Equirus Sec initiates coverage on CDSL with 'Add'; cautious on NSDL

CDSL has historically traded at a 10-30 per cent premium to capital market peers. Conversely, NSDL has traded at a 15-20 per cent discount to CDSL

Equirus Securities has assumed coverage on Indian depositories— Central Depository Services (CDSL) and National Securities Depository (NSDL). The brokerage has given an ‘Add’ rating to CDSL with a target of ₹1,675 and ‘Short’ to NSDL with a target price of ₹950. 

Shares of NSDL were listed on BSE on August 7, 2025, at ₹880, a 10 per cent premium to its issue price of ₹800, while  CDSL shares were listed in 2017.  At 10:01 AM, NSDL shares were trading 1.06 per cent higher at ₹1305.6 per share on BSE and CDSL shares were up 1.12 per cent higher at ₹1,549 per share on the National Stock Exchange (NSE). In comparison, BSE was up 0.23 per cent at 81,738.27 and NSE was trading at 25,070.7. 

CDSL vs NSDL: Valuations

CDSL has historically traded at a 10–30 per cent premium to capital market peers (BSE, KFintech, CAMS, HDFC AMC, Prudent), according to Equirus analysis. Conversely, NSDL has traded at a 15–20 per cent discount to CDSL.

CDSL vs NSDL: Demat account market share

Back in FY16, CDSL lagged with a 43 per cent market share in demat accounts, as against NSDL’s dominance. However, a structural shift in retail participation – driven by the rise of digital brokers – significantly altered the landscape. The share of digital brokers in National Stock Exchange (NSE) active clients surged sharply from 11 per cent in FY16 to 71 per cent in July 2025, making CDSL the key beneficiary, according to the brokerage.

 

Digital brokers favoured CDSL for its tech flexibility and API-driven architecture, making it the biggest beneficiary. As a result, CDSL’s demat share expanded from 43 per cent in FY16 to 80 per cent in FY25, with incremental market share rising to 91 per cent in FY25 as against 8 per cent in FY16. This shift also lifted CDSL’s revenue share to 58 per cent in FY25, as against 46 per cent in FY15 and 40 per cent in FY20.

 

That said, given its large retail base, CDSL’s average revenue per account (₹60–65) is materially lower than NSDL’s ₹140–160.  ALSO READ | Analysts see 23% upside in Pidilite Industries; retain 'Buy'; do you own?

Why has Equirus Securities initiated coverage on depositories?

Strong moat from booming demat base

India’s demat base crossed 200 million in July 2025, growing at a 37 per cent compound annual growth rate (CAGR) over FY21-FY25, while the NSE500 shareholder base expanded at a 15 per cent CAGR over FY22-FY25. This strong growth in demat accounts, according to Equirus Securities, creates strong and recurring revenue streams for depositories. 

 

Further, annual issuer charges offer stable income as long as investors stay invested, while transaction charges tie revenues to capital market activity. Depositories also offer value-added services such as e-voting, e-CAS, and initial public offering (IPO)/corporate action services, which add incremental revenues. 

Industry tailwinds remain robust

Capital markets remain hugely under-penetrated as out of 1.4 billion Indians (780 million PAN holders), there are only 200 million demat accounts, 118 million unique PANs on NSE, and 47 million NSE active clients, the brokerage noted. It forecasts profit after tax (PAT) CAGR of 15 per cent for CDSL (on a high FY25 base) and 14 per cent for NSDL over FY25–28E.