Shares of National Securities Depository Ltd (NSDL), India’s oldest and largest depository, made a decent debut on the BSE today, albeit lower than the Street's expectations. The shares were listed at ₹880 on the BSE, a premium of 10% over the initial public offering (IPO) price of ₹800 apiece, with a market capitalisation of ₹17,600 crore.

Ahead of the listing, NSDL shares were commanding a grey market premium (GMP) of ₹125 in the unlisted market, indicating a listing price of around ₹925, up 15.6% over the issue price of ₹800 apiece.

Meanwhile, shares of NSDL rival Central Depository Services India Limited (CDSL) were trading 1.2% lower at ₹1,546.80, while its market capitalisation dropped to ₹32,328 crore. On the other hand, the BSE Sensex and the NSE Nifty were trading marginally lower.

In a pre-listing preview, Prashanth Tapse, Senior VP (Research) at Mehta Equities, had said, “Given the strong subscription levels and current market sentiment, we expect a decent listing gain in the range of 12–15% or higher for NSDL, depending on listing day mood.”

Tapse had said that beyond the short-term listing pop, NSDL represents a compelling long-term proxy play on the growth of institutional participation in the Indian capital markets. He recommended allotted investors to ‘hold’ the stock for long-term perspective while non-allotted investors can ‘wait and watch’ for potential post-listing dip opportunity to enter.

NSDL IPO subscribed 41 times

The ₹4,011.60-crore IPO of NSDL was subscribed 41.02 times, receiving bids for more than 144 crore shares worth ₹1.15 lakh crore against 3.51 crore shares offered. The public issue was subscribed 103.97 times in the qualified institutional buyer (QIB) segment, followed by 34.98 times in the non-institutional investor (NII) segment. The quota reserved for retail investors was booked 7.76 times, while the employee portion was subscribed 15.42 times.

The NSDL IPO was completely an offer for sale of 5.01 crore shares at an issue price of ₹800 per share by existing shareholders, including IDBI Bank, NSE, SBI, HDFC Bank, Union Bank of India, Canara Bank, and others. At this price, the company’s market capitalisation was pegged at ₹16,000 crore.

Under the OFS, IDBI Bank offloaded 2.22 crore shares, while the National Stock Exchange (NSE) sold 1.80 crore shares. Additionally, State Bank of India (SBI), HDFC Bank, and Union Bank of India put 40 lakh, 20 lakh, and 5 lakh shares, respectively, on the block. The Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) sold 34.15 lakh shares. Collectively, these six entities own 14.54 crore shares in NSDL, representing 72.70% of the company’s total equity base.

Institutional investors generated returns of up to 400x

All these institutional investors made massive profits from their early investments in NSDL. Early investors such as SBI, IDBI Bank, Union Bank, and NSE are expected to get up to 400 times return on their original investment.

SBI, which invested ₹80 lakh in NSDL at ₹2 per share, has offloaded 40 lakh shares at ₹800 per share. The country’s largest lender is poised to receive ₹320 crore in proceeds against its original investment, generating a massive return of 39,900%.

Similarly, IDBI Bank also sold 2.22 crore shares purchased at ₹2 each, which will translate into an initial investment of ₹4.44 crore yielding ₹1,776 crore, making an equally staggering 39,900% return.

NSE, which had acquired a 24% stake in NSDL at an average cost of ₹12.28 per share, is the biggest beneficiary among early investors. The exchange’s ₹59 crore investment is now valued at ₹3,840 crore, amounting to a massive return of 6,415%.

Meanwhile, Union Bank of India is expected to earn ₹40 crore on its original investment of ₹26 lakh, generating a 15,000% return. In a similar trend, HDFC Bank, which invested ₹108 crore, will receive ₹139 crore, resulting in a 638% return, while Canara Bank’s ₹68.3 crore investment has grown to ₹273 crore, yielding a 300% return. SUUTI, with a relatively modest investment of ₹68.3 lakh, will receive ₹273.2 crore, getting a robust return of 3,900%.

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