NSDL Updates DRHP, Cuts IPO Size to 50.15 Million Shares Ahead of July Listing Deadline

National Securities Depository Ltd. has reduced its initial public offering size, according to an addendum to its draft papers. The offer now consists of 50.15 million shares compared to 57.26 million shares mentioned in the original draft red herring prospectus. The IPO only consists of an offer-for-sale component.

India’s capital markets are set for a historic moment as the National Securities Depository Limited (NSDL), the country's largest and most influential securities depository, moves swiftly toward its initial public offering (IPO). In a recent development, NSDL filed an updated Draft Red Herring Prospectus (DRHP), reducing its IPO size from an initially proposed 57.26 million shares to 50.15 million shares, a move that is illustrative of both regulatory compliance and market strategy as the company eyes the fast-approaching July listing deadline. Let us dig deep into what this means for the market, investors, and the broader financial landscape, while decoding every critical aspect that underpins this landmark issue.

NSDL’s Background: The Invisible Pillar of Indian Market Infrastructure

Established in 1996, NSDL pioneered the dematerialisation of securities in India, digitising what was once a paper-based, error-prone system. Tasked with safeguarding and facilitating the seamless movement of stock market assets, NSDL has accumulated a staggering custody value of assets worth over ₹484 lakh crore, surpassing any other institution in India by market share in demat settlement volume and asset value under custody. Its footprint covers more than 99% of India’s pin codes and includes over 3.88 crore active demat accounts.

NSDL’s business model revolves around offering secure, efficient depository services to both institutional and retail participants, including custody and settlement services, annual custody and transaction fees, and a technology-driven infrastructure that underpins a multitude of capital market activities. The company has a reputation for reliability, stability, and scale, elements essential to India’s equity and debt market growth.

Understanding the Revised IPO Structure

The NSDL IPO is structured entirely as an offer-for-sale (OFS), meaning no new shares will be issued, and the company will not receive any proceeds from the offering. Instead, existing shareholders will divest portions of their holdings. Key stakeholders participating in the OFS include:

IDBI Bank will offload over 22 million shares, representing 11.11% stake, whereas National Stock Exchange will sell 18 million shares, or 9% stake, as part of the offer-for-sale. Union Bank of India, State Bank of India and HDFC Bank will cumulatively off-take over 3% stake in the company, while other selling shareholders will sell an aggregate 2% stake. Currently, IDBI Bank and National Stock Exchange hold 26% and 24% stake in NSDL, respectively, whereas HDFC Bank holds nearly 9% stake.

In  2018, the Securities Exchange Board of India introduced rules limiting single-entity ownership in market infrastructure institutions to 15%, with a five-year compliance window ending in October 2023. The market regulator had granted extension to NSE for divesting its ownership in NSDL.

Earlier this year, the market regulator SEBI granted an extension to the depository for listing its shares. The extension was granted until July 31, 2025. According to reports, National Securities Depository Ltd (NSDL) sought extension citing market conditions. The depository had filed for the IPO in July 2023 and the SEBI gave its approval for the said issue. Another depository, CDSL, is already listed on the bourses.

Selling Shareholder	Earlier OFS (Shares)	Revised OFS (Shares)
IDBI Bank Ltd	22,220,000	22,220,000
NSE (National Stock Exchange)	18,000,001	18,000,001
Union Bank of India	5,625,000	500,000
State Bank of India	4,000,000	4,000,000
HDFC Bank Ltd (SS)	4,000,000	2,010,000
SUUTI (UTI Administrator)	3,415,000	3,415,000
Total	57,260,001	50,145,001

NSDL IPO Lead managers

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ICICI Securities, Axis Capital, HSBC Securities and Capital Markets (India), IDBI Capital Markets & Securities, Motilal Oswal Investment Advisors and SBI Capital Markets are the book running lead managers of the issue.  

The depository’s consolidated net profit zoomed 33% on year during the nine-month ended December. Its consolidated revenue during the period rose 13% on year. Its net cash and cash equivalents also increased to Rs 82.9 crore as on December 31, 2024 from Rs 76 crore a year ago.

Financial Performance and Operational Scale: A Snapshot

NSDL’s solid operational and financial credentials are undeniable. Its revenue from operations has steadily risen—₹771.1 crore in FY22, ₹1,022 crore in FY23, and over ₹1,268 crore (9 months FY24), along with strong profit after tax and EBITDA margins. With over 40% of operational revenue derived from core depository services and around 20% from recurring annual fees and management charges, NSDL is relatively insulated against short-term market cycles. Its Return on Equity (ROE), while experiencing mild compression, remains robust at above 16% in FY23 and FY24.

Notably, National Securities Depository Ltd (NSDL) has embraced digital innovation and security enhancements, investing in a 24/7 Security Operations Centre, the MITRE ATT&CK® framework, and other cutting-edge cybersecurity protocols. These investments are vital given the sensitive nature of depository systems and the high stakes of operational disruptions or data breaches for the Indian financial market.

Financials (in ₹ Cr)	FY21	FY22	FY23	FY24	9M FY25
Revenue	482	771	1,021	1,268	1,141
Profit after Tax	188	212	234	275	260
EPS(₹)	47	10	11	13	13

NSDL vs CDSL: Comparing Market Infrastructure Giants

For investors assessing the broader market context, a comparison with Central Depository Services Ltd (CDSL) is instructive. While NSDL dominates in value and institutional relationships, CDSL has become a favorite for brokers and retail investors, managing the lion’s share of demat accounts. CDSL’s retail-friendly model delivers high transaction fees, operating leverages, and robust profit margins, contrasting with NSDL’s stability, recurring revenues, and institutional focus.

Features	NSDL	CDSL
Market Focus	Institutional	Retail
No. of Active Demat Accounts	~3.88 Cr	~14.64 Cr
Asset under Custody	₹484 lakh C	₹74.57 lakh crore

The Regulatory Landscape: SEBI’s Role and the July Listing Deadline

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The July listing deadline imposed by SEBI underscores the regulator’s seriousness about ownership compliance and governance in market infrastructure. The extension granted after the initial October 2023 compliance window lapsed due to challenging market conditions was a necessary buffer to absorb market volatility and allow procedural clarity. The IPO's timing, expected now between late May and July 2025, is a calculated step to maximize market receptivity.

SEBI’s tight supervision ensures that depositories like NSDL not only expand participation but are also subject to public-market governance standards. The compliance-driven structure of the offering, with proceeds going entirely to existing shareholders, marks this issue as fundamentally different from traditional capital-raising IPOs in the sector.

Conclusion

NSDL remains an essential pillar of India’s financial market infrastructure, marked by robust growth, technological innovation, and an extensive national footprint. Investors eyeing NSDL unlisted share price, NSDL share price today, or participating in the NSDL IPO stand to gain exposure to one of the most stable and strategically critical market institutions.

With the revised DRHP filed and SEBI's approval in place, NSDL is poised to proceed with its IPO before the July 31, 2025, deadline. For accurate and timely updates on NSDL’s share prices and IPO developments, investors should consult credible financial platforms and stay attuned to official disclosures by NSDL and SEBI.