NSDL IPO likely to come in July to raise ₹3400 crore: 10 key things you should know

The National Securities Depository Limited (NSDL), one of India’s leading depositories, is preparing for a major public offering. The company, known for its critical role in the Indian securities market, has secured a crucial extension from the capital markets regulator, SEBI, to launch its ₹3400 crore IPO by the end of July 2025.

NSDL’s services, ranging from account maintenance to facilitating securities lending, play a vital role in the stability of the Indian securities market. It holds securities in electronic form, thereby ensuring the smooth transfer and settlement of financial assets.

The IPO will provide a valuable opportunity for investors to partake in a business that underpins the country's financial ecosystem.

IPO size and stake sale breakdown

The IPO, slated to raise ₹3400 crore, will be an offer for sale (OFS), meaning no new shares will be issued. Instead, existing shareholders will sell their stakes in the company. The total offer size is 50.15 million shares, reduced from the original 57.26 million shares as per the updated Draft Red Herring Prospectus (DRHP). The IPO is expected to open in July 2025, with eligible employees being given a reservation portion and potential discounts on the offer price.

Key shareholders offloading their stakes

This IPO marks a crucial moment for several stakeholders, as they are required to lower their holdings due to SEBI regulations mandating a reduction. Key shareholders including IDBI Bank (26.1%), the National Stock Exchange (24%), and others such as SBI, HDFC, and Union Bank are likely to offload their stakes.

Strong financial performance underpins the IPO

NSDL has consistently shown growth in its financials, with a significant increase in revenue year-on-year. In FY25, its revenue from operations reached ₹1,535 crore, up from ₹1,365 crore in FY24. NSDL’s consolidated net profit stood at ₹343 crore, up 24.57% from ₹275 crore in FY24.

NSDL’s role in financial infrastructure

Founded in 1996, NSDL has been instrumental in transforming India’s securities landscape. It pioneered the dematerialisation of securities and continues to provide essential services like account maintenance, e-voting, corporate action processing, and facilitating securities lending. These services play a critical role in maintaining the smooth operation of India’s financial markets. As of February 2025, NSDL maintains more than 3.91 crore active demat accounts, which is a strong testament to its widespread adoption.

NSDL payments bank (NPBL) as a key growth driver

A significant part of NSDL's financial success stems from its subsidiary, NSDL Payments Bank (NPBL), which offers a variety of banking services like remittance, prepaid cards, and digital banking solutions. NPBL plays a critical role in NSDL’s growth, especially in the financial inclusion space, with ₹5,934 crore processed via prepaid cards during the nine months ended December 31, 2024. NPBL's expanding customer base and its standing as India's second-largest provider of micro-ATMs, with over 3 lakh devices deployed, adds another layer of revenue stream for the company.

Regulatory scrutiny and historical challenges

NSDL has faced regulatory challenges in the past, notably the Karvy Stock Broking case, which brought it under scrutiny for its role in the misuse of client securities. While the case is still under review, the company has taken corrective measures to strengthen its operations. This history of regulatory attention is a factor that investors should consider when evaluating the risks associated with the IPO.

Technological innovation at the forefront

NSDL has been a pioneer in technology, enhancing operational resilience through technological advancements, such as Distributed Ledger Technology (DLT) for monitoring corporate bonds, API-based platforms for secure data exchange, and Big Data tools like Hadoop for efficient data processing. Additionally, initiatives like the TRADeS system and cybersecurity measures, including a 24/7 Security Operations Center (SOC), further ensure client protection and secure data transmission.

Employee reservation and discount

The IPO includes a reservation for eligible employees, allowing them to participate in the offering at a discounted price. This is a common practice among companies looking to reward their employees and align them with the company’s long-term goals.

NSDL market share

NSDL holds a commanding lead over CDSL in terms of assets under custody and issuers. With more than 64,000 issuers, NSDL is the dominant player in high-value securities. While CDSL leads in terms of demat accounts (14.65 crore vs. NSDL’s 3.88 crore), the difference in asset value per account of ₹1.25 crore per account, compared with CDSL’s ₹5 lakh, demonstrates NSDL’s more lucrative investor base.