COMPANY

REPORT ON

January 2024

Brief Report on National Securities Depository Limited (NSDL) prepared

by The Synergy Syndicate (TSS)

All The Data Presented in the report are based as on 17th December and are subject to change upon discovery,
Please Refer to the TSS App for the latest Prices

January 2024 www.thesynsyn.com

About NSDL CMP : ₹1166

National Securities Market Cap ₹23320 Cr

NAME
Depository Limited

BOOK VALUE 75
INDUSTRY Depository Services

P/E RATIO 97
LOCATION Mumbai , India

P/B Ratio 15.5

INCORP YEAR 1996

WEBSITE nsdl.co.in EV/EBITDA 68.39

SERVICES Shares transfers REVENUE ₹11,365 Cr

Competitors CDSL EPS 4.81

A Brief Overview About NSDL

Established in August 1996, NSDL is one of the world’s largest depositories,
providing state-of-the-art infrastructure for holding and settling securities
in dematerialized form in the Indian capital market. Before its inception,
India’s century-old capital market faced challenges like bad deliveries and
delayed transfers due to paper-based settlements. The enactment of the
Depositories Act in 1996 enabled the creation of NSDL, transforming the
settlement process.

NSDL leverages innovative and flexible technology to support investors and

brokers, enhancing the efficiency, safety, and cost-effectiveness of Indian
marketplaces. It simplifies the transfer of securities ownership through
depository accounts, akin to holding funds in bank accounts, eliminating
paperwork-related risks and reducing transaction costs significantly.
Through its extensive network of Depository Partners, NSDL offers a wide
range of services to investors, stockbrokers, custodians, and issuer
companies, catering to the evolving needs of the financial services industry.
Transaction and Facilitating asset
other services servicing

Maintaining
allotment and Central record
transfer of holder of account
ownership records holders

SHAREHOLDING Revenue Split

Corporates Annual fees
26% 2.7% Custody fees
18.5%

individuals
1.6% Banking services
Banks
DFIs 60.3% 53.5%
9%

Transaction fees
Insurance Companies 25.3%
3%

MANAGEMENT

Parveen Kumar Gupta Padmaja Chunduru

Chairman MD & CEO
He has experience in the banking sector of A seasoned financial services executive
over 37 years and has held various positions with over 30 years of banking and
in the SBI group, including MD (Compliance regulatory experience in India and USA.
& Risk), MD&CEO, SBI Capital Markets Ltd, Specialised experience in corporate
DMD & CFO, SBI DMD (Global Markets), Dy. lending and credit management .
CEO, SBI-MACQUARIE Infra. Mgmt. (P) LTD.,
and CGM (Global Markets), SBI.
Market Trend

Market Share

While CDSL leads the market in the total number of demat accounts,
NSDL holds a significantly larger share of assets under custody,
showcasing its dominance in managing high-value institutional
investments.

Market Overview

India’s capital market, valued at $4.33 trillion and ranked as the fourth
largest globally, is driven by strong consumption demand, robust
government capital expenditure, rapid digitization, and favorable
regulatory policies. The dynamic and well-regulated market benefits
depositories like NSDL and CDSL through increased transaction
volumes from rising foreign investments, growth in demat accounts
due to greater market participation, higher revenue from fees and
settlements, and a strengthened global position through cross-border
investments. In FY2024, the market witnessed a significant surge in
demat accounts, with an average of 30 lakh additions monthly, leading
to an 11.9% YoY growth and raising the total accounts to 15.14 crore
from 11.45 crore. This growth underscores the expanding role of
depositories in supporting India’s evolving capital market
infrastructure.
 CONSOLIDATED BALANCE SHEET
(Amt in ₹ Cr.) (Amt in ₹ Cr.)

Particulars 2023 2024 Particulars 2023 2024

Total Equity 1428 1684 Fixed Asset 73 301

Non-
Current 24 22 Other NCA 1184 1325
Liabs

Current Current
639 551 835 630
Liabilities Assets

Total Equity
and 2093 2257 Total Assets 2093 2257
Liabilities

CONSOLIDATED INCOME STATEMENT

(Amt in ₹ Cr.)

