NSDL IPO Subscription & GMP status & Overview

Core Business & Overview

• NSDL, established in August 1996, was India’s first electronic securities depository, founded under the Depositories Act of 1995 to modernize securities settlements.
• As the largest depository in India, it handles approximately 89% of the value of dematerialized assets in the Indian capital market, managing assets worth trillions of rupees across over 2.8 crore demat accounts.
• NSDL operates via a network of Depository Participants (DPs) and provides services to investors, brokers, custodians, and issuer companies, including dematerialization/rematerialization, transfer of securities, consolidated account statements, and e‑voting and corporate‑action facilitation.
• The company comprises its main depository business and two subsidiaries:
  • NSDL Database Management Limited (NDML)
  • NSDL Payments Bank Limited (NPBL)
    These subsidiaries support broader data‑management, payment, and digital services

Strengths

Institutional Leadership & Market Position

• NSDL commands ~89% market share by value of demat assets in India, with fewer accounts but higher average value (~₹1.25 crore per account) compared to competitors like CDSL.
• It serves a large base of issuers (over 64,000) and Depository Participants (over 63,500), far surpassing its peers.

Financial Performance & Recurring Revenue

• NSDL reported revenue growth from ₹1,365.7 crore in FY24 to ₹1,535.2 crore in FY25, a ~12% increase; profit after tax grew 25% to ₹343.1 crore.
• Its earnings metrics—EBITDA, RoE, and RoCE—are strong by industry standards, supported by stable, mostly recurring income sources from transaction and issuer‑charges.

Robust Technology & Regulatory Support

• NSDL has built state-of-the-art IT infrastructure, strong cybersecurity protocols, and a reliable risk-management framework to support large volumes of secure transactions.
• As a regulatory infrastructure institution under SEBI, RBI, IRDAI, and UIDAI jurisdiction, it benefits from regulatory backing and legitimacy.

Diversification of Services

Besides core depository services, NSDL’s subsidiaries offer value-add services like payment banking (via NPBL), database & governance support (via NDML), e‑KYC, PAN issuance, and NPS recordkeeping.

Potential Risks

Revenue Concentration & Business Dependency

• Over 50% of NSDL’s revenues come from core depository services, making it vulnerable to shifts in transaction volumes or demat activity.
• Its IPO structure is an Offer-for-Sale (OFS); no fresh funds will be raised which limits capital for expansion.

Competition & Limited Retail Penetration

• NSDL faces competition from CDSL (which has a larger share of retail demat accounts, ~14.6 crore accounts vs. NSDL’s ~3.9 crore), as well as emerging fintech-based and tokenized securities platforms.
• Its digital onboarding and retail-centric capabilities are less advanced compared to CDSL, potentially limiting growth in the retail segment.

Regulatory & Operational Risks

• NSDL’s operations are heavily regulated; future changes in SEBI, RBI, IRDAI or UIDAI policies could impact its revenue model or compliance costs.
• Cybersecurity threats, technology outages, or reliance on third-party vendors could result in service disruptions, data breaches, or penalties.
• Potential conflicts of interest exist due to overlapping board representation with entities like NSE and overlapping directorships in competing organizations.

Financial Performance Overview (₹ in Crore)

Financial Year	Revenue (₹ Cr)	Profit (₹ Cr)	Total Assets (₹ Cr)
FY 2023	1,021.99	234.81	2,093.47
FY 2024	1,268.24	275.44	2,258.73
FY 2025	1,420.14	343.12	2,984.84

Revenue

• FY 2023: ₹1,021.99 Cr
• FY 2024: ₹1,268.24 Cr
• FY 2025: ₹1,420.14 Cr

 Steady growth each year; revenue increased by 39% over three years, showing expanding operations and service adoption.

Profit

• FY 2023: ₹234.81 Cr
• FY 2024: ₹275.44 Cr
• FY 2025: ₹343.12 Cr

Profit margin improved consistently, suggesting strong cost control and operational efficiency.

Total Assets

• FY 2023: ₹2,093.47 Cr
• FY 2024: ₹2,258.73 Cr
• FY 2025: ₹2,984.84 Cr

Assets surged in FY 2025, indicating better capital deployment and investment base.

Cons of Sri Lotus Developers IPO

1. Regulatory Risk: Highly dependent on SEBI rules and government policy.
2. Limited Market Expansion: Operates in a duopoly (with CDSL), restricting large growth opportunities.
3. Tech Disruption Risk: Vulnerable to cyber threats and digital failures.
4. High Dependency on Capital Market Activity: Lower investor activity directly impacts revenue.
5. Competition from CDSL: Faces stiff competition from a strong peer with a larger retail base.