The depository sector has witnessed a stark divergence in FY27 performance, with CDSL gaining 13% while NSDL declined 7% in the same period. According to Business Standard, NSDL hit a fresh lifetime low at ₹734.50 on Friday, shedding 7% in FY27 and declining 48% from its peak. In contrast, CDSL advanced 0.5% to ₹1,264 on Friday, though it remains 38% below its December 2025 summit of ₹1,973.88. The BSE Sensex and NSE Nifty were up 0.6% and 0.8% respectively in the same period, highlighting the sector-specific nature of this divergence.
India's strong primary-market activity is expected to provide a significant boost to CDSL and NSDL's Q2 FY27 earnings, even as subdued secondary-market activity weighs on transaction revenues. According to Nuvama Institutional Equities, ₹92,600 crore was raised in Q2 FY27, up 9.8 times sequentially, with mainboard IPOs raising a record ₹94,205 crore between April and September 2026. The brokerage expects IPO-linked income, annual issuer services, new demat accounts and corporate actions to support the depositories during the September quarter. Demat account additions are expected to improve, averaging around 2.5 million a month in July and August, compared with 1.9 million in Q1 FY27, representing a 31.3% sequential increase. Nuvama expects Q2 cash and delivery average daily traded volumes (ADTV) to decline 14.1% and 1.7% respectively sequentially, though this is likely to be offset by the sharp revival in primary-market activity.
Despite positive earnings triggers, CDSL's near-term technical setup remains under pressure. According to SBI Securities's Sudeep Shah, CDSL recently broke below the ₹1,300–1,290 major swing-low zone on the daily chart and has since drifted lower. The DI- remains well above DI+ on the ADX indicator, pointing to strong bearish control. The bearish bias is likely to remain intact as long as the stock trades below the ₹1,300–1,290 zone. Shah noted that the DI- remains well above DI+ on the ADX indicator, pointing to strong bearish control.
The divergent performance reflects changing market dynamics and competitive positioning within the depository sector. As per SBI Securities's Sunny Agrawal, the stark divergence between NSDL and CDSL since IPO is majorly due to euphoria around the Capital Markets theme moderating in the last two years, resulting in valuation de-rating. The pace of demat account additions has moderated considerably, with average monthly new demat account additions declining to 27.1 lakh in CY26 from a peak of 38.4 lakh in CY24. Agrawal notes that CDSL's strong relationship with retail brokers helps translate into strong growth and market share (~80 per cent in CY26) against NSDL. This retail focus positions CDSL better to capitalize on the current IPO wave, with IPO and corporate-action income expected to rise sharply from ₹27 crore in Q1 FY27.
While IPO activity could provide a lift to Q2 numbers, Wealth1's Naren Agarwal noted that IPO activity alone is unlikely to drive a sustained earnings recovery. The impact is likely to be uneven, with CDSL accounting for the bulk of August's demat additions at 27.4 lakh accounts compared with 5.3 lakh for NSDL. Motilal Oswal Financial Services expects CDSL's transaction revenue to decline due to lower cash-market activity, though online data-charge revenue is expected to recover following recent pricing changes. For investors, the key focus should be on sustained growth in secondary-market volumes, new demat accounts and recurring issuer revenues rather than single strong IPO-led quarters. Agarwal pointed to CDSL's Q1 performance, in which IPO and corporate action revenue increased 29% year-on-year, though he emphasized that annual issuer fees and transaction charges remain more important than one-off listing-related income as recurring revenue streams.
