NSDL's Rs 4,012 crore IPO opens for subscription; GMP at 16%. Should you apply?

The IPO of National Securities Depository Ltd (NSDL), India’s first and largest depository, opened for subscription on Wednesday. The mainboard issue is entirely an offer for sale (OFS) worth Rs 4,012 crore by existing shareholders, with no fresh capital being raised.

The IPO comprises 5.01 crore equity shares and will close on August 1. Investors can bid for a minimum of 18 equity shares and in multiples thereafter. NSDL will be listed on BSE, with listing likely on August 6.

NSDL IPO price band and GMP

The price band for the IPO is fixed at Rs 760 to Rs 800 per share, and the grey market premium (GMP) stood at 16% ahead of opening.

About company

NSDL is a key market infrastructure institution and the first depository to begin operations in India after the Depositories Act, 1996.

The company offers depository services across asset classes, including equities, debt, mutual funds, REITs, InvITs, AIFs, and more. Its network covers over 99% of PIN codes in India, and its client base spans 186 countries.

The depository operates on a robust annuity-like revenue model through annual issuer and transaction-based charges.

NSDL IPO: Financials and Valuation

In FY25, NSDL posted revenue of Rs 1,420 crore, a 12% rise over the previous year, while profit after tax rose 25% year-on-year to Rs 343 crore. Its EBITDA margin stood at 34.71%, reflecting strong operational efficiency.

The company has also diversified its revenue streams through subsidiaries like NSDL Database Management Ltd (NDML) and NSDL Payments Bank Ltd (NPBL), venturing into e-governance, regulatory platforms, and digital banking.

On valuation, NSDL is priced at a P/E of 46.62x and a P/B of 7.98x based on FY25 earnings. While its peer Central Depository Services (India) Ltd (CDSL) trades at a higher P/E of 60.43x and P/B of 18.08x, NSDL commands a larger share of demat assets and broader service infrastructure.

Should You Subscribe?

Brokerages have largely recommended a ‘Subscribe’ rating to the NSDL IPO for long-term investors. Anand Rathi and Canara Bank Securities cite NSDL’s near-monopoly scale in the depository ecosystem, healthy financials, wide product coverage, and strategic relevance to India’s capital market infrastructure as key positives.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)