NSDL IPO subscribed over 5.03 times on Day 3 so far, GMP rises to 17%. Check reviews, other details

Economic Times

01-08-2025

The initial public offering (IPO) of National Securities Depository Limited (NSDL), India's first and largest depository, attracted strong investor interest, with robust subscription continuing on the third and final day of bidding. The issue was booked 5.03 times overall, indicating solid demand across all investor categories. The IPO is open for subscription from July 30 to August 1. NSDL shares are trading at a 16.75% premium in the grey market over the upper end of the IPO price band at Rs 800.
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NSDL IPO was subscribed 5.03 times across all categories. This surge in subscription demand for the IPO was largely driven by non-institutional investors (NIIs), who booked their allotted quota 11.08 times. Retail investors followed with a 4.17 times subscription, while qualified institutional buyers (QIBs) subscribed 1.96 times, on Day 3 at 10.05 am.
In the grey market, NSDL shares are trading at a premium of 16.75% over the upper end of the IPO price band, which is set at Rs 760–Rs 800 per share. This premium indicates a potential listing gain of around Rs 134, indicating a likely debut price of approximately Rs 934 per share.This public offering is a pure offer-for-sale (OFS), totalling Rs 4,012 crore, by existing shareholders.
ADVERTISEMENT Brokerages have largely recommended a 'Subscribe' rating to the NSDL IPO for long-term investors. Anand Rathi and Canara Bank Securities cite NSDL's near-monopoly scale in the depository ecosystem, healthy financials, wide product coverage, and strategic relevance to India's capital market infrastructure as key positives.Meanwhile, Angel One has issued a 'subscribe for long-term' rating for the offer, stating, 'At the upper price band of Rs 800, NSDL is valued at a post-issue P/E of 47× FY25 earnings, which is lower than listed peer CDSL. Given its strong market position, high entry barriers, and long-term growth tailwinds from India's digital and capital market expansion.'
ADVERTISEMENT Additionally, Bajaj Broking also assigned a 'subscribe for long-term' rating for the NSDL IPO. In its note, it stated that NSDL is engaged as a pioneer in depository services in India and is an icebreaker for the demat process. The company is expanding its horizon with more value-added services and options.
'With dominant market share, a wide service reach, and diversified asset coverage, NSDL is well-positioned for long-term growth, supported by macroeconomic tailwinds and regulatory enablers. However, investors should remain cautious of its dependence on transaction volumes, evolving investor behaviour, and high regulatory and cybersecurity risks,' flagged Saurabh Jain, Equity Head, Research- Fundamentals at SMC Global Securities.
ADVERTISEMENT The NSDL IPO comprises 5.01 crore equity shares, and the subscription window will remain open until Friday, August 1. Investors can bid for a minimum lot of 18 equity shares and in multiples thereof. Shares of the company are proposed to be listed on the BSE, tentatively on August 6.NSDL has set the IPO price band at Rs 760 to Rs 800 per share.
ADVERTISEMENT Established following the enactment of the Depositories Act, 1996, NSDL was the first depository to commence operations in India. It plays a crucial role in the country's financial market infrastructure and offers depository services across multiple asset classes, including equities, debt instruments, mutual funds, REITs, InvITs, AIFs, and more.NSDL boasts a pan-India reach, covering over 99% of PIN codes, and has a global footprint with clients in 186 countries. The company operates on a stable annuity-like revenue model, derived from annual issuer charges and transaction-based fees.For the financial year ended FY25, NSDL reported revenue of Rs 1,420 crore, marking a 12% year-on-year growth, while profit after tax (PAT) rose 25% YoY to Rs 343 crore. The company posted a strong EBITDA margin of 34.71%, highlighting efficient operations.NSDL has also diversified its business through subsidiaries like NSDL Database Management Ltd (NDML) and NSDL Payments Bank Ltd (NPBL), expanding into areas such as e-governance services, regulatory technology platforms, and digital banking.
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On the valuation front, the IPO is priced at a price-to-earnings (P/E) ratio of 46.62x and a price-to-book (P/B) ratio of 7.98x, based on FY25 earnings. In comparison, its listed peer Central Depository Services (India) Ltd (CDSL) trades at a higher P/E of 60.43x and P/B of 18.08x. However, NSDL commands a larger share of demat assets, more extensive institutional coverage, and a broader service infrastructure.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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