25.

NSDL’s revenue streams are diverse, including custody fees, transaction fees, and annual maintenance charges, ensuring stable, recurring income. Its subsidiary, NSDL Payments Bank, contributes significantly, with transactions worth ₹7,386 crore in FY23.

Why is the NSDL IPO Significant?

The NSDL IPO is a landmark event for several reasons:

1. First Depository IPO: NSDL is the first Indian depository to go public, setting a benchmark for financial infrastructure companies like KFintech and CAMS.
2. Market Leadership: NSDL handles 88.39% of securities by value and services nearly 100% of foreign portfolio investors’ dematerialized assets, reinforcing its dominance over competitor CDSL.
3. Regulatory Compliance: The OFS aligns with SEBI’s mandate for shareholders to reduce stakes, enhancing transparency and liquidity.
4. Valuation: The IPO is expected to value NSDL at ₹15,000–₹16,000 crore, reflecting its strong fundamentals and market position.

However, recent posts on X indicate mixed sentiment. The grey market premium (GMP) has dropped from 40% to 15%, with unlisted shares trading at ₹975–₹1,000, down from a peak of ₹1,250. This suggests a correction in investor expectations, potentially due to high valuations or market dynamics.

Should You Invest in the NSDL IPO?

Pros:

• Strong Fundamentals: Consistent revenue and profit growth, zero debt, and a healthy balance sheet make NSDL a financially stable investment.
• Market Dominance: NSDL’s leadership in high-value securities and extensive network across 2,000 cities ensures long-term relevance.
• Growing Market: The Indian depository market is projected to grow at a 12% CAGR from FY23 to FY27, driven by rising retail participation and digitalization.

Cons:

• No Fresh Capital: As an OFS, the IPO won’t fund NSDL’s growth, potentially limiting immediate expansion plans.
• Competition: NSDL faces competition from CDSL, which has a stronger retail investor base and higher RoNW.
• Regulatory Risks: Non-compliance with data protection or SEBI regulations could impact operations.
• Valuation Concerns: Some X posts suggest the IPO price band of ₹760–₹800 may be high, with unlisted share prices correcting recently.

How to Apply for the NSDL IPO

Investors can apply through:

1. ASBA (Applications Supported by Blocked Amount): Use net banking to block funds in your account.
2. UPI: Apply via brokers like Zerodha, Kotak Securities, or 5paisa by entering lot size, price, and UPI ID, then approving the mandate on your UPI app.

If you don’t have a demat account, you can open one through this link on Zerodha.

Check allotment status on the BSE website after August 4, 2025.

Conclusion

The NSDL IPO presents a unique opportunity to invest in India’s largest securities depository, a critical player in the financial markets. With strong financials, a dominant market position, and a technology-driven approach, NSDL is well-positioned for long-term growth. However, investors should weigh the high valuation, competitive landscape, and lack of fresh capital against its strengths. Conduct thorough research and consult a financial advisor before applying. Stay updated on the IPO’s subscription status and grey market trends to make an informed decision.

Disclaimer: This blog is for educational purposes only and not a recommendation to invest. Always perform your own due diligence or consult a financial advisor before making investment decisions.