NSDL IPO Opens Tomorrow: Understand How NSDL Earns via Transaction Fees, Custodial Services, E-Governance, and Subsidiaries

Mumbai, July 29, 2025: National Securities Depository Limited (NSDL), India’s oldest and largest depository, operates a diversified business model to generate income. Its revenue streams include depository fees, custody-related charges, e-governance platforms, and digital financial services provided through its subsidiaries. This structure provides a balanced mix of annuity-based and volume-driven revenue.

Depository Business: Core Engine of Transaction and Custody Fees

At the heart of NSDL’s operations is its role as a securities depository, providing essential services such as dematerialisation, settlement, and safekeeping of securities. This segment generates income primarily through:

• Transaction Fees: Applied to every debit instruction in demat accounts, for instance, delivery-based trades.
• Custody Fees: Charged annually based on the value of securities held in demat form.
• Issuer Fees: Collected from companies for corporate actions, account setup, and annual custodial maintenance.
• Account Maintenance: Indirectly recovered via depository participants for servicing demat account holders.

In FY25, NSDL’s depository services alone generated ₹6,186 million, accounting for 43.6% of its total operating revenue of ₹14,201 million. The transaction fee component was particularly significant at ₹4,249.6 million, representing nearly 30% of the operational revenue, indicating strong activity in the Indian capital markets. Custody and Issuer Services contributed approximately ₹1,936.4 million, making up about 13.7% of the operating revenue.

NDML: E-Governance and Regulatory Platforms

NSDL Database Management Limited (NDML), a wholly-owned subsidiary of NSDL, manages a suite of digital platforms that serve both government and regulatory functions. These platforms include:

• KYC Registration Agency (KRA): A centralised investor KYC registry regulated by SEBI.
• SEZ Online: A platform for Special Economic Zones to manage regulatory approvals.
• Insurance Repository: Enables digital storage of insurance policies, regulated by IRDAI.
• Accreditation & RTAs: Services provided for alternative investment funds and listed companies.

In FY25, NDML contributed ₹823.1 million in revenue, with net profits of ₹355.7 million. It operates largely on fee-based income models, charging various clients such as SEBI intermediaries, government departments, and institutional issuers. Notably, within NDML, the Insurance Repository (NIR) recorded a revenue of ₹46.93 million and a profit of ₹1.85 million for the year ended 31st March 2025.

NPBL: Digital Banking and Micro-ATM Network

Through NSDL Payments Bank Limited (NPBL), NSDL has established itself as a significant player in financial inclusion and digital banking. NPBL operates a large Aadhaar Enabled Payment System (AePS) and has deployed more than 307,200 micro-ATMs across India.

Revenue for NPBL is generated through:

• AePS & UPI Transactions: Income from interchange and acquiring within the Aadhaar and digital payment ecosystems.
• Payment Aggregation: Gateway fees for processing e-payments for both public and private sector clients.
• Prepaid and Savings Accounts: Fee income from wallet services and transaction-led charges.

In FY25, NPBL reported ₹7,199 million in revenue, which constituted over 50% of NSDL’s consolidated revenue. However, its profitability is lower due to higher operating costs associated with payment infrastructure and financial inclusion networks.

Segment-Wise Financial Contribution

In FY25, the consolidated operational revenue of NSDL was primarily driven by its entities:

• NSDL (Depository): Contributed ₹6,186.0 million in revenue, making up 43.6% of the consolidated operational revenue, with a Profit After Tax (PAT) of ₹3,431.2 million.
• NPBL: Generated ₹7,199.3 million in revenue, accounting for 50.7% of the consolidated operational revenue, but with a lower PAT of ₹36.6 million.
• NDML: Contributed ₹823.1 million in revenue, representing 5.7% of the consolidated operational revenue, and recorded a PAT of ₹355.7 million.

The consolidated profit before tax for NSDL in FY25 was ₹4,534.43 million.

A Diversified and Scalable Model

NSDL’s revenue mix is uniquely structured, combining the stability of annual issuer and custody fees with the scalability of transaction-based income from capital markets and digital payments. Its ability to monetise across government technology infrastructure and financial platforms ensures both regulatory alignment and recurring cash flows. By anchoring its strategy around capital market infrastructure, e-governance services, and inclusion-centric fintech, NSDL has built a multi-dimensional income engine that aligns with India’s long-term digitisation, compliance, and capital formation journey.

NSDL’s Initial Public Offering (IPO) Details

NSDL is currently preparing for its maiden listing on BSE. The Red Herring Prospectus dated 23rd July 2025 confirms an Initial Public Offer (IPO) of up to 50,145,001 Equity Shares of face value of ₹2 each through an Offer for Sale.

The Selling Shareholders participating in the Offer for Sale include:

• IDBI Bank Limited: Up to 22,220,000 Equity Shares
• National Stock Exchange of India Limited: Up to 18,000,001 Equity Shares
• State Bank of India: Up to 4,000,000 Equity Shares
• HDFC Bank Limited (SS): Up to 2,010,000 Equity Shares
• Union Bank of India: Up to 500,000 Equity Shares
• Administrator of the Specified Undertaking of the Unit Trust of India: Up to 3,415,000 Equity Shares

The Offer includes a reservation of up to 85,000 Equity Shares for subscription by Eligible Employees.

The Bid/Offer for NSDL IPO is scheduled as follows:

• Anchor Investor Bidding Date: Tuesday, 29th July 2025
• Bid/Offer Opens On: Wednesday, 30th July 2025
• Bid/Offer Closes On: Friday, 1st August 2025

The Equity Shares are proposed to be listed on BSE Limited (“BSE”).

NSDL IPO Opens Tomorrow: Insights For Retail Investors

• Strong Core Business: NSDL’s depository operations are a key revenue generator, contributing ₹6,186 million (43.6% of operating revenue) in FY25. Transaction fees alone made up nearly 30%, highlighting their importance in market infrastructure.
• High-Growth Digital Arm: NSDL Payments Bank (NPBL) generated ₹7,199 million in FY25 (50.7% of total revenue), driven by AePS, UPI, and payment aggregation services. However, its lower profitability reflects high infrastructure costs tied to financial inclusion.
• Stable E-Governance Revenue: Through NDML, NSDL earns steady fee-based income from regulatory tech platforms like KYC Registration and SEZ Online. NDML posted ₹823 million revenue with a PAT of ₹355.7 million in FY25.
• Balanced Revenue Mix: NSDL’s model blends annuity income (custody/issuer fees) with scalable transaction-based earnings. This diversification supports sustainable cash flows and aligns with India’s digital and compliance infrastructure growth.
• IPO Structure: The ₹4,000 crore IPO is a 100% Offer for Sale by existing shareholders. Retail investors have the opportunity to invest in a company with a mature, profitable business model, operating at the core of India’s capital market ecosystem.

About NSDL

Established in 1996, National Securities Depository Limited is India’s first and largest depository. It is regulated by SEBI and provides services through 294 depository participants. It operates key subsidiaries – NDML and NPBL – offering regulatory tech platforms and digital banking services, respectively.

REF: https://nsearchives.nseindia.com/content/ipo/RHP_NSDL.zip

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