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About NSDL IPO
The National Securities Depository Ltd (NSDL) will soon come out with its IPO which will be exclusively an offer for sale. There is no fresh issue in this 100% book-built offer. The offer for sale will comprise up to 57,260,001 equity shares.
Objectives of NSDL IPO
As it’s an offer for sale, the company will not receive any proceeds from the offer. All such proceeds will go to the selling shareholders, in proportion to the offered shares sold by the respective selling shareholder as part of the offer.
NSDL IPO Valuation
| Detail | Information |
|---|---|
Upper Price Band | TBA |
Fresh Issue | NA |
Offer for Sale | Up to 57,260,001 equity shares |
EPS (in ₹) for FY 23 | 11.74 |
NSDL IPO Share Offer and Subscription Details
| Investor Category | Shares Offered |
|---|---|
QIBs | Not more than 50% of the net offer |
Non-institutional Investors | Not less than 15% of the net offer |
Retail Individual Investors | Not less than 35% of the net offer |
Industry Outlook
The depository market in India grew at a rapid pace in the past three years. Total client accounts grew at 29% CAGR between financial year 2018 to financial year 2023 and is expected to grow at 12% CAGR between financial year 2023 to financial year 2027.
Standalone income of depositories in India is around ₹10.3 billion in financial year 2023 and grew at a CAGR ~20% between financial year 2018 to financial year 2023. It’s expected to grow at a CAGR of 10% to 11% from financial year 2023 to financial year 2027 to reach ₹15 billion to ₹15.5 billion by financial year 2027.
NSDL Company Background
The National Securities Depository is a SEBI-registered market infrastructure institution (MII) offering a wide range of products and services to India's financial and securities markets.
As a depository, it provides a robust framework that enables market participants to participate in India's financial and securities markets. Using innovative and flexible technology systems, NSDL supports investors, brokers and other market participants in the Indian capital markets and aims to ensure the safety and soundness of the Indian securities market by developing settlement solutions that increase efficiency, minimise risk and reduce costs.
Comparison with peers
| Parameter | NSDL | CDSL |
|---|---|---|
Revenue from operations in ₹ crore for FY 23 | 409.169 | 450.60 |
PAT Margin in % for FY 23 | 43.42 | 50.01 |
EBITDA Margin in % for FY 23 | 58.11 | 66.23 |
IPO Registrar and Book Running Lead Managers
Link Intime India Private Ltd is the registrar of the NSDL IPO. The book running lead managers of this IPO are:
- ICICI Securities Limited
- Axis Capital Limited
- HSBC Securities and Capital Markets (India) Private Limited
- IDBI Capital Markets & Securities Limited
- Motilal Oswal Investment Advisors Limited
- SBI Capital Markets Limited
Business Model
NSDL’s core depository services provide it with a steady source of recurring revenue, primarily through annual custody fees that it charges issuers of securities. Along with this, it also charges an annual maintenance fee from depository participants in relation to corporate accounts serviced through its depository platform. It also charges transaction fees to depository participants and issuers of securities for transactions effected through its depository systems.
Company Growth Trajectory
NSDL has an established track record of growth in revenue and profits. Between financial years 2021 and 2023, its revenue from operations grew from ₹467.569 crore to ₹1021.988 crore, and its profit after tax grew from ₹188.565 crore to ₹234.811 crore.
NSDL Profit and Loss
| Parameter | FY 23 | FY 22 | FY 21 |
|---|---|---|---|
Total Income (in ₹ crore) | 1099.814 | 821.292 | 526.124 |
Profit Before Tax (in ₹ crore) | 305.042 | 278.199 | 246.582 |
Profit After Tax (in ₹ crore) | 234.810 | 212.594 | 188.565 |
EBITDA in ₹ crore | 328.250 | 299.308 | 264.462 |
EPS in ₹ | 11.74 | 10.63 | 9.43 |
NSDL Cash Flow Statement
| Parameter | FY 23 | FY 22 | FY 21 |
|---|---|---|---|
Profit Before Tax (in in ₹ crore) | 305.042 | 278.199 | 246.582 |
Net Cash Generated from Operating Activities (in ₹ crore) | 507.939 | 147.653 | 103.537 |
Net Cash Used in Investing Activities (in ₹ crore) | (446.702) | (64.319) | (35.549) |
Net Cash Used in Financing Activities (in ₹ crore) | (20.0) | (20.0) | (16.0) |
Cash and Cash Equivalents at the End of the Year (in ₹ crore) | (185.697) | (144.460) | 81.126 |
How to Check Allotment Status of NSDL IPO?
