CDSL won distribution, not the whole market
CDSL held 18.6 crore demat accounts at the end of June 2026, against 4.6 crore at NSDL, SEBI reported. The flow remained similarly uneven: CDSL added 20.9 lakh net accounts during June, while NSDL added 4.8 lakh. That is the clearest evidence that CDSL has won India’s retail account race.
Yet accounts are not customers in the conventional sense. Depositories serve beneficial owners through depository participants, while charging for transactions, issuer services and related infrastructure. An account may be duplicated across brokers or remain inactive. SEBI’s review of 2025-26 recorded 22.5 crore demat accounts but only 12.2 crore unique demat accounts. The difference limits the value of treating every new account as equivalent recurring revenue.
The account lead is real, but account market share is a poor substitute for economic market share. CDSL’s advantage lies in distribution: brokers favour its low-cost, digitally oriented network, giving it the larger funnel through which future transactions may pass. NSDL’s smaller account base contains a greater concentration of institutions, companies and high-value holdings. Those relationships are harder to display in an account tally, but potentially more dependable to monetise.
CDSL owns the larger investor funnel. NSDL sits closer to the assets and issuers that generate recurring fees.
NSDL’s smaller register holds far more value
NSDL’s advantage appears when accounts are replaced by assets. SEBI’s 2025-26 statistics put demat value at ₹477.29 lakh crore for NSDL and ₹77.18 lakh crore for CDSL. NSDL also had 57,037 depository-participant service locations, compared with 19,914 for CDSL, despite CDSL having 585 registered participants against NSDL’s 294.
The figures support the description of NSDL as the more institutionally rooted depository. They do not prove that each rupee in custody is equally profitable. Depository fees depend on service and transaction schedules, not simply market value. But large custodians, foreign portfolio investors and established issuers tend to generate corporate actions, settlement work and continuing issuer-related services. This makes NSDL’s revenue base structurally less reliant on a fresh wave of retail account openings.
NSDL’s position resembles an incumbent utility with embedded institutional links. Large custody balances do not mechanically produce proportionate revenue, and market appreciation can inflate the reported value without increasing activity. Even so, the gap identifies where the two franchises sit. CDSL is more exposed to the frequency with which retail investors trade. NSDL has deeper exposure to issuers and asset pools that require continuing depository infrastructure regardless of retail sentiment.
CDSL’s account growth did not become equivalent profit growth
CDSL opened about 2.71 crore demat accounts in 2025-26 and finished March with 18.01 crore. Its standalone total income rose 11 per cent to ₹1,096 crore. The consolidated picture was weaker: total income increased 3 per cent to ₹1,239 crore, while net profit declined 14 per cent to ₹455 crore.
One reason was outside the core depository. Management reported that CDSL Ventures’ total income fell to ₹198.17 crore from ₹254.94 crore. The result nevertheless exposes a broader point. CDSL’s economic exposure includes transaction charges, online data and know-your-customer services, consolidated account statements, electronic voting and issuer activity. These do not grow in lockstep with registered accounts. The retail franchise gives CDSL more opportunities to sell infrastructure services, but the conversion rate matters more than the gross account count.
CDSL’s FY26 performance shows why account growth should not be capitalised without examining revenue mix. The franchise kept adding investors, yet consolidated profit fell. That does not invalidate its retail strategy. It shows that account acquisition, transaction activity and subsidiary earnings can move in different directions. A retail-heavy depository offers greater upside when participation and turnover rise, but also greater sensitivity when trading activity or capital-market issuance weakens.
The counter-case: retail reach may be the scarcer asset
CDSL’s account dominance could prove more valuable than NSDL’s custody lead. India added 18.8 crore demat accounts between April 2020 and March 2026, SEBI reported. CDSL captured most of the recent additions and ended FY26 with almost twice as many registered depository participants as NSDL. That breadth makes it the natural beneficiary if first-time investors become regular investors.
The account base also supplies optionality that current revenue understates. More active clients can mean additional debit transactions, corporate-action processing, issuer engagement and demand for linked services. NSDL’s institutional relationships are valuable, but established custody pools may grow closer to asset prices than to user numbers. They may also offer fewer opportunities for rapid share gains. On this view, investors should accept more earnings variability at CDSL because its addressable transaction pool is expanding faster.
This is the strongest case against favouring NSDL’s steadier structure. Stability can become stagnation if fees are regulated, institutional clients bargain hard and market infrastructure becomes increasingly interoperable. CDSL’s larger distribution network could create the stronger long-run platform if retail investors deepen their use of equities, bonds and other dematerialised assets. Its operating leverage would then make today’s volatility a feature rather than a defect.
Their valuations should answer different questions
A single multiple based on demat accounts would flatter CDSL and obscure NSDL. The more useful measures are revenue per active account, recurring issuer income, transaction intensity, subsidiary economics and the proportion of earnings produced by interest on cash and investments. Public account totals disclose none of those on their own.
CDSL offers the higher-volume proposition. Its earnings should respond more strongly if retail accounts become active and stay active, but FY26 showed that rapid account growth need not prevent consolidated profit from falling. NSDL offers the steadier proposition because its franchise is anchored more heavily in institutions, issuers and custody. Its risk is that stability receives too high a valuation even when underlying fee growth is modest. The decisