NSDL IPO: GMP falls 20% despite stock market recovery, positive analyst views

NSDL IPO: National Securities Depository (NSDL), which is set to launch to its initial public offering (IPO) tomorrow, that is on Wednesday, July 30, is losing witnessing some volatility in the unofficial market. The grey market premium (GMP) for NSDL IPO has crashed more than 20 per cent since the announcement of the issue, despite a recovery in the markets on Tuesday.

On Tuesday, GMP for NSDL shares stood at Rs 130-135 apeice, suggesting a listing pop of Rs 16-17 per cent for the investors. However, the premium for the counter in the unofficial market stood around to Rs 165 when the price band for the issue was around. The sell-off in the broader market led to this more than 20 per cent correction in the GMP of NSDL IPO.

Analysts are optimistic about the NSDL IPO, pointing out that it is reasonably priced in comparison to its competitor, CDSL. They believe NSDL stands to gain from the increasing equity culture in India, along with a suite of new products in the pipeline. This positive sentiment is likely to attract substantial interest from various investor categories.

NSDL’s forward strategy of diversifying into adjacent domains through its subsidiaries—NPBL (payments bank), NDML (e-governance and KYC), and insurance repositories—adds new levers of monetization. The NSDL Jiffy platform, Cash Management Services, and expansion in regtech and blockchain-backed infrastructure further strengthen its ecosystem approach, said SMIFS.

"These initiatives are likely to not only deepen customer stickiness but also elevate revenue intensity per user. We recommend to subscribe to the issue due to NSDL’s dominant market share in demat value, strong institutional franchise, regulatory tailwinds, diversified fintech initiatives, and high-quality revenue visibility," it added.

NSDL is set to raise Rs 4,011.60 crore through its IPO, which is an offer-for-sale of up to 5,01,45,001 equity shares. The shares are priced between Rs 760 and Rs 800 each. This IPO sees major shareholders like IDBI Bank, National Stock Exchange of India (NSE), SBI, HDFC Bank and others reducing their stakes. NSDL maintains an 86.8 per cent market share by demat value as of March 2025.

NSDL's technological infrastructure, focused on innovation and efficiency, underpins its leadership in the market. The company has continually invested in technology, enhancing its depository services and developing value-added services like e-voting, eAGM platforms, and blockchain-based monitoring systems, said Ventura Securities.

Through its subsidiaries, NDML and NPBL, NSDL also offers ITenabled solutions, including digital banking, payments, and KYC services, which complement its depository operations. We recommend to 'subscribe' this IPO and hold the stock after listing for long term gains" it added.

NSDL's financial performance has shown strong growth, with revenue, EBITDA, and PAT increasing at compounded annual growth rates (CAGRs) of 17.9 per cent, 21.2 per cent, and 20.9 per cent respectively over FY23–FY25. The company's robust operating leverage is reflected in these figures. 

NSDL is valued at a post-issue P/E of 47 times FY25 earnings, which is lower than listed peer CDSL, said Angel One. "Given its strong market position, high entry barriers, and long-term growth tailwinds from India’s digital and capital market expansion, we assign a ‘Subscribe’ rating for long-term investors," it said.

NSDL faces key risks including regulatory pressure on transaction pricing, intense competition from CDSL in the retail segment, dependence on market activity for revenue stability, and limited growth capital from the IPO as it is a pure offer for sale, Angel One added.

NSDL has reserved 85,000 shares for eligible employees, who will benefit from a Rs 76 discount per share. The net offer is divided such that 50 per cent is reserved for Qualified Institutional Buyers (QIBs), 15 per cent for Non-Institutional Investors (NIIs), and 35 per cent for retail investors. Lead managers for the issue include ICICI Securities, Axis Capital, and SBI Capital Markets. The company's listing is anticipated on the BSE and NSE on August 6, 2025.