The Draft Red Herring Prospectus (DRHP) mentions that the NSDL IPO will result in an Aggregate Offer for Sale (OFS) of up to 57,260,001 shares and the National Stock Exchange of India Ltd, IDBI Bank, State Bank of India, the HDFC Bank and Union Bank of India and the Unit Trust of India Administrator of the Specified Understanding will divest their shares in the company through OFS.
According to reports, the size of the NSDL IPO is expected to be around 50% ₹3,000 crore, which is worth more than the company ₹10,000 crores.
NSDL competes directly with the only other listed custodian, Central Depository Services (India) Ltd (CDSL), which has a market capitalization of around 50% ₹12,540 crore as of 11 July.
Also Read: NSDL IPO: IDBI Bank, NSE, HDFC Bank, SBI Are Among Custodian’s Major Shareholders; Just look
NSDL and CDSL are the only two custodians operating in India. NSDL competes with CDSL on parameters such as the number of custodians registered, the number of instruments processed and the range of innovative products it brings to market.
Here is a comparison between the two depots – NSDL and CDSL:
market share
NSDL had 3.15 crore active demat accounts as of March 31, 2023, while CDSL had more than 8.30 crore active demat accounts.
Meanwhile, the number of companies that had their securities in demat form on NSDL was 40,987 in FY23, compared to 20,323 companies on CDSL.
There are more unlisted companies registered with NSDL compared to CDSL. The number of unlisted companies at NSDL grew an average of 23% between FY18 and FY23.
In the financial year 23 was the demat custody value for NSDL ₹302.19 lakh crore compared to 39.71 lakh crore for CDSL.
As of March 31, 2023, NSDL serviced 99.99% of the value of equities, debt and other securities held in dematerialized form by foreign portfolio investors in India.
Also Read: NSDL Submits Draft Red Herring Prospectus to SEBI and Plans IPO
finance
The Custodians derive their business primarily from activities in the primary and secondary capital markets. The custodians’ income consists mainly of transaction fees, custody fees and annual fees.
In FY23, NSDL reported 50% overall sales ₹1,099.81 crore, a growth of almost 34% ₹821.29 crore in FY22. Net income increased by 11% in FY23 ₹234.81 crore from ₹212.59 crore in FY22.
CDSL’s revenue for fiscal year 23 was ₹620.94 crore while the net profit was higher than that of NSDL ₹275.96 crore in FY23.
However, CDSL’s operating performance in FY2023 was better than NDSL’s. While NDSL’s operating profit was ₹255 crore and a margin of 25%, CDSL’s operating profit was ₹319 crore with a margin of 57.5% in the same year.
Value
The nominal value of the NSDL shares is ₹2 per piece, while this is the case with CDSL ₹10 per piece. Diluted EPS of NSDL is ₹11.74 compared to CDSL ₹26.41 CDSL shares are trading at a P/E of 45.44x.
Dates for NSDL’s IPO and other details have not yet been announced. The company may give a discount to the eligible employees who bid in the employee reservation section.
It is proposed that NSDL shares will be listed on the BSE.
ICICI Securities, Axis Capital, HSBC Securities and Capital Markets (India), IDBI Capital Markets and Securities Ltd, Motilal Oswal Investment Advisors Ltd and SBI Capital Markets Ltd are the lead bookers of the offering, while Link Intime India Private Limited is the lead booker of the IPO -Registrar.
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Updated July 11, 2023 4:35 PM IST
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