India’s primary market is currently witnessing a rush of IPOs, including some from major institutions. Among them, the highly anticipated IPO of NSDL (National Securities Depository Limited) has stirred both interest and concern across investor circles. While the IPO launch was expected to create enthusiasm, it has delivered a harsh blow to those holding NSDL shares in the unlisted market.

Just like what happened during the IPO of HDB Financial Services, where unlisted shares were trading at around ₹1,200–1,300 and were finally offered in the IPO at a steep discount of ₹700–₹750, a similar pattern has played out for NSDL. NSDL’s shares, which were trading at ₹1,025 in the unlisted market, are now offered in the IPO at a price band of ₹768–₹800 — a clear 22% drop from recent unlisted valuations.

However, the shock goes even deeper.

In June, NSDL’s unlisted shares had touched highs of ₹1,275. From that peak to the IPO price band, the effective correction stands at 37–38%, mirroring the fall witnessed by HDB Finance unlisted investors. The trend once again brings to light the inherent risks of investing in the unregulated unlisted share market.

Many investors, lured by the premium narratives and potential profits, ended up buying high only to face steep markdowns once the IPO terms were made public. The fall in NSDL’s valuation also led to pressure on IDBI Bank’s share price, which dipped around 3.5% recently. IDBI is one of the key promoters of NSDL, and the markdown directly affects its expected IPO-related gains.

This entire episode offers a cautionary lesson — retail investors should approach the unlisted market with extreme caution. While multiple platforms and influencers promote unlisted stocks, the reality often differs, and retail participants are usually the ones who face the consequences.

Now shifting to the NSDL vs CDSL business-level comparison:

NSDL and CDSL are India’s two depositories facilitating the holding and transfer of securities in electronic format. Here's how the two stack up:

Establishment:

NSDL was established in 1996. CDSL came into existence three years later in 1999.

Stock Exchange Association:

NSDL is associated with NSE, while CDSL is linked with BSE. Due to this, NSDL cannot be listed on NSE and is listing on BSE instead. Similarly, CDSL is listed on NSE.

Target Market Segment:

NSDL primarily serves institutional investors and banks. On the other hand, CDSL has a major presence in the retail segment. This is evident in the demat accounts distribution.

Demat Accounts Data:

NSDL has around 4 crore demat accounts.

CDSL has over 14–15 crore demat accounts — a clear lead in retail participation.

Depository Linkage with Brokers:

Most discount brokers like Zerodha, Upstox, Angel One, and Groww use CDSL as their depository.

Full-service brokers and banks like ICICI Direct, HDFC Securities, Kotak Securities, Motilal Oswal, and Sharekhan are linked to NSDL. Axis Direct uses both NSDL and CDSL.

Asset Per Account:

NSDL: ₹1.5 crore average asset per demat account.

CDSL: Around ₹5 lakh average asset per account.

Financials (Approximate Figures):

Profit After Tax (PAT):

NSDL – ₹275 crore

CDSL – ₹420 crore

Net Worth:

NSDL – ₹1,700 crore

CDSL – ₹1,500 crore

Revenue:

NSDL leads in revenue generation due to institutional clients.

CDSL, however, has a stronger profit base despite lower revenue.

Valuations:

NSDL is being offered in the IPO at a P/E ratio of around 44–47x.

CDSL trades at a P/E of around 58–60x, reflecting its premium due to strong retail presence and profitability.

EPS:

NSDL’s EPS stands around ₹17. CDSL has a slightly higher EPS.

Market Capitalization:

NSDL’s estimated post-IPO market cap is expected to be around ₹14,000 to ₹16,000 crore.

CDSL, currently listed, has a market cap in the range of ₹33,000 crore, depending on market fluctuations.

Promoter Holdings:

NSDL’s promoters include NSE, IDBI Bank, and UTI.

CDSL’s promoters are BSE, SBI, and HDFC Bank.

Key Focus Areas:

NSDL: Focuses more on institutions, hence fewer clients but higher asset values.

CDSL: Dominates retail participation, with higher demat account numbers and wider market outreach.

Conclusion:

The NSDL IPO, while fundamentally strong, has highlighted the perils of speculative investing in unlisted markets. Investors should assess the valuation, business model, and long-term growth visibility rather than chasing speculative returns. Furthermore, the NSDL vs CDSL comparison shows how both depositories cater to different market segments — with NSDL focusing on institutions and CDSL leading the retail domain.

This IPO also reminds investors that the most “hyped” deals don’t always turn out favorably — especially when bought in the unlisted space. Careful due diligence and an understanding of risk is essential in all market segments.

Disclaimer:This article is intended for informational and educational purposes only and does not constitute financial advice or a recommendation to invest in any securities, IPOs, or unlisted shares. Readers are advised to do their own research or consult with a qualified financial advisor before making any investment decisions. The author and publisher are not liable for any financial losses or damages arising from reliance on the information provided herein.