NSDL’s Upcoming Market Debut Draws Comparisons With CDSL: SEBI RA Flags What Sets Them Apart

NSDL is set to debut on the public markets, drawing investor interest and comparisons to its closest peer.

SEBI-registered research analyst Sumesh Guleria has weighed in on the upcoming NSDL IPO, pointing to key differences in business models and valuations relative to Central Depository Services (India) Ltd (CDSL).

Business Mix and Margin Profile

While both NSDL and CDSL operate in the depository services space, NSDL has been gradually losing market share to CDSL, especially in the fast-growing retail segment. 

Guleria notes that CDSL’s integrations with newer discount brokers like Zerodha, Groww, and Angel One have helped it capture more retail demat accounts.

 In contrast, NSDL remains more closely aligned with traditional brokerages.

The core revenue structures also differ: 65% of CDSL’s depository business income is recurring in nature, compared to 42% for NSDL. This gives CDSL a more stable and predictable revenue profile. 

Margins are another key differentiator. While both firms report 50–55% margins in their core depository operations, NSDL’s Banking Services division, which contributes over half its total revenue, is significantly less profitable. 

As a result, NSDL’s consolidated margin stands at just 24%, well below CDSL’s 53%.

Valuation and Listing Outlook

NSDL’s IPO is priced at approximately 46 times earnings, broadly in line with CDSL’s 3–5 year average multiple of 50x. 

However, Guleria points out that CDSL currently trades at around 63x, a premium that may not be sustainable if valuations normalize. Meanwhile, NSDL’s diversified business mix and weaker consolidated margins could result in it trading at a relative discount post-listing.

Unless NSDL restructures or demerges its lower-margin Banking Services segment, the market may continue to assign it a lower valuation multiple. 

At the end of Day 1, NSDL’s grey market premium (GMP) stood at 16–17%, indicating expectations of modest listing gains. 

Guleria said that while NSDL benefits from strong brand recognition and legacy positioning, the current valuation, margin dynamics, and market sentiment could limit upside potential in the near term.

On Stocktwits, retail sentiment was ‘bearish’ for CDSL and ‘neutral’ for NSDL, with ‘high’ and ‘extremely high’ message volume, respectively.

CDSL’s stock has declined 17.3% so far in 2025.

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