HDFC Bank was the only significant shareholder that pared its stake in NSDL by 1.99 million shares, or a percentage point, to 7.95% over a year through 23 July, when the depository filed its offer documents with the Securities and Exchange Board of India.
Returns for HDFC Bank at the upper end of NSDL’s ₹760-800 offer band would be 702%, or ₹161 crore, as its weighted average cost of acquiring NSDL shares was ₹108.29 apiece on a fully diluted basis.
In an offer for sale, promoters in a listed company sell their shares directly to the public.
Kotak Mahindra Life Insurance Co. Ltd—which doesn’t figure among the selling shareholders in NSDL’s IPO, and which held 2.97% stake in the depository a year before it filed its offer documents—also pared its stake through the unlisted market.
“The supply of NSDL shares in the unlisted market in the last one year came from the institutional side,” said Narinder Wadhwa, managing director of SKI Capital.
The top selling shareholders in NSDL’s IPO include IDBI Bank Ltd (which holds a 26.1% stake in the company), National Stock Exchange of India Ltd (24%), HDFC Bank (7.95%), and Administrator of the Specified Undertaking of the Unit Trust of India (6.83%). NSDL has 34,802 shareholders, as per its offer document.
“In the past year, the share price of NSDL has ranged from around ₹800 to ₹1,200, and currently stands at ₹1,000 odd,” said a broker, requesting anonymity.
The upper end of NSDL’s offer price is at a ₹200 discount to the unlisted share price. However, the broker said that based on the grey market premium at ₹165 per share, NSDL’s listing price is likely to be around the price on the unlisted market before it filed its offer document.
The grey market, which is activated around the declaration of the offer price, is where bets are placed on the estimated premium or discount that a company lists at in comparison with its offer price. The difference is what is traded, unlike in the unlisted market, where the full price is exchanged.
No loss to retail holders
Wadhwa said there was no question of a loss to retail holders as NSDL is the leader in the depository business.
“Retail (investors) who had purchased shares from the likes of HDFC Bank would have to hold the share for longer to earn higher returns,” he added .
Wadhwa estimated the number of NSDL retail investors at 9,000-10,000 currently, following a jump in the number coinciding with the easing of the share transfer process in April.
Prior to that, the share transfer process took three months, as NSDL had to vet its know-your-customer or customer verification process for each buyer to ensure they were fit and proper to hold a stake in the market infrastructure institution, as per Sebi’s criteria.
As per Sebi’s criteria, a person holding shares in stock exchanges, depositories, or clearing corporations should be unencumbered by civil liabilities or conviction, among other factors.
Currently, the share transfer process is effected in a day.
The appetite for NSDL shares is reflective of the retail frenzy for companies in the capital markets segment with an eye on handsome returns when such companies list.
A higher level of frenzy has been seen in shareholder count on NSE since late March in the unlisted market after its ISIN was activated. (An ISIN, or international securities identification number, is an alphanumeric code that uniquely identifies a stock or bond.)
NSE’s shareholder count has jumped to 160,000 from 39,201 at the end of March, per the unnamed broker quoted above. This has since fuelled NSE’s unlisted price from around ₹1,500 to ₹2,200-2,250, he said.
NSDL’s market leading position is reflected by the total value of the demat accounts it holds, which stood at ₹464 trillion in fiscal 2025, per its offer document. The Central Depository Services Ltd (CSDL) held ₹70.5 trillion worth of demat accounts in the same period.
