CDSL Shares Fall 1% Amid Weekly 13% Slide as NSDL IPO Sparks Shift

“CDSL Slide”: A Look at the Weekly Performance

As of July 31, 2025, CDSL’s stock closed at ₹1,497, reflecting a daily dip of around 1.75%. However, the more concerning trend for the company’s investors is the substantial “13% weekly fall.” This sharp correction comes despite CDSL’s strong performance over the past year, which saw its share price rise by over 23%.

Market analysts point out that CDSL has historically traded at a premium valuation, with a Price-to-Earnings (P/E) ratio of around 63.9 and a Price-to-Book (P/B) ratio of 17.84. While the company has demonstrated robust financial growth, including a 32.18% annual revenue growth over the last five years, the emergence of a direct competitor in the listed space is naturally leading to a reassessment of its premium.

The “CDSL share price” movement suggests that investors are factoring in the increased competition and the potential for a more balanced market share distribution in the future.

“NSDL IPO Impact”: Drawing Investor Attention

The “NSDL IPO” opened for public subscription on July 30, 2025, and is set to close on August 1, 2025. The company aims to raise ₹4,011.6 crore through an Offer for Sale (OFS) of 5.01 crore shares, priced in a band of ₹760 to ₹800 per share. NSDL, India’s first and largest depository by assets under custody, has garnered significant attention from institutional and retail investors alike.

Key highlights of the NSDL IPO include:

• Strong Institutional Backing: The IPO is backed by marquee stakeholders such as SBI, IDBI Bank, NSE, HDFC Bank, and Union Bank of India, who are offloading part of their holdings.
• Anchor Investor Response: NSDL successfully raised ₹1,201 crore from 61 anchor investors on July 29, indicating strong institutional confidence.
• Valuation: At the upper price band of ₹800, NSDL is valued at a P/E ratio of approximately 46.6 times based on FY25 earnings. This is notably lower than CDSL’s P/E of around 68 times, suggesting a more attractive entry point for investors.

The “NSDL IPO impact” on CDSL is evident. Investors are likely rebalancing their portfolios, shifting some capital towards the new listing, which offers a potentially discounted opportunity in a similar business segment. This re-allocation of funds contributes directly to the “CDSL slide.”

“CDSL Valuation” vs. NSDL: A Shifting Dynamic in “India Depos”

The emergence of NSDL as a publicly traded entity has brought the “CDSL valuation” into sharper focus. While CDSL has historically dominated the retail investor segment with a significantly higher number of demat accounts (15.3 crore vs. NSDL’s 3.95 crore as of March 2025), NSDL holds a substantially larger demat custody value (₹464.2 lakh crore vs. CDSL’s ₹70.5 lakh crore), reflecting its strong institutional client base.

Despite NSDL’s higher revenue (₹1,535.19 crore in FY25 compared to CDSL’s ₹1,199 crore), CDSL has maintained higher profitability margins (around 48% vs. NSDL’s 22%), primarily due to its leaner operational model and greater scalability driven by retail participation. This difference in profitability has historically justified CDSL’s higher valuation multiples.

However, with NSDL now available at a lower valuation, some investors might see it as a more value-oriented play, especially given its institutional depth and dominant share in high-value securities. This changing sentiment is contributing to the “CDSL slide” as the market adjusts to the presence of two strong, publicly listed players in the “India depos” space. Both depositories are critical pillars of India’s capital market infrastructure, and their long-term growth prospects remain promising, driven by increasing financialization of savings.