NSDL IPO Around the Corner; CDSL Shares Slide 12% in Just 30 Days; NSDL vs CDSL, Valuation in Focus

Shares of CDSL are trading under pressure on Tuesday, as buzz around the upcoming NSDL IPO intensifies ahead of its listing on August 6th. The stock has erased the gains it had made earlier this month. CDSL's weak Q1 FY26 earnings and continued margin pressures have added to this drop. Market attention is now focused on how these two SEBI-regulated giants perform in India's capital markets infrastructure space.

CDSL Shares Today

CDSL shares have been under pressure recently, trading at Rs. 1,560.20, down 0.78% today. Over the past 5 days, the stock has slipped 2.34%, while in the last month, it has declined sharply by 12.27%. Despite gaining 15.67% over the past six months, the stock is down 13.74% year-to-date (YTD), possibly linked to rising competition from NSDL's IPO.

HDFC Securities has lowered its revenue and earnings estimates for the next few years and maintains an "ADD" rating on the stock.

"The company expects improvement in the coming quarters, especially if IPO activity picks up. But overall, growth in FY26 is likely to be in the low double digits, and profit margins will remain under pressure due to higher ongoing costs." the report further stated.

CDSL Q1 FY26 Results

CDSL's Q1 FY26 results showed that rising costs are continuing to hurt its profits. The company's net profit dropped 23.6% year-on-year, falling to Rs. 102.4 crore from Rs. 134 crore in Q1 FY25.

While its revenue grew slightly by 0.6% to Rs. 259 crore (up from Rs. 257.4 crore last year), higher operational expenses affected overall profitability. Operating profit (EBITDA) fell by 15.1% to Rs. 130.6 crore, and the EBITDA margin declined sharply from 60% to 50.4%.

This is now the second straight quarter where CDSL has seen a drop in profit, mainly due to increasing expenses and falling margins. In the previous quarter (Q4 FY25), the company's total income had also dropped to Rs. 255.78 crore from Rs. 267.37 crore, while expenses had jumped to Rs. 129.40 crore from Rs. 100.93 crore.

CDSL vs NSDL

India's securities markets rely on two key infrastructure institutions: CDSL (Central Depository Services India Ltd) and NSDL (National Securities Depository Ltd). Both depositories are SEBI-regulated and play a major role in enabling electronic holding and settlement of shares. While their core services are similar, the two differ greatly in terms of business strategy, clientele, profitability, and market share.

Foundation and Promoter Background

NSDL, established in 1996, was India's first depository and is promoted by the National Stock Exchange (NSE) along with major banks like IDBI and UTI. On the other hand, CDSL was founded later in 1999 and is promoted by the Bombay Stock Exchange (BSE) with backing from institutions like SBI, HDFC Bank, Bank of Baroda, and Standard Chartered.

Account Numbers and Client Base

The two depositories differ in demat account formats. NSDL demat IDs start with 'IN' and are 14-character alphanumeric, whereas CDSL accounts have a 16-digit numeric code. More importantly, CDSL has become the preferred choice for retail investors and fintech platforms like Zerodha, Groww, and Upstox, while NSDL is dominant among institutional clients, including mutual funds, foreign investors, and government institutions.

Market Share and Key Metrics

As of 2025, CDSL holds about 15.3 crore demat accounts, capturing around 79% of the market, while NSDL has about 3.95 crore accounts, making up 21%.

Profitability and Revenue Performance

Interestingly, despite lower asset volumes, CDSL is more profitable. In FY25, CDSL reported a Profit After Tax (PAT) of Rs. 526.3 crore with a PAT margin of 48.6% and an impressive ROE of 29.9%. Meanwhile, NSDL posted a PAT of Rs. 343.1 crore, a PAT margin of 22.4%, and an ROE of 17.1%. While NSDL earned more in total revenue (Rs. 1,420 crore vs CDSL's Rs. 1,082 crore),

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