Investors of National Securities Depository Ltd (NSDL) have been taken aback after the company announced its initial public offering (IPO) price band at a steep discount to its prevailing unlisted market valuation.

NSDL has set its IPO price band at Rs 760–800 per share, which represents a sharp 22 percent markdown from its current unlisted market price of Rs 1,025 per share. At the upper end of the band, the company’s market capitalisation is estimated at around Rs 16,000 crore.

Shares of NSDL, which were trading at Rs 1,025 in the unlisted market, have already witnessed a 20 percent correction from their recent peak of Rs 1,275 seen on June 12, 2025. This pricing move has echoed similar trends seen in other IPOs, where companies such as HDB Financial Services, Tata Technologies, AGS Transact, UTI Asset Management Company, and PB Fintech have opted to price their issues below unlisted market expectations.

Market experts are urging investors to exercise caution when investing in the unlisted space solely based on IPO anticipation. The unlisted market, they warn, is inherently volatile and suited for long-term investors with a high-risk appetite. True value creation in this space often requires entry at early stages—typically two to three years ahead of the IPO—at reasonably discounted valuations. When the unlisted price offers no meaningful discount to expected IPO levels, the investment case becomes significantly weaker.

Upcoming IPOs, including those of Tata Capital, Hero Fincap, and the National Stock Exchange (NSE), are also likely to follow conservative pricing strategies, according to analysts. Notably, NSE’s unlisted shares have declined by over 8 percent in the last month alone, now trading at around Rs 2,225 per share.

Similarly, Tata Capital has seen a 20 percent correction over the past two months, with its shares now trading at Rs 865 in the unlisted market. Interestingly, the company recently valued its rights issue at Rs 343 per share, which is 2.75 times lower than the prevailing unlisted price. Hero Fincorp has also seen a notable drop, with its share price falling over 15 percent to Rs 1,495 from Rs 1,750 at the beginning of June.

NSDL’s IPO will open for subscription on July 30 and close on August 1, with anchor investor participation beginning on July 29. The issue which is a pure offer for sale aims to raise around Rs 4,011 crore.

While the pricing disappointed some retail investors, NSDL’s early stakeholders are poised to reap extraordinary gains. IDBI Bank, which holds a 26 percent stake (5.22 crore shares) in NSDL, had acquired its holding at an average cost of Rs 2 per share, translating into a staggering return of over 39,000 percent—with its stake now valued at Rs 4,176 crore, up from an initial investment of Rs 10.44 crore.

Similarly, NSE’s 24 percent stake (4.8 crore shares), acquired at an average price of Rs 12.28 per share, is now worth Rs 3,840 crore, a significant appreciation from its original cost of Rs 59 crore. The government’s stake, held through SUUTI, has surged from Rs 2.73 crore to Rs 1,093 crore, also based on a weighted average acquisition price of Rs 2 per share.

HDFC Bank and SBI, holding 8 percent and 5 percent respectively, have also realised significant paper gains. HDFC Bank’s average acquisition cost of Rs 108.29 per share has turned into a stake valued at Rs 1,273 crore, while SBI’s stake—acquired at Rs 2 per share—now stands at Rs 800 crore. Union Bank of India has also seen its investment of around Rs 7 crore (at Rs 5.20 per share) swell to Rs 450 crore.