NSDL IPO valuation is drawing investor attention as India’s financial markets mature and the number of demat accounts surpasses 15 crore. The spotlight is now on the infrastructure powering this growth. At the centre of it all lie two monopolistic yet competing depositories: CDSL, the retail-facing listed player; and NSDL, the institution-dominated pioneer now eyeing an INR 3,000 crore IPO.
NSDL and CDSL are India’s two key depositories that offer dematerialisation, electronic holding, and transfer of securities. Both are regulated by SEBI and form the backbone of the Indian capital market infrastructure. While their core function is similar, their business models diverge significantly.
NSDL primarily serves institutional clients like mutual funds, FIIs, and large banks, while CDSL has become the go-to platform for retail investors. As a result, CDSL manages over 15 crore demat accounts, far more than NSDL’s ~3.88 crore.
This higher retail penetration gives CDSL more frequent transaction-based revenue and stronger monetisation per account. NSDL, on the other hand, caters to fewer but larger institutional clients who negotiate lower fees. Consequently, CDSL enjoys higher margins, better ROE, and faster revenue growth, while NSDL maintains a stable but lower-margin institutional model. So, despite operating in the same industry, the two players differ significantly in target audience, revenue dynamics, and growth trajectories.
When evaluating the NSDL IPO valuation, it’s worth noting that unlisted shares were trading in the INR 1,035 to 1,275 range in grey markets over the past three months. At these levels, the implied price-to-earnings (P/E) multiple ranges from 64.36x to 79.29x, assuming FY25 PAT of INR 343 crore—surpassing even CDSL’s listed P/E of ~70.6x as of July 2025.
The question then arises:
Is NSDL already overpriced before listing?
Or is CDSL running too hot?
Has NSDL got upside if we consider its fundamentals?
📊 NSDL FY25 Financials: Stability, Cash, and Regulated Growth
Let’s ground the conversation in data:
| Metric | Value |
|---|---|
| Revenue from Operations | 1,420.14 |
| Other Income | 115.04 |
| Total Income | 1,535.18 |
| PAT | 343.12 |
| Net Worth | 1,808.5 |
| Cash & Equivalents | 3,850 |
| Number of Shares | 20 crore (FV INR 2) |
| EPS (INR) | 17.16 |
| ROE | ~17.1% |
| Net Profit Margin | ~24.1% |
Clearly, NSDL is profitable, capital efficient, and debt-free. But let’s not confuse profitability with pricing.
📈 Valuation Landscape: NSDL vs CDSL
| Metric | NSDL (IPO Implied) | CDSL |
|---|---|---|
| PAT (FY25) | 343 | 526 |
| Market Cap | 25,500 (at INR 1,275/share) | 37,164 |
| P/E | 74.3x (implied) | 70.6x |
| P/B | 12.7x (implied) | 21.2x |
| Earnings Yield | 1.35% | 1.45% |
| ROE | 17.1% | 32.6% |
This table shows the NSDL IPO valuation dilemma:
- NSDL has lower margins and ROE, yet is being valued higher per earnings than even CDSL.
- The retail-favoured CDSL has stronger market traction, with >15 crore demat accounts versus NSDL’s ~3.88 crores.
So, is NSDL’s valuation justified?
Let’s explore what happens if grey market expectations reset—as they have before.
Read Also: NSDL Vs. CDSL
⚠️ Grey Market Disillusion: HDB, Tata Tech
Investors in unlisted shares have recently got their fingers burnt (probably hands too!) by overpricing in the private market:
🔻 HDB Financial
- Unlisted Price: INR 1,275
- IPO Price Band: INR 700–740
- Correction: ~40%
- Lock-in: 6 months per SEBI rules
- Result: Immediate 40% paper loss, zero exit flexibility
🔻 Tata Technologies
- Unlisted Peak: INR 1,100
- IPO Price: INR 500
- Fall Post-Listing: From INR 1,314 to INR 706 (~46% drawdown)
These examples show how unlisted market prices tend to reflect hype, not value. When reality hits in the form of IPO pricing, retail investors often face losses—not gains.
Read Also: HDB Financial Unlisted Share Buyers Get Rude Shock: Trapped and Down 40%
🔍 NSDL IPO Valuation: Post-Correction Scenarios
Assuming NSDL shares correct 35% to 50% from their unlisted market highs—as with HDB and Tata Tech—here’s how the numbers change.
📊 NSDL IPO Valuation Sensitivity Table (FY25 PAT = INR 343 Cr)
| Unlisted Price (INR) | Correction | Adjusted Price (INR ) | Market Cap (INR Cr) | P/E (X) | Earnings Yield |
|---|---|---|---|---|---|
| 1,035 | 35% | 672.75 | 14,300 | 41.7 | 2.40% |
| 1,035 | 50% | 517.50 | 11,000 | 32.07 | 3.12% |
| 1,275 | 35% | 828.75 | 18,200 | 53.06 | 1.87% |
| 1,275 | 50% | 637.50 | 14,000 | 40.81 | 2.45% |
As one can see, there is quite a lot of scope for post-listing price reduction and the stock will continue to look expensive or moderately attractive, depending on one’s outlook and way of looking at growth-oriented companies. After all, there is no denying that NSDL has nearly doubled its revenues in the last four years!
📌 Key Insight on NSDL IPO Valuation:
- NSDL (at INR 1,275) and CDSL trade at P/E multiples above 70x—well above global depositories, which average 15–30x due to their utility-like nature. However, India’s unique growth drivers—retail participation, digital adoption, and IPO momentum—justify this valuation premium.
- NSDL IPO fair value range appears around INR 600–700/share, where NSDL trades at P/E of 32–42X, still higher than many infra stocks, but justifiable given its duopoly status.
- Above INR 800 per share, valuation becomes stretched, and earnings yield drops below 2%, suggesting poor risk-adjusted return.
⚖️ Either CDSL Is Overvalued — Or NSDL Has Upside
This leads us to the central paradox:
If NSDL is fairly priced at 42–53× P/E, then CDSL at 70.6× P/E looks expensive.
If CDSL is fairly valued, then NSDL, at 40–50× P/E, has upside potential.
Since both operate in the exact same business, there’s little room for them to trade at vastly different earnings multiples for long.
So, one of these two is mispriced—and investors must choose whom they trust more.
NSDL IPO Valuation: Considerations
🟢NSDL is a great buy if:
- IPO is priced below INR 700/share
- You believe in long-term fintech + institutional growth
- You expect retail onboarding to increase gradually
🟠Priced to perfection if:
- IPO is priced above INR 800–900/share
- You expect subdued IPO activity or low transaction growth
- You are wary of grey market euphoria vs listing reality
🗣️ Final Word: Price the Fundamentals, Not the Hype
CDSL and NSDL are both mission-critical to India’s capital market. But valuation discipline must prevail. Recent IPOs have shown us that grey market signals are far from being sound investment advice. On the contrary, they reflect crowd psychology.
If NSDL is listed at a conservative valuation, it offers long-term compounding potential. But if the IPO launches near unlisted market highs, investors risk paying too high a premium for a utility-like business.
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