The National Securities Depository Limited (NSDL), whose initial public offer (IPO) will open for subscription on July 30, is looking at ways to engage more with new-age broking firms to improve its market share in the number of demat accounts where it is lagging behind its competitor CDSL.
According to NSDL CEO Vijay Chandok, the depository has already initiated efforts to engage more with all market participants to understand what more they can do as a depository to improve their market share.
"As a part of our approach, we are engaging with all of them ... We are continuously making efforts to engage. Approach is that, you know, what can we do more? What can we do better? How can we make things easier from their problems, points of view, and try and come out with solutions? We believe that's a good way to get engagement, attention and opportunity to, you know, do more business with them," said Chandok, while speaking to Moneycontrol on the sidelines of announcing the company’s IPO.
And you can see in the last six months, there has been an improvement in market share for us in run rate basis so I think this is the effort that we are trying, he added.
Also Read: NSDL IPO: Price band set at Rs 760-800 per share, 22% discount to grey market valuation
This assumes significance as NSDL enjoys market leader status in most segments it competes with CDSL but has a lower market share -- around 20 percent – if the number of demat accounts are taken into consideration.
While NSDL has around 3.94 crore demat accounts, CDSL boasts of 15.9 crore demat accounts. Chandok, however, highlights the fact that while NSDL has just around 20 percent market share in the demat segment, it has around 43 percent share in terms of revenue.
"The demat account … is where we have a 20 percent market share. However, we have a revenue share of about 43 percent approximately in the industry … within the demat segment, we have a more evolved customer, which leads to a better revenue per account. So even (with) the 20 percent market share, in the overall revenue mix we have around almost 43 percent," explained Chandok.
Meanwhile, the depository has fixed a price band of Rs 760 to Rs 800 for its IPO, which is an offer for sale by existing shareholders including NSE, IDBI Bank and Union Bank. The IPO will open for subscription on July 30 and close on August 1.
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