Particulars 2023 2024

Revenue 1099 1365 +(24.2)%

(Expenses) (789) (1009)

Profit before Adjustments 305 356 +(16.7)%

(Tax Expense) (70) (79)

PAT 234 275 +(17.5)%

EPS 11.74 13.77

+(17.2)%
 CASHFLOW STATEMENT SNAPSHOT
(Amt in ₹ Cr.)

Particulars 2023 2024

Profit before Tax 233 354

Cash from Operations 327 112

Cash from Investing (374) (172)

Cash from Financing (20) (20)

Net Cash Generated (67) (79)

Key Takeaways from Financials

Record Revenue and Profit:

Group revenue reached ₹1,268.24 crore, and profit after tax (PAT) was ₹275.44 crore,
reflecting a YoY growth of 24.1% in revenue and 17.3% in PAT, achieving the highest
figures in NSDL’s 27-year history.

Operational Growth:
Demat accounts grew to 3.58 crore, with custody value surpassing $5 trillion, and 5,028
new issuers added, increasing the total to 46,018 issuers.

Subsidiary Performance:
NDML: Revenue of ₹94.35 crore and PAT of ₹35.47 crore.
NSDL Payments Bank: Revenue of ₹719.88 crore and PAT of ₹1.58 crore.

Technology Impact:
Implemented a blockchain-based DLT platform managing 4,000 active secured
debentures and a T+0 settlement beta, boosting liquidity and operational efficiency.
 FINANCIALS GRAPH

Net Working Capital Turnover: Reflects

improved liquidity from short-term maturities
and focus on long-term growth investments.

Net Profit Margins (~50%): Indicates strong

profitability, pricing power, and
operational efficiency, exceeding industry
standards.

Rising ROI: Highlights better resource

utilization, profitability growth, and
enhanced operational efficiency year-
over-year.

Trade Receivables Turnover:

Demonstrates efficient credit
management and strong recovery
processes, improving cash flow and
liquidity.
 Key Operational Metrics

3.58 Cr $ 6 Trillion
Demat Account Holders IN Assest Under Custody

T+0
Settlement
278
Depository Participant as Partners
Beta Version of T+0 days Settle has
been rolled out , first of its kind

Valuation
No. Of Shares 20 Cr

Price 1166

Value of Company ₹23320 Cr

Face value Rs. 2

The company is trading at a Price-to-Earnings (P/E) ratio of 94,

significantly higher than CDSL's P/E of 70. This premium valuation
highlights strong investor optimism and confidence in the company’s
future growth trajectory. Such a high P/E suggests that investors expect
the company to deliver superior performance, capitalize on emerging
opportunities, and maintain its market leadership in the long run
 COMPETITOR ANALYSIS

Demat accounts with NSDL and CDSL differ in format and structure. NSDL
accounts consist of 14 numeric digits and always begin with the prefix ‘IN’,
while CDSL accounts have 16 numerical digits. NSDL, established in 1996, is
promoted by IDBI Bank and NSE, whereas CDSL, founded in 1999, is backed
by BSE. Despite these differences, the overall distinction between the two
depositories is not significant, as both serve the same purpose of holding
securities in electronic form.

Particulars

₹23320 Cr Market Cap ₹37,732 Cr.

₹1365 Cr. Revenue ₹1035 Cr.

45.2 % Net Profit Margin 51%

3.7 Cr 13.34 Cr
Total DEMAT
Demats Demats

84,68 P/E Ratio 70.8

Assest Under
$5.6 trillion $986 billion
Custody

278 DPs Associated 612

13.77 EPS 25.5

CMP
₹1166 ₹1,805
(29-nov-2024)
 LATEST BUZZ: NSDL Gears Up for Its
Landmark Public Listing

SEBI Clears NSDL IPO

Regulatory Approval:

SEBI (Securities and Exchange Board of India) approved the Initial Public
Offering (IPO) of the National Securities Depository Ltd (NSDL) on
September 30, 2024.
Approval is based on the issuance of an "observation letter," which signals
the green light for the public issue.

