NSDL offers long-term play in a growing capital market
30 Jul 2025
Lower margins and valuation than CDSL, but NSDL's dominant market share and institutional support favor long-term investor confidence and growth.
Lower margins and valuation than CDSL, but NSDL's dominant market share and institutional support favor long-term investor confidence and growth.
NSDL
Expert Analysis
NSDL offers long-term play in a growing capital market.
Expert Analysis :
Fundraising and Market Comparison: NSDL plans to raise ₹4,011 crore through an OFS, but despite ₹464.2 lakh crore in custody, 15% of which is CDSL’s ₹70.5 lakh crore—its operating margin and net profit are lower than CDSL’s.
IPO Valuation and Industry Growth: NSDL’s lower IPO valuation reflects its profitability metrics, even as India’s demat account penetration reached 13.4% in FY25, growing at 21.9% annually over the past 10 years, according to Crisil.
Revenue Model and Establishment: Depositories earn revenue mainly through transaction fees, custody charges, and annual fees; NSDL was established in 1996.
Market Share and Reach: As of March 2025, NSDL held 85.1% of securities by number and 86.8% by value, with 39.5 million active demat accounts and a network of 65,391 service centers, according to Crisil.
Financial Growth Performance: Between FY23 and FY25, NSDL’s total income and net profit grew annually by 18.1% and 20.9% to ₹1,535.1 crore and ₹343.1 crore respectively; EBITDA rose 22.5% to ₹492.9 crore, and RoE improved to 17.1% from 16.4%.
Profitability Comparison: Despite financial growth, NSDL lags CDSL in key profitability metrics, operating at thinner margins with a 24% FY25 operating profit margin versus CDSL’s 53.2%.
Valuation Comparison: NSDL seeks a P/E multiple of up to 46.6, lower than CDSL’s 68, as CDSL commands a premium due to its more profitable business model.
Anchor Investor Participation: NSDL raised ₹1,201.4 crore from 61 anchor investors by allotting 15 million shares at ₹800 each, including LIC, SBI MF, HDFC MF, and others.