India’s strong primary-market activity is expected to provide a much-needed boost to CDSL and NSDL’s Q2 FY27 earnings, even as subdued secondary-market activity weighs on transaction revenues. Brokerages expect IPO-linked income, annual issuer services, new demat accounts and corporate actions to support the depositories during the September quarter.
Nuvama Institutional Equities expects a muted recovery in the secondary market, with Q2 cash and delivery average daily traded volumes (ADTV) estimated to decline 14.1% and 1.7%, respectively, sequentially. However, this is likely to be offset by a sharp revival in primary-market activity, with ₹92,600 crore raised in Q2 FY27, up 9.8 times sequentially.
The brokerage also expects demat account additions to improve, averaging around 2.5 million a month in July and August, compared with 1.9 million in Q1 FY27, a 31.3% sequential increase. CDSL added around 2.7 million demat accounts in August, its highest addition so far in FY27. Nuvama expects IPO-led revenue to be the key revenue driver for the quarter.
CDSL likely to benefit more from IPO activity
Abhinav Tiwari, Senior Research Analyst at Bonanza, said the strong IPO activity in Q2 FY27 should support both CDSL and NSDL, although the benefit is likely to be more visible on a sequential basis than year-on-year.
He expects CDSL to benefit more from the IPO wave because of its higher exposure to retail investors, while NSDL is likely to see a steadier impact. Mainboard IPOs raised a record ₹94,205 crore between April and September 2026, with around ₹90,411 crore raised during July-September alone, Tiwari noted.
However, he cautioned that depositories do not earn fees directly on the amount raised through IPOs. Their revenue is largely linked to the number of allotment records and corporate actions. As a result, large institution-led IPOs and OFS transactions can generate less revenue per rupee raised compared with smaller, retail-heavy issues.
For CDSL, IPO and corporate-action income could rise sharply from ₹27 crore in Q1 FY27, supported by the busy IPO calendar and AGM season, Tiwari said. This could result in a strong sequential improvement, although a high Q2 FY26 base may limit year-on-year growth.
NSDL, meanwhile, is less dependent on IPO activity and is expected to benefit from growth in its share of demat accounts and higher e-voting income during the AGM season.
IPO boom alone may not sustain earnings
Naren Agarwal, CEO of Wealth1, said the IPO boom could provide a lift to CDSL and NSDL’s Q2 numbers, but IPO activity alone is unlikely to drive a sustained earnings recovery.
He noted that mainboard IPOs raised a record ₹94,205 crore from 78 issues between April and September, while the SEBI pipeline remains strong. The increase in demat accounts also provides another avenue for revenue growth through new account additions, IPO processing and corporate actions.
The impact, however, is likely to be uneven. CDSL accounted for the bulk of August’s demat additions, with around 27.4 lakh accounts compared with 5.3 lakh for NSDL, Agarwal said. This gives CDSL greater near-term sensitivity to a retail-driven IPO cycle, while NSDL’s strength remains its larger custody franchise, making issuer services and large offerings more important contributors.
Agarwal also pointed to CDSL’s Q1 performance, in which IPO and corporate action revenue increased 29% year-on-year. However, he said annual issuer fees and transaction charges remain more important than one-off listing-related income as recurring revenue streams.
For investors, the key is therefore the quality and sustainability of revenue growth, rather than simply the headline IPO fundraising number. A quarter driven primarily by IPO income could prove temporary if the pipeline weakens or activity shifts into subsequent quarters, he said.
What brokerages expect from CDSL and NSDL
Motilal Oswal Financial Services expects CDSL’s transaction revenue to decline because of lower cash-market activity, although online data-charge revenue is expected to recover following recent pricing changes. EBITDA margins are expected to improve sequentially on stronger revenue growth.
The brokerage expects IPO-linked revenue and annual issuer services income to be the key contributors to CDSL’s revenue growth, while other income could decline in Q2 due to unfavourable market conditions.
For NSDL, Motilal Oswal expects revenue growth to remain healthy sequentially, supported by higher annual custody fee income. Banking-channel revenue is expected to remain broadly stable, aided by the benefits of recent MDR regulations, while EBITDA margins are expected to improve.
The brokerage said incremental demat account market-share gains and new fintech partnerships will remain key monitorables for NSDL.
CDSL technical outlook remains weak
Despite the positive earnings triggers, CDSL’s near-term technical setup remains under pressure.
Sudeep Shah, Vice President – Technical and Derivatives Research at SBI Securities, said CDSL recently broke below the ₹1,300–1,290 major swing-low zone on the daily chart and has since drifted lower.
He noted that the DI- remains well above DI+ on the ADX indicator, pointing to strong bearish control. According to Shah, the bearish bias is likely to remain intact as long as the stock trades below the ₹1,300–1,290 zone.
What investors should watch
The key takeaway for investors is that IPO activity should provide a near-term earnings boost to both depositories, but the magnitude and durability of the benefit will depend on the revenue mix.
For CDSL, the focus will be on IPO and corporate-action income, retail demat additions and operating leverage. For NSDL, investors will need to track custody income, issuer services, demat market-share gains and fintech partnerships.
Ultimately, sustained growth in secondary-market volumes, new demat accounts and recurring issuer and transaction revenues will matter more than a single strong IPO-led quarter, analysts said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
