Mumbai National Securities Depository Limited (NSDL), India’s first and largest depository services company, has initiated talks with investment banks for an initial public offering. 4,500 crore, two people apprised of the development.
NSDL was established in 1996 after the enactment of Depositories Act. As on 31st May, it had over 27.6 million investor accounts whose demat custody value 297.55 trillion. Depositories have a market share of over 89% in terms of demat asset value.
see full image
India’s only other depository – Central Depository Services (India) Limited (CDSL) – went public in 2017. 524 crore in an IPO which was subscribed 170 times. CDSL was established in 1999.
“NSDL has started talks on its planned IPO. Most of the top domestic and foreign investment banks are vying for IPOs, and the mandate may be finalized in the next few weeks. The IPO is mostly going to be a secondary share sale by the existing investors, while some small amount may be raised as part of the IPO. Majority of the shareholders of the company including several public sector bank shareholders and other investors of the company are likely to sell part of their holding through IPO,” said one of the two persons mentioned above on the condition of anonymity.
The largest shareholders of NSDL are IDBI Bank and National Stock Exchange (NSE), which hold 26% and 24% respectively. Other state-owned lenders State Bank of India, Union Bank of India and Canara Bank own 5%, 2.81% and 2.30% respectively, while the central government, through a specified undertaking of the Unit Trust of India (SUUTI), owns 6.83%. holds. , Other shareholders of NSDL include HDFC Bank, Citibank, HSBC, Standard Chartered Bank, Deutsche Bank, Kotak Mahindra Life Insurance Company Limited and IIFL Special Opportunities Fund.
IPO likely to be worth less than 4,500 crore on the valuation of 16,000-17,000 crore, the second person cited above also said on condition of anonymity.
Emails sent to NSDL remained unanswered till press time.
For the financial year ended 31 March 2022, NSDL reported consolidated revenue of 821.29 crore, up 56% from the previous financial year 524.30 crores. Company reported profit of 212.32 crore in FY22 as compared to a profit of Rs. 188.55 crore in the last financial year.
NSDL’s Depository Services Contributed 369.26 crore revenue in FY 2012, followed by its banking services business 299.24 crore more database management services brought in 92.60 crores.
NSDL’s plan to go public comes at a time when demat account openings have exploded due to the post-Covid rally in the stock markets. After a sharp jump of 14.2 million in new demat accounts in FY2011, the opening increased to 34.7 million in FY12. The total number of demat accounts in the country stood at 94.77 million at the end of 31 May 2022. Certainly, the pace of demat account opening is expected to slow down this year due to the correction in stock prices and volatility due to global macroeconomic challenges.