Stocks spiraling: NSDL share value skyrockets 3% post-listing at a 10% premium, while CDSL drops 2% - Uncover the reasons behind this disparity.
The National Securities Depository Limited (NSDL) has made a strong listing debut on August 6, 2025, marking its entry into the Indian stock market. The company's shares opened at ₹880, a 10% premium over the IPO price of ₹800, and rose further by over 3% shortly after the market opened. This robust initial investor demand and sentiment reflect the attractiveness of the IPO.
The NSDL, a Market Infrastructure Institution (MII) that provides a digital framework for India's financial markets, is valued at a price-to-earnings (P/E) ratio around 47x FY25 earnings, which is lower than its main competitor CDSL’s 61x. This relatively more attractive valuation in the IPO market context is supported by expert opinions suggesting the IPO was attractively priced.
The successful subscription, around 41x times overall, and a fairly high grey market premium indicate significant market interest ahead of listing. The IPO was primarily an offer for sale, with NSE, SBI, HDFC Bank, and IDBI Bank being the prominent stakeholders selling shares.
The NSDL offers seamless transactions of securities via Demat accounts, including equities, mutual funds, debt instruments, REITs, InvITs, AIFs, and sovereign gold bond transactions. The company, which manages 39.45 million active Demat accounts via 294 depository participants, with account holders spanning 99.34% of Indian pincodes, is well-positioned to benefit from expanding dematerialization and digitization trends.
From a growth perspective, NSDL's revenue has grown at an 18% Compound Annual Growth Rate (CAGR) over FY23–25, alongside a healthy operating margin of around 26.4% and a net profit of ₹343 crore in FY25. This strong financial performance supports the company's growth tailwinds.
However, some caution is warranted due to the rich valuation at ~47x EPS, which could limit immediate upside unless NSDL accelerates earnings growth materially. Potential selling pressure from large shareholders complying with regulatory caps and the impact of weak results from its rival CDSL are other factors that investors should consider.
Despite these headwinds, experts view NSDL as a high-quality, well-backed IPO with sound fundamentals and growth tailwinds. It could be a valuable portfolio addition for investors with a medium- to long-term horizon, provided they monitor potential supply-side pressures and market sentiment fluctuations post-listing.
Analysts at Geojit, for instance, have a favorable rating for NSDL due to its dominant share in the Automated Underwriting Council (AUC), rapid growth in financials, stable revenue stream, healthy return ratios, and focus on digital infrastructure expansions. Geojit values NSDL at a P/E of 46.6x for FY25 earnings and a market cap of Rs 1,60,000 million.
With a presence in 194 countries, the NSDL has established itself as a global player in the securities depository space. As it navigates the challenges and opportunities in the post-listing phase, investors will be watching closely to see how the company continues to grow and deliver value.
[1] Indian Express
[2] Business Standard
[3] Financial Express
[4] Moneycontrol
[5] Economic Times
- The initial investor demand and sentiment for NSDL's IPO reflect its attractiveness in the banking and finance sector.
- Investors looking to invest in India's stock market should consider NSDL's IPO, given its stable revenue stream and growth tailwinds in trading and investment exchange.
- Despite the rich valuation, NSDL is viewed as a high-quality IPO with sound Defi fundamentals, making it a potential portfolio addition for investors with a medium- to long-term horizon.
- The successful listing of NSDL on the Indian stock market on August 6, 2025, signifies its entry into the market for business expansion and growth.
- With a presence in 194 countries and a strong focus on digital infrastructure, NSDL aims to navigate challenges, seize opportunities, and maintain its position as a global player in the securities depository space.
