The National Securities Depository Limited (NSDL) is reportedly moving forward with its plans for an initial public offering (IPO), with the launch expected in July 2025. The IPO aims to raise approximately $400 million (around ₹3,000 crore).

Key Details of the IPO

• Offer for Sale: The IPO will be entirely an offer for sale (OFS), meaning NSDL will not receive any of the proceeds. Existing shareholders will be selling their shares to the public.
• Reduced Issue Size: NSDL has trimmed the IPO size to 50.15 million shares from the initially planned 57.26 million, according to an addendum to its Draft Red Herring Prospectus (DRHP).

• Stake Sale by Major Shareholders: Several major shareholders are planning to offload their stakes, providing liquidity and an opportunity for new investors. These include:

  • IDBI Bank: Plans to sell 22,220,000 equity shares.
  • National Stock Exchange (NSE): Will offload 18,000,001 equity shares.
  • Union Bank of India: Shall offer 5,01,45,001 shares.
  • Specified Undertaking of the Unit Trust of India (SUUTI): will sell 3.42 million shares.

• Management: The IPO is being managed by a consortium of book running lead managers, including ICICI Securities, Axis Capital, HDFC Securities & Capital Market India, IDBI Capital, SBI Capital Market and Motilal Oswal Investment Advisors. MUFG Intime India is the registrar for the issue.

• Timeline: While NSDL's managing director, Vijay Chandok, has not commented on the specific IPO timeline, the regulatory approval window to launch the IPO ends on July 31, 2025.
• Price Band: The IPO's price band is expected to be between ₹750 and ₹755 per share.

Financial Performance

Recent financial disclosures reveal NSDL's strong performance. For the quarter ended March 31, 2025, the company reported:

• Net profit of ₹83.3 crore
• Revenue of ₹364 crore
• EBITDA of ₹91.2 crore with an EBITDA margin of 25.1%

For the entire financial year 2024-25, NSDL reported:

• Net profit of ₹343 crore
• Revenue of ₹1,420 crore
• EBITDA of ₹375 crore

Market Buzz

NSDL's unlisted shares have seen a significant rally in the pre-IPO market, rising almost 40% in two months to approximately ₹1,200-1,250 apiece, compared to ₹900 in April 2025. This surge is attributed to increased retail interest and a simplified process for unlisted share transfers, which has made transactions more efficient and attractive to investors.

Strategic Significance

NSDL's IPO presents a chance to invest in the core infrastructure of India's capital markets. NSDL holds a dominant position in the dematerialization of securities, managing 100% of foreign portfolio investors' (FPI) securities in dematerialized form. With 64,535 issuers, it services approximately twice as many as its closest competitor, CDSL. NSDL's average demat account holds ₹1.25 crore in assets, which is more than twice CDSL's ₹5 lakh, showcasing its stronghold in institutional and high-net-worth investor segments.

NSDL vs CDSL

While CDSL leads in the number of demat accounts, NSDL tops in terms of assets held under custody.

Reasons for the IPO

The IPO is primarily driven by a SEBI directive requiring institutional investors to reduce their holdings below 15% by October 13, 2025. The offering provides an opportunity for existing investors to comply with this regulatory requirement.

Simplified Unlisted Share Transfer

The transfer process of unlisted shares was simplified in April 2025 with a new ISIN number, which reduced the share transfer process to 1-2 days from 4-6 months, making NSDL available for freely transfer from one demat account to another within a shorter timeframe.