You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar Link Intime India Private Ltd. To check the status on the BSE website:
- Visit the BSE website
- Click on “Investor Services” and choose “Application Status Check”
- Choose the issue type — Equity or Debt
- Select the Issue Name from the drop-down, which is NSDL in this case
- Enter your application number or PAN number
- Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status
To check status on the website of Link Intime Private Ltd:
- Visit the website of Link Intime Private Ltd
- Choose ‘Public Issues’ from Investor Services dropdown
- Choose the name of the company from ‘Select Company’ dropdown
- Enter any of these - PAN Number, Application Number, DP/Client ID, Account Number / IFSC
- Click on Submit to check the status
NSDL Competitive Strengths
India’s first and leading depository operating a wide range of technology-driven businesses
They are India's premier depository, holding the top position in terms of issuers, active instruments, demat value market share, settlement volume, and assets under custody as of March 31, 2023 (Source: CRISIL Report). Pioneering dematerialisation in the country, they revolutionised the securities landscape and were among the first global depositories to directly implement dematerialisation, bypassing the traditional two-step process (Source: CRISIL Report).
A stable revenue base with a significant proportion of recurring revenue
Their revenue stability is anchored in annual fees and custody fees, offering a consistent income stream less influenced by market cycles compared to transaction charges (Source: CRISIL Report). The core depository services form a foundation for steady recurring revenues, fortifying their business model. Beyond core services, additional recurring revenue is generated through specific offerings.
Large Variety of Asset Classes held in Demat Accounts and Well-diversified Business Verticals
They maintain a robust position in the depository market, boasting a diverse array of asset classes within their demat accounts. These encompass equities (listed and unlisted), preference shares, warrants, funds (mutual funds, REITs, InvITs, and AIFs), as well as various debt instruments (corporate debt, commercial paper, certificates of deposit, pass-through certificates, structured obligations, government securities, sovereign gold bonds, municipal debt, treasury bills, state development loans), and electronic gold receipts. As of March 31, 2023, they held approximately 84.03% and 88.39% of total securities in terms of numbers and values, respectively (Source: CRISIL Report).
Risk Factors
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A shift in investor preferences away from securities may reduce demand for their services, impacting their business.
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A failure to expand service offerings and market reach through continued innovation and development of new products can impact its business.
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A large proportion of the company’s business is transaction-based and reliant on high trading volumes in the securities market.
Key Strategies
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Continue to focus on the growth potential and increase market penetration by leveraging company strengths.
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Continue to invest in and upgrade its IT infrastructure systems for the enhancement of operational efficiency, service quality and operational resilience.
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Increase the market share of its payments bank business.
NSDL Key Financials
Here are the key financials for NSDL:
Particulars (in Rs. million)
Particulars (in Rs. million)
Opening of account will not guarantee allotment of shares in IPO. Investors are requested to do their own due diligence before investing in any IPO.
How To Apply for National Securities Depository Ltd IPO?
Here are the steps to apply for National Securities Depository Ltd IPO:
Step 1: Log in to your Kotak Securities Demat account Log in to your Demat account to access IPO investments. Next, select the current IPO section.
Step 2: Specify IPO details Enter the number of lots and the price you wish to apply for.
Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.
Step 4: Mandate Notification Your UPI app will receive a mandate notification to block funds.
Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.
NSDL IPO FAQs
What is the National Securities Depository Limited IPO?
The National Securities Depository Limited IPO has an issue size of Rs. __ crores. The IPO opens for subscription on xx Month Year and closes on xx Month Year.
Who is the Registrar for National Securities Depository Limited IPO?
Link Intime India Private Limited is the registrar for this IPO.
Where can I read more about National Securities Depository Limited’s business?
You may read more about National Securities Depository Limited and its IPO from the company’s draft red herring prospectus (DRHP) here
