National Securities Depository (NSDL), India’s first and largest depository institution, has filed an addendum to its Draft Red Herring Prospectus (DRHP), marking a significant milestone in its journey toward a much-anticipated INR 3,000 crore IPO. This updated filing, submitted on 17 May comes after SEBI’s final observations on 30 September 2024, and sets the stage for the IPO likely to open later this month.
NSDL files addendum not only to update financials but also introduces a series of strategic adjustments, refined risk disclosures, and a reduced offer size — all reflective of the evolving market sentiment and regulatory dynamics.
🔍 Background: NSDL and the Offer for Sale (OFS)
Founded in 1996, NSDL pioneered the dematerialization of securities in India. The institution has since grown into the country’s largest depository by virtually every metric — number of issuers, instruments, custody value, and market share. It serves as a core infrastructure entity of the capital markets, regulated by SEBI under the Market Infrastructure Institutions (MIIs) framework.
NSDL IPO is being floated as an Offer for Sale (OFS). This means no fresh equity will be issued; instead, existing institutional shareholders are divesting their stakes to comply with SEBI’s 15% cap on ownership in MIIs. Key shareholders offloading shares include:
- IDBI Bank (holding 26%)
- National Stock Exchange (NSE) (24%)
- State Bank of India (SBI)
- HDFC Bank
- Union Bank of India
- SUUTI (Specified Undertaking of the UTI)
Of note, Union Bank has slashed its contribution dramatically from 5.625 million to 0.5 million shares, while HDFC Bank halved its allotment, signaling a calibrated approach to monetization.
📉 Revised Offer Size
| Aspect | DRHP (2023) | Addendum (2025) | Change |
|---|---|---|---|
| Total Shares Offered | 5.73 crore | 5.02 crore | ↓ 70.11 lakh |
| Estimated IPO Size (INR Cr) | 3,500+ | ~3,000 | ↓ ~500 |
The offer size has been reduced by over 12%, possibly reflecting market conditions and valuation considerations. This revision also helps make the IPO more digestible for broader investor classes.
📊 Financial Highlights: Solid Performance and Recurring Revenue Backbone
NSDL’s financial trajectory underscores stability, scale, and profitability — hallmarks that will likely resonate with investors in an MII play. Here’s a breakdown of key metrics:
📈 Revenue & Profit Growth
| Metric | FY22 | FY23 | FY24 | 9M FY25 |
|---|---|---|---|---|
| Revenue from Operations | 761.1 | 1,022.0 | 1,268.2 | 1,056.5 |
| Profit After Tax (PAT) | 212.6 | 234.8 | 275.4 | 259.8 |
| EBITDA | 299.5 | 328.6 | 381.1 | 370.8 |
| Earnings Per Share (INR) | 10.63 | 11.74 | 13.77 | 12.99 |
| ROE (%) | 17.55% | 16.43% | 16.36% | 13.52% |
Depository services continue to contribute over 40% of operational revenue, reinforcing NSDL’s leadership in this space.
📌 Recurring Revenue Stability
NSDL draws ~19-20% of revenues from recurring sources like annual custody fees and maintenance charges — which are relatively immune to market cycles. For 9M FY25:
- Recurring Revenue: INR 203.3 crore
- Transactional Revenue: INR 853.2 crore
- Depository Revenue: INR 452.1 crore
🌐 Business Scale & Reach
As of 31 December 2024, NSDL boasted:
- 3.88 crore active demat accounts
- 64,535 registered issuers (vs 46,015 as of March 2024)
- INR 484 lakh crore in demat custody value
- 289 Depository Participants (DPs) and 63,542 DP service centers
- Presence in 99.32% of India’s pin codes and 218 countries
Notably, NSDL has a dominant 96.93% market share in the custody of debt securities by value and 85.57% of NRI assets under custody.
🔐 Strengthened Cybersecurity & Infrastructure
Recognizing its systemic importance, NSDL has prioritized digital resilience with major upgrades in FY24:
- Round-the-clock Security Operations Centre (SOC)
- MITRE ATT&CK® framework adoption
- Extended Detection and Response (EDR) systems
- Airgap clean room setups and enhanced encryption for data at rest
- Full-stack observability and APM tools
Between January 2024 to February 2025, the firm incurred INR 48.70 crore in repairs and IT maintenance alone, underscoring its commitment to cyber hygiene.
💡 Tech-Driven Innovation
NSDL has leveraged technology for capital market efficiency:
- Blockchain-based covenant monitoring for debentures
- IDeAS platform for investor services
- e-Voting solutions and consolidated account statements
- UPI block in secondary markets and T+0 settlement pilot
Additionally, NSDL’s subsidiaries — NDML and NPBL — extend its footprint into e-governance, KYC, digital banking, and payments.
🛑 Disclosure of Failed Product Launch
In a rare gesture of transparency, NSDL disclosed the discontinuation of NDML’s “Easy FD” digital platform due to lack of traction — a candid reminder of innovation risks even in a tightly regulated financial environment.
📅 NSDL IPO: Launch Imminent
With SEBI approval in hand and the DRHP addendum filed, NSDL is now poised to file its Red Herring Prospectus (RHP). NSDL IPO is expected to open in late May or Early June 2025, subject to final procedural clearances.
Investors and analysts alike will be watching closely for:
- Price band and valuation multiples
- Lot sizes and possible retail discount
- Institutional and anchor investor interest
🧾 Significance of NSDL IPO
NSDL IPO isn’t just another listing — it’s the public debut of a national financial utility. With over INR 484 lakh crore in custody and foundational links to equity, debt, and mutual fund markets, NSDL plays a pivotal role in India’s capital markets.
Its listing is expected to:
- Broaden market participation
- Improve transparency and governance
- Reduce shareholding concentration per SEBI norms
In Summary
NSDL addendum filing provides a clear, confident, and compliant roadmap toward listing — reflecting financial strength, operational scale, and digital preparedness. For investors looking at stable, regulated fintech infrastructure with a monopoly-like market presence, NSDL’s IPO could be among the most strategic offerings of 2025.
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