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Business News/ Markets / Ipo/  NSDL IPO: How does NSDL compete with CDSL? Here’s a comparison between the two depositories
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NSDL IPO: How does NSDL compete with CDSL? Here’s a comparison between the two depositories

NSDL directly competes with the only other listed depository Central Depository Services (India) Ltd (CDSL) which boasts a market capitalisation of around ₹12,540 crore as on July 11.

NSDL and CDSL are the only two depositories operating in India. Premium
NSDL and CDSL are the only two depositories operating in India.

National Securities Depository Limited (NSDL), the largest depository in India, is set to launch its public issue and has filed preliminary IPO papers for it with the capital markets regulator Securities & Exchange Board of India (SEBI).

The Draft Red Herring Prospectus (DRHP) mentions that the NSDL IPO will be a total offer for sale (OFS) of up to 57,260,001 shares and the National Stock Exchange of India Ltd, IDBI Bank, State Bank of India, HDFC Bank, Union Bank of India and the Administrator of the Specified Undertaking of the Unit Trust of India will offload their stake in the company through OFS.

As per reports, NSDL IPO size is expected to be around 3,000 crore, which will value the company at more than 10,000 crore.

NSDL directly competes with the only other listed depository Central Depository Services (India) Ltd (CDSL) which boasts a market capitalisation of around 12,540 crore as on July 11.

Also Read: NSDL IPO: IDBI Bank, NSE, HDFC Bank, SBI, among major shareholders in the depository; take a look

NSDL and CDSL are the only two depositories operating in India. NSDL competes with CDSL on parameters such as the number of depository participants registered, the number of instruments processed, and the suite of innovative products introduced to the market. 

Here’s a comparison between the two depositories - NSDL and CDSL:

Market Share

NSDL had 3.15 crore active demat accounts, while CDSL had more than 8.30 crore active demat accounts as of March 31, 2023.

Meanwhile, the number of companies having their securities in demat form on NSDL was 40,987 in FY23 as compared to 20,323 companies on CDSL. 

NSDL has a greater number of unlisted companies registered with it as compared to CDSL. The number of unlisted companies at NSDL grew at a CAGR 23% between FY18 to FY23.

In FY23, Demat custody value for NSDL was 302.19 lakh crore as compared to 39.71 lakh crore for CDSL.

As on March 31, 2023, NSDL serviced 99.99% of the value of equity, debt and other securities held by foreign portfolio investors in dematerialized form in India.

Also Read: NSDL files Draft Red Herring Prospectus with SEBI, plans IPO

Financials

The depositories derive their business mainly from activities in primary and secondary capital markets. Revenue of depositories majorly constitutes transactional charges, custodial charges and annual charges.

In FY23, NSDL reported a total revenue was 1,099.81 crore, registering a growth of nearly 34% from 821.29 crore in FY22. Its net profit in FY23 rose 11% to 234.81 crore from 212.59 crore in FY22.

CDSL's revenue in FY23 was at 620.94 crore, while its net profit was higher than NSDL at 275.96 crore during FY23.

However, the operational performance of CDSL was better than that of NDSL during FY23. While NDSL’s operating profit was 255 crore and margin was 25%, CDSL’s operating profit was 319 crore with margin of 57.5% during the same year.

Value

The face value of NSDL shares is 2 apiece, while that of CDSL is 10 apiece. The diluted EPS of NSDL comes at 11.74 as compared to CDSL’s 26.41. The shares of CDSL trade at a P/E of 45.44x.

NSDL IPO dates and other details are not announced yet. The company may offer a discount may to the eligible employees bidding in the employee reservation portion.

NSDL shares are proposed to be listed on BSE.

ICICI Securities, Axis Capital, HSBC Securities and Capital Markets (India), IDBI Capital Markets and Securities Ltd, Motilal Oswal Investment Advisors Ltd, and SBI Capital Markets Ltd are the book-running lead managers to the issue, while Link Intime India Private Limited is the IPO registrar.

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Published: 11 Jul 2023, 04:35 PM IST
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