IPO Details

Type of Issue:
The IPO is entirely an Offer for Sale (OFS), meaning existing shareholders
will sell their stakes, and no fresh equity will be issued.

Equity Details:
Total equity shares to be sold: 5.72 crore shares.
Face Value: ₹2 per share.

STAKEHOLDER DILUTING MAJORITY SHARES

Union Bank of India (UBI): IDBI Bank: HDFC Bank:

Canara Bank:
Stake: 2.8% Stake: ~26% Stake: 8.95%
Selling: 56.2 lakh shares Stake: 2.3%
Selling: 2.22 crore shares Selling: 2% stake

National Stock Exchange (NSE): State Bank of India (SBI):

Stake: 24% Stake: 5%
Selling: 1.8 crore shares Selling: 40 lakh shares
 KEY HIGHLIGHTS

Market Reach
Pincode Coverage: Investors across 99.3% of India's Performance Highlights (2023-24)
pincodes. Revenue: ₹473 Cr
Service Network: Over 63,000 service centers, spanning Profit After Tax: ₹258 Cr
all states and union territories. Number of Issuers: 46,015
Demat Account Holders: 3.58 Cr
NSDL ensures extensive accessibility and nationwide
coverage.

NSDL rolls out T+0 Settlement

NSDL Custody Value crosses US $5
India, the first Nation to introduce T+0
Trillion
Settlement

eServices
Issuer Service Offerings
SPEED-e: Facilitates the submission of
e-AGM & e-Voting: Secure digital participation
delivery instructions securely.
in general meetings and shareholder
IDeAS & SPEED-e App: Enables clients and resolutions.
clearing members to access balances, DLT Monitoring & Issuer Portal: Blockchain for
holdings, and essential reports. compliance and ISIN allocation.
SPICE & STeADY: Supports eDIS, POA Value-Added Products: Includes tax services,
mandates, and electronic contract notes updates (bank/email), and centralized FPI &
for institutional clients. bond data.

Digital Integrations
Digital LAS & eDIS: Supports securities pledging and electronic
delivery for trading/margin obligations.
Demat Validation & MF Services: Verifies accounts and
facilitates mutual fund redemption/conversion.
Open Architecture System: Provides seamless integration with
bank-based depository participants.
CONCLUSION

NSDL stands out as one of the world’s largest depositories, playing a pivotal
role in India’s capital markets. With a market reach covering 99.3% of India’s
pincodes and over 63,000 service centers, it ensures extensive accessibility and
operational efficiency. NSDL has demonstrated robust growth, achieving
record-breaking revenue and profit in FY 2023-24, with a PAT of ₹275.44 crore
and custody value exceeding $5 trillion. Its adoption of advanced technologies
like blockchain-based DLT and T+0 settlement (beta) reflects its commitment
to innovation and operational optimization, enhancing liquidity and
positioning India as a global leader in financial markets.

As an investment, NSDL benefits from increasing market participation, growth

in demat accounts, and higher transaction volumes, driven by factors like
India’s robust economic fundamentals and favorable regulatory environment.
However, its performance is also subject to global economic fluctuations and
technological disruptions. While its strong financials, operational scalability,
and focus on innovation make it a promising long-term bet, potential
investors should assess risks tied to market volatility and the need for
continuous technological investments.

Disclaimer:
The investment report is for informational purposes only and does not constitute financial advice or a solicitation to buy or sell securities. The content is
based on information available up to the date of this report and is subject to change. The recommendation section is left open-ended and doesn’t suggest
bias towards any side, but an overview of the opportunity analysed by the team. All investments carry risks, and individuals should consult with a financial
advisor before making investment decisions.

December 2024 www.thesynsyn.com