Stock market selloff: NSDL IPO GMP takes hit; what SBI Sec, Anand Rathi say

The rising volatility and selling pressure in the broader markets has dented the grey market premium (GMP) for IPO-bound National Securities Depository (NSDL). However, the carnage has not been severe as the listed market but the unofficial market has corrected as well even as the issue kicks-off later this week.

NSDL shall be raising a total of Rs 4,011.60 crore via primary markets, selling its shares of Rs 760-800 apiece. The IPO is entirely an offer-for-sale (OFS) of up to 5,01,45,001 equity shares by sellers like National Stock Exchange of India (NSE), IDBI Bank, HDFC Bank, State Bank of India (SBI), Union Bank of India and Administrator of the specified undertaking of the Unit Trust of India.

Last heard, shares of NSDL were commanding a grey market premium of Rs 135-140 per shares, suggesting a listing pop of 17-18 per cent for the investors, over the upper end of the price band. However, the grey market premium of NSDL stood close to Rs 165-170 when the RHP was filed for the issue.

Brokerage firms and analysts, tracking this IPO, continue to remain mostly positive on the issue. They cite that the issue is reasonably priced compared to its peer CDSL and the company is bound to reap benefits of rising equity culture in India, along with new products lined up.

NSDL will maintain its focus on unlocking growth opportunities and deepening market reach by utilizing its core competencies. It plans to strengthen and modernize its IT infrastructure to improve operational efficiency, elevate service standards, and bolster resilience. It aims to broaden its range of services, enhance its database management capabilities, and expand the market share of its payments bank division, said Anand Rathi Research.

At the upper price band company is valuing at P/E of 46.6 times to its FY25 earnings, and market cap of Rs 16,000 crore with return on net worth of 17.1 per cent post issue of equity shares. We believe that the IPO is fairly priced and recommend a ‘subscribe’ rating to the IPO,” it added.

NSDL reported a strong financial performance with a revenue, Ebitda and PAT growing at a CAGR of 17.9 per cent, 21.2 per cent and 20.9 per cent over FY23–FY25period, reflecting robust operating leverage. As of March 2025, it had 86.8 per cent market share by demat value and serviced 99.99 per cent of the demat value of FPI holdings in India.

Its revenue model is largely stable and annuity-like, with over 60 per cent of revenue derived from recurring sources such as annual custody fees charged to issuers and fixed annual DP fees. These recurring fees are independent of market turnover or transaction volume, providing insulation from market cyclicality, said SBI Securities.

“NSDL also generates revenue from licensing its DPM software, RTA services, and other auxiliary offerings. The IPO of NSDL is priced at 47 times FY25 P/E, compared to its peer CDSL which is trading at 67 times,” it added.

NSDL has reserved 85,000 equity shares for its eligible employees, who will get a discount of Rs 76 per share in the IPO. Of the net offer, 50 per cent shares are reserved for qualified institutional bidders (QIBs), while non institutional investors bidders will have 15 per cent of the net offer. Retail investors have a 35 per cent reservation in this IPO.

ICICI Securities, Axis Capital, IDBI Capital Markets & Securities, Motilal Oswal Investment Advisors and SBI Capital Markets are the lead managers to the issue. The company shall be listed at the bourses on both BSE and NSE with August 6, 2025 (Wednesday) as the tentative date of debut.

While regulatory scrutiny-particularly past issues linked to Karvy-and rising competition from CDSL remain watchpoints, NSDL’s institutional franchise, steady annuity-like cash flows, and sectoral leadership offer a strong case for anchor allocations, said Kalp Jain Research Analyst, INVasset PMS. “This IPO appeals to investors seeking long-term exposure to India’s capital market infrastructure’ he said.