Unlisted shares of National Securities Depository Limited (NSDL) have seen a sharp rally of nearly 50% in the last two months, climbing from the ₹800–850 range in April to the ₹1,200–1,225 band currently. This surge is being fuelled by increased investor interest and anticipation of its upcoming IPO, expected to be launched in the second quarter of FY25.

IPO Buzz Lifts Sentiment

Dealers in the unlisted equity market confirm that NSDL shares were trading around ₹800–850 in early April 2025, before the stock was frozen for free transfer, similar to what happened with NSE shares. Now, the stock has surged past the ₹1,200 mark, following a new ISIN allocation that has made transfers and trading easier.

As per Sandip Ginodia, CEO of Kolkata-based Altius Investech, “The new ISIN has improved tradability and demand, while IPO approval news has led to a retail frenzy.”

Market observers estimate the IPO price band of NSDL to fall between ₹750 and ₹850, even though the unlisted shares are now trading above ₹1,200. This divergence reflects pre-IPO optimism, but may also indicate a valuation stretch.

NSDL vs CDSL: A Duopoly in Depository Services

NSDL and CDSL form a duopoly in India’s securities depository landscape. While NSDL dominates the institutional segment, CDSL holds an edge among retail investors. According to Hitesh Dharawat of Mumbai-based Dharawat Securities, the recent surge in CDSL's listed stock and continued investor focus on market infrastructure are also driving enthusiasm for NSDL shares.

Despite some overvaluation concerns, long-term investors with a 3–5 year view are finding NSDL attractive due to the steady expansion of India’s financial asset market, which is expected to benefit depositories directly.

Key Shareholders and IPO Structure

The NSDL IPO has been trimmed to 50.15 million equity shares, down from the earlier 57.26 million shares as per its updated DRHP filed with SEBI.

The breakdown of the share offering is as follows:

• IDBI Bank Ltd: 2,22,20,000 equity shares

• National Stock Exchange (NSE): 1,80,00,001 equity shares

• Union Bank of India: 5,01,45,001 equity shares

These entities will be the key selling shareholders in the upcoming public issue.

Financials Show Strong Growth

NSDL has demonstrated robust financial performance in recent years. For the financial year ended March 31, 2025, the company reported:

• Revenue: ₹1,420 crore (12% YoY growth)

• Net Profit: ₹343 crore (24.75% YoY growth)

• EBITDA: ₹375 crore (31.5% YoY growth)

• Operating Margin: 26.41%

These numbers underscore the profitability and operational efficiency of NSDL, making its IPO one of the most anticipated listings this year.

IPO Management and Registrar

The IPO is being managed by a consortium of top investment banks and advisors, including:

• ICICI Securities

• Axis Capital

• HDFC Securities & Capital Market India

• IDBI Capital

• SBI Capital Markets

• Motilal Oswal Investment Advisors

The registrar to the issue is MUFG Intime India.

NSDL: A Market Infrastructure Pioneer

NSDL began operations in 1996, making it one of the oldest and most influential institutions in India’s financial markets. Incorporated as 'NSDL Depository Ltd' in April 2012, the company is registered as a Market Infrastructure Institution (MII) with SEBI.

NSDL pioneered the dematerialisation of securities in India, transitioning the country from physical to digital securities settlement. It adopted direct dematerialisation, skipping the traditional two-step process, thus revolutionising the settlement mechanism in Indian capital markets.

Valuation View

While NSDL’s fundamentals are strong, some experts caution that the current price in the unlisted market may be stretched, especially in comparison to the expected IPO band. The duopoly advantage, strong profitability, and institutional dominance are likely to drive interest, but valuations need to be watched carefully.

Conclusion

With a rich operating history, sound financials, and its role as a critical enabler in Indian capital markets, NSDL’s IPO is being closely watched by retail and institutional investors alike. The 50% rally in unlisted shares signals high enthusiasm, but investors must be mindful of valuation risks. As the IPO nears, detailed scrutiny of the price band, offer structure, and listing momentum will be key.

The Upcoming IPOs in this week and coming weeks are Jainik Power Cables, Sacheerome Limited, Victory Electric Vehicles International, Wagons Learning.

The Current active IPO are Ganga Bath Fittings.

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