Demat Accounts Soar to 196.6 Million, Projected to Hit 200 Million by Mid-July

In May, 2.2 million new demat accounts were opened, bringing the total to 196.6 million. This marks the first monthly increase in new account openings since December 2024, following a steady decline from January through April. Industry experts project the total to surpass the 200-million milestone by mid-July. The stock market rally attracted fresh investors, with Indian equities rising nearly 2% in May, and broader markets outperforming.

The National Securities Depository Limited (NSDL) is set to launch its Initial Public Offering (IPO) later this year, following a significant increase in new demat account openings in May. With 2.2 million new accounts opened, the total number of demat accounts reached 196.6 million, marking the first monthly increase since December 2024. This growth is attributed to the stock market rally and broader market performance, which attracted fresh investors.

NSDL's IPO comes amidst a surge in public issues in 2025, with the company filing an addendum to its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The key highlight of the addendum is a reduction in the IPO size from 57.26 million shares to 50.15 million shares. The addendum provides updated information about NSDL's financial performance, business, and other matters, reflecting the company's commitment to transparency.

NSDL, a pioneer in dematerialisation of securities in Indian capital markets, has seen its revenue grow year-on-year over the past three financial years. In FY24, NSDL reported total revenue from operations of Rs 1,268.24 crore, with depository services contributing 37.3% to the revenue. The company has also consistently rewarded investors with a dividend payout of Rs 20 crore annually.

The company's banking services subsidiary, NSDL Payments Bank (NPBL), plays a significant role in NSDL's revenue, focusing on financial inclusion and providing digital banking solutions. NPBL's range of services includes accepting demand deposits, providing payment and remittance services, and issuing debit and prepaid cards.

In the market, NSDL holds a dominant position compared to Central Depository Services (CDSL). As of December 2024, NSDL had 64,535 issuers, double the number of CDSL's 31,557. NSDL also leads in the number of active instruments and the value of assets held under custody. However, CDSL has a higher number of demat accounts, indicating a different client base portfolio.

Key shareholders, including IDBI Bank and the National Stock Exchange (NSE), will be selling their stakes in the upcoming IPO. IDBI Bank, the largest shareholder, will offload up to 22.22 million shares, while the NSE will sell up to 18 million shares. The stake sale is not just to unlock value but also to comply with SEBI's D&P Regulations, which mandate a dilution of shareholding below 15% by October 13, 2025.

NSDL's IPO is expected to be a significant event in the Indian capital markets, providing investors with an opportunity to participate in the growth of a leading market infrastructure institution.

References:
[1] https://www.financialexpress.com/market/ipo-news-nsdl-ipo-launch-soon-know-nsdl-ipo-gmp-expectation-dhrp-key-highlights-all-details-here-3867244/