India’s largest depository, National Securities Depository Limited (NSDL), is all set to enter the public markets in July 2025 with an IPO expected in the ₹750–₹800 range. This move will value the company at a whopping ₹15,000–₹16,000 crore.

While the buzz is real due to NSDL’s strong legacy and market infrastructure dominance, investors must dig deeper before diving in.

A) NSDL Business Model: India’s Capital Market Backbone

Founded in 1996, NSDL was India’s first depository and remains the largest, facilitating seamless electronic holding and settlement of securities.

Core Services Include:

• Demat Account Services (via Depository Participants)

• Clearing & Settlement of securities

• Corporate Action Processing

• Pledge/Unpledge Mechanism

• e-Voting & KYC Authentication

• Digital Record-Keeping & Vault Services

Clientele: Exchanges, brokers, custodians, mutual funds, and institutional investors — making NSDL a systemically important financial utility.

B) Revenue Sources of NSDL

NSDL’s business model offers diverse, recurring and market-linked revenue streams:

1. Issuer Charges – For corporate actions & dematerialization/rematerialization

2. Transaction Fees – Volume/value-linked settlement fees

3. Account Maintenance – Paid by DPs and investors

4. e-Gov Services – PAN, Aadhaar & KYC processing (via NSDL e-Gov Infra)

5. Technology Solutions – Software & IT infrastructure

👉 NSDL = Institutional Heavy. CDSL = Retail Heavy.

C) NSDL Financial Performance (FY22–FY25)

1. Revenue CAGR: ~23% over FY22–FY25

2. Margin Pressure: FY22 to FY24 decline due to rising costs, partial recovery in FY25

D) IPO Valuation: High Price, Low Comfort?

With expected pricing at ₹750–₹800, the implied valuation is:

• P/E Ratio: ~44x FY25 EPS (₹17.15)

Comparison:

• CDSL trades at ~65x FY25 EPS

• CDSL MCap: ₹34,800 Cr+, with much stronger retail base

• NSDL IPO Valuation: ₹14,000–₹15,000 Cr (expected)

• Current Unlisted Market Cap: ₹25,500 Cr (UnlistedZone)

Weak Points :

• Lower Retail Penetration: NSDL ~3 Cr accounts vs. CDSL 8.5 Cr+

• Lower Tech Automation = Higher Cost Base

• Stiff IPO Pricing = Limited short-term upside

E) NSDL vs CDSL: The Face-Off

CDSL has the edge in growth, reach, and valuation comfort.

F) Final Verdict: Quality Business, Expensive Entry Point

NSDL offers rock-solid fundamentals, regulatory credibility, and a strong growth history. But the high valuation in the unlisted market leaves little room for making return. 

UnlistedZone Take:

• Fundamentals: ✔️

• Market Infrastructure Leadership: ✔️

• Valuation Comfort: ❌

• Retail Momentum: ❌

    Wait for listing and price correction before investing.

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