National Securities Depository Limited (NSDL) recently filed a petition called DRHP with market regulator SEBI, requesting authorization to let its investors sell their ownership stake in the business to the general public via an initial public offering (IPO). NSDL intends to offer 57,260,001 equity shares through this IPO. Following SEBI clearance, the share allotment, listing date, price band, and lot size will be determined.
The book-running lead managers for this IPO are expected to be ICICI Securities Limited, Axis Capital Limited, HSBC Securities and Capital Markets (India) Private Limited, IDBI Capital Markets & Securities Limited, Motilal Oswal Investment Advisors Limited, and SBI Capital Markets Limited. Link Intime India Private Limited serves as the registrar. The IPO offer contains a mechanism for eligible employees to subscribe, referred to as the “employee reservation portion.” The corporation, in consultation with the
selling shareholders and the BRLMs, may give a discounted price to qualifying employees who engage in the employee reservation component, known as the “employee discount.”
Objectives of NSDL IPO:
To sell the ownership stake of existing investors, which would be as follow:
- IDBI Bank Limited: 2.2 crore shares
- National Stock Exchange of India Limited: 1.8 crore shares
- Union Bank of India: 56.25 lakh shares
- State Bank of India: 40 lakh shares
- HDFC Bank Limited (SS): 40 lakh shares
- The administrator of the Specified Undertaking of the Unit Trust of India: 34.15 lakh shares
About NSDL
NSDL is a SEBI-registered market infrastructure institution (MII) that provides a diverse range of products and services for the Indian financial and securities market. NSDL is the largest depository in India in terms of the number of issuers, active instruments, market share in demat value of settlement volume, and the value of assets held under custody.
After the introduction of the Depositories Act in 1996, NSDL became a leader in dematerializing securities in India. As of March 31, 2023, NSDL reported a substantial number of active demat accounts, with over 31.46 million held by 283 registered depository participants. These accounts were spread across more than 99% of pin codes in India and in 186 countries globally. Additionally, NSDL reported a total of 40,987 issuers registered with them, with a net growth of 3,509 issuers during FY23.
Peer Comparison :
- Central Depository Services (India) Limited (CDSL)
NSDL Financial Status
| Particulars (in Rs. Crores) | FY23 | FY22 | FY21 |
|---|---|---|---|
| Revenue | 10,219.88 | 7,611.09 | 4,675.69 |
| EBITDA | 7,899.35 | 5,416.86 | 2,795.42 |
| PAT | 2,348.10 | 2,125.94 | 1,885.65 |
| Total Assets | 20,934.75 | 16,927.47 | 1559.29 |
| Share Capital | – | – | – |
| Total Borrowings | 6,646.14 | 4,811.28 | 4,847.11 |
| Net cash generated from / (used in) operating activities | 5,079.39 | 1,476.53 | 1,035.37 |
| Net cash from / (used in) investing activities | -4,467.02 | -643.19 | -355.49 |
| Net cash flow from / (used in) financing activities | -200.00 | -200.00 | -160 |
| Net increase (decrease) in cash and cash equivalents | 412.37 | 633.34 | 519.88 |
NSDL IPO Key Points
Strengths :
- NSDL is India’s first-ever depository that operates a diverse range of tech-driven businesses.
- The company has stable revenue growth Y-O-Y, with a large contribution coming from recurring revenue sources.
- The company possesses strong risk management frameworks, IT infrastructure, and measures for cyber-security to ensure the overall safety and integrity of the depository system.
- The company is a pioneer in depository services in India and has a global presence.
- The competition is limited with a high barrier to entry, with only CDSL being its pe
Risks :
- NSDL is largely reliant on higher trading volume. Any change in that due to market-related or external factors can have an impact on its bottom line.
- NSDL competes closely with CDSL in a tightly regulated space.
- The company has to follow strict regulatory rules. Any failure can lead to regulatory proceedings and legal actions by authorities such as SEBI.
- Cash flow from investing and financing activities has been negative in recent years. Cash and cash equivalents have also decreased in the last two years.
- NSDL also has a payments bank business, which contains higher operating expenses which result in a high cost-to-income ratio.
NSDL IPO FAQs :
Q1. What is the price band of the NSDL IPO?
Ans. The Price band of the NSDL IPO is yet to be announced.
Q2. When does the NSDL IPO issue open and close?
Ans. The NSDL IPO opens and close dates are yet to be announced.
Q3. What is the allotment date of NSDL IPO?
Ans. The allotment date of NSDL IPO is yet to be announced.
Q4. Who are the book runners for NSDL IPO?
Ans. The book runners of NSDL IPO are yet to be announced.
Q5. What is the minimum lot size required for the NSDL IPO?
Ans. The minimum lot size of this NSDL IPO is yet to be announced.
Q6. What is the size of NSDL IPO?
Ans. The NSDL IPO size is yet to be announced.
Q7. What is the NSDL IPO listing date?
Ans. The NSDL IPO listing date is yet to be announced.
Q8. What is the objective of NSDL IPO?
Ans. The objective of NSDL IPO are:
- IDBI Bank Limited: 2.2 crore shares
- National Stock Exchange of India Limited: 1.8 crore shares
- Union Bank of India: 56.25 lakh shares
- State Bank of India: 40 lakh shares
- HDFC Bank Limited (SS): 40 lakh shares
- The administrator of the Specified Undertaking of the Unit Trust of India: 34.15 lakh shares
