CDSL: The Multibagger Benchmark
CDSL debuted at Rs 125 per share in 2017. In the years that followed, the stock surged past Rs 1,500, driven by a wave of post-COVID retail participation and growing financial market inclusion. With over 15 crore demat accounts, CDSL became synonymous with India’s retail investing boom, growing alongside brokerages and fintech platforms that connected millions to the stock market.
However, much of that retail-driven momentum has tapered off. As demat account growth normalises, market participants are now shifting focus from topline account numbers to profitability, institutional coverage, and infrastructure depth.
That’s precisely where NSDL comes in.
NSDL: Older, Bigger, and Built for Scale
Incorporated in 1996, NSDL was the pioneer in India’s dematerialised securities space. It may not boast CDSL’s headline-grabbing retail metrics, but across most operational and financial indicators, NSDL commands the lead.
As of FY25:
– Assets under custody: NSDL holds securities worth over Rs 464 lakh crore — nearly 7x more than CDSL.
– Institutional strength: It manages over Rs 10.5 lakh non-retail investor accounts, compared to CDSL’s Rs ~2.2 lakh.
Corporate linkage: Over 40,000 companies are linked with NSDL, double that of CDSL.
Revenue efficiency: NSDL earns almost 3x more revenue per investor than its peer, according to analyst estimates.
Despite these advantages, NSDL’s IPO is seeking a valuation of around Rs 16,000 crore, just half of CDSL’s Rs 32,00,000 crore market cap. For many market watchers, this creates an intriguing setup — an industry leader being offered at a relative discount.
What Makes the IPO Attractive?
Investors have several reasons to take notice:
Stable, recurring revenues: NSDL’s business model benefits from predictable fee structures, including custodial charges and transaction-based income.
Strong institutional base: While CDSL rode the retail wave, NSDL is deeply embedded in the institutional ecosystem — including foreign portfolio investors, mutual funds, insurance firms, and government institutions.
Strategic infrastructure: NSDL plays a key role in India’s financial infrastructure, powering systems like PAN processing, e-NPS, and various regulatory platforms — a layer of moat that extends beyond just demat operations.
Saurabh Jain, Equity Head at SMC Global Securities, sums it up: “NSDL presents a compelling IPO opportunity, underpinned by its market leadership, robust technology-driven infrastructure, and stable recurring revenue model. With dominant market share and diversified asset coverage, it’s well-positioned for long-term growth.”
Should You Expect Another 12x Rally?
A word of caution: NSDL is not CDSL 2.0 – it’s a structurally different business.
CDSL’s astronomical gains were powered by an unprecedented rise in retail participation and fintech-led account openings during a unique market cycle. NSDL, in contrast, offers a steadier, infrastructure-oriented play with a more mature growth trajectory.
However, for long-term investors looking to own a slice of India’s capital market infrastructure — much like owning exchanges or clearing corporations — NSDL could be an attractive portfolio addition.
Valuation Watch
At the upper end of the IPO price band (Rs 800), NSDL is valued at approximately 47x FY25 earnings. This is lower than CDSL’s current P/E of 70+, and still reasonable for a business with limited competition, strong cash flows, and macroeconomic tailwinds.
The IPO, which is a pure offer-for-sale (OFS), has already seen strong institutional interest, with anchor investors subscribing to Rs 1,201 crore worth of shares before the public issue opened. Early grey market indications also suggest a premium of around Rs 130–140, pointing to a potential 15–18% listing pop.
NSDL may not deliver the same fireworks as CDSL, but it offers investors a chance to be part of India’s growing capital market infrastructure. If you’re looking for long-term stability over quick gains, this IPO could be worth a closer look.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)