National Securities Depository Ltd. (NSDL), India’s largest depository by market share and assets under custody, has received final approval from SEBI for its upcoming IPO. This marks a key milestone for NSDL, a crucial player in India's financial infrastructure.
As a SEBI-registered Market Infrastructure Institution (MII), NSDL pioneered the dematerialisation of securities in 1996, shifting from physical to electronic formats. NSDL continues to innovate with blockchain-based Distributed Ledger Technology (DeLiTe) for debt issuance and covenant monitoring, and is advancing T+1 and T+0 trade settlements, ensuring secure, transparent transactions. NSDL remains dedicated to supporting the evolving needs of India’s financial markets.
IPO Details
The NSDL IPO will feature an offer for sale (OFS) of 57,260,001 shares, leading to stake reductions by IDBI Bank, NSE, SBI, HDFC Bank, and Union Bank of India. According to the Draft Red Herring Prospectus (DRHP), six shareholders will divest a total of 57.3 million shares. IDBI Bank plans to sell 22.2 million shares, while NSE will offload 18 million shares. Union Bank of India aims to sell 5.62 million shares, SBI will sell 4 million shares, and SUUTI intends to divest 3.4 million shares. Additionally, HDFC Bank plans to sell 4 million shares. There is no fresh issue.
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The book running lead managers for the NSDL IPO include 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.
Financial Performance
NSDL's financial performance reflects its strong position in the Indian financial market:
The company maintained steady growth with Revenue from Operations rising to ₹473.06 crore in FY 2023-24, up from ₹409.17 crore in FY 2022-23, reflecting a year-on-year (Y-o-Y) growth of 15.6%. Additionally, Profit Before Tax increased to ₹327.52 crore, compared to ₹271.68 crore in the previous fiscal year, marking a Y-o-Y growth of 20.6%.
In FY 2024, NSDL opened 51.15 lakh new accounts, bringing the total number of demat accounts to 5.27 crore as of March 31, 2024. Active depository accounts saw a net increase of 43 lakh, growing from 3.15 crore at the end of the previous year to 3.58 crore by March 31, 2024.
Leader in Financial Innovation
NSDL continues to drive innovation with solutions like DeLiTe, its blockchain-based platform for streamlining debt issuance and covenant monitoring. It supports SEBI’s push for T+1 settlements, enhancing transaction speed and market efficiency, while also exploring T+0 settlements for even quicker processing.
Rivalry with CDSL
While CDSL, listed in 2017, leads in retail engagement with over 60 million demat accounts, NSDL dominates in assets under custody and provides comprehensive services to institutional clients. This rivalry shapes the competitive landscape of India's financial markets, making NSDL's upcoming IPO a significant development.
Why NSDL’s IPO is a Must-Watch
As NSDL prepares for its IPO, its strong financials, innovative solutions, and dominant market share make it a prime opportunity for investors. With over 5 crore demat accounts and the largest share of assets under custody, NSDL is a key player in India's capital markets.
This IPO offers investors a chance to invest in a company driving growth in digital and blockchain technologies, with consistent revenue growth, expanding client base, and a strong foundation for future success.
Conclusion: A Promising Investment
NSDL’s IPO is an exciting opportunity for those looking to benefit from the growth of India’s financial markets. Its leadership in financial infrastructure, proven track record of innovation, and solid performance make it a compelling investment for both individuals and institutions.
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