NSDL’s ₹3,400cr IPO Set to Hit Markets in July: What Investors Should Know

NSDL is India's largest depository by market share and assets under custody. With NSDL planning a public offering to raise an anticipated $400 million, it is not just another IPO. Rather, it is a rare opportunity to have a piece of the infrastructure that forms the operational backbone of the economy.

So, if this announcement has piqued your interest, this is a good time to begin your homework as the NSDL IPO is expected to hit the markets in July 2025.

IPO Structure and Key Details

• Offer for Sale (OFS): The NSDL IPO is a pure offer for sale, meaning no new shares are being issued. Instead, existing shareholders – including IDBI Bank, National Stock Exchange (NSE), and Union Bank of India – are offloading their stakes.

• Issue Size: The offer size has been trimmed to 50.15 million shares (from an initial 57.26 million), with an estimated total raise of ₹3,400 crore.

• Listing: Shares will be listed on BSE, giving you ample liquidity and visibility as an investor.

• Lead Managers: The IPO is being managed by a consortium of top investment banks, including ICICI Securities Ltd, Axis Capital Ltd, HSBC Securities and Capital Markets (India) Pvt Ltd, IDBI Capital Markets and Securities Ltd, Motilal Oswal Investment Advisors, and SBI Capital Markets Ltd.

Business Model and Financial Performance

NSDL is not just a depository – it is the backbone of the Indian securities market, facilitating the dematerialisation, settlement and safekeeping of securities in electronic form. Its clientele includes exchanges, brokers, custodians, mutual funds and institutional investors, making it a systemically important financial utility.

• Revenue Streams: NSDL earns through issuer charges, transaction fees, and value-added services like e-voting, KYC authentication, and digital vault services.

• Financials: The company has shown consistent growth, with revenue rising from ₹1,099.8 crore in FY23 to ₹1,535 crore in FY25, and net profit increasing from ₹234.8 crore to ₹343 crore over the same period.

• Profitability: NSDL enjoys robust margins, with an EBITDA margin of 25.1% reported for the March 2025 quarter.

Risks and Considerations

• No Fresh Capital: Since the IPO is an OFS, NSDL won’t receive any proceeds for business expansion. The listing is primarily to comply with SEBI’s shareholding norms and provide liquidity to existing investors.

• Regulatory Scrutiny: NSDL has faced regulatory challenges in the past, notably in the Karvy Stock Broking case. However, it has responded to SEBI’s concerns and continues to maintain high compliance standards.

• Retail Penetration: NSDL’s lower retail account base compared to CDSL may limit short-term growth, but its institutional focus ensures stability.

• IPO Pricing: With unlisted shares recently trading at ₹1,200–1,250, but the IPO likely to be priced lower (₹750–₹800), there’s speculation about listing gains but also caution about valuation comfort.

Conclusion

If you are looking to invest in a renowned, established player in India’s securities market, the NSDL IPO is an opportunity worth considering. This IPO is taking place during a period of considerable growth in India's capital markets, which will only enhance NSDL's importance. Given that this is an IPO without new capital and a business model primarily geared toward institutions, investment thesis here should be long-term stability vs a quick profit on the listing.