NSDL shares resume climb; analysts advise profit booking amid volatility

Shares of National Securities Depository Ltd (NSDL) extended their gains after a brief one-day pause in Tuesday's trade. The stock surged 6.28 per cent to hit a day high of Rs 1,352.95. Last checked, it was trading 2.58 per cent higher at Rs 1,305.80. At this level, the counter has risen 63.23 per cent from its initial public offering (IPO) price of Rs 800.

BSE has placed NSDL under the short-term Additional Surveillance Measure (ASM) framework, a mechanism used to caution investors about heightened volatility in share prices.

The depository services major is also set to announce its maiden quarterly results post-listing later today.

Analysts broadly advised that short-term traders and those aiming for listing gains should look at profit booking at current levels.

Kranthi Bathini, Director – Equity Strategy at WealthMills Securities, said, "Long-term investors can continue holding NSDL, but those with a medium- to short-term outlook may consider booking some gains."

Sebi-registered independent analyst AR Ramachandran also advised booking profits at current levels.

Nitin Jain, Senior Research Analyst at Bonanza, said, "NSDL has witnessed an exceptional rally since its August 6 listing, driven by strong IPO response, post-listing momentum, a robust business model, its position as India's largest depository, and positive market sentiment. After such a sharp rise in just a few days, profit booking is advisable for short-term and listing-gain-focused investors. Near-term upside could be limited, and the stock may consolidate after a strong debut. For long-term investors willing to withstand short-term volatility, NSDL remains a quality pick backed by growing demat penetration."

Backed by strong fundamentals and a dominant position in the depository services space, NSDL garnered solid investor response during the IPO. The initial share sale was met with strong overall demand, being oversubscribed 41 times. Qualified institutional buyers (QIBs) led the charge, subscribing 104 times their allotted quota, followed by non-institutional investors (35 times) and retail investors (7.7 times).

The issue was open for bidding between July 30 and August 1. NSDL raised Rs 4,011.60 crore through a complete offer-for-sale (OFS) of 5,01,45,001 equity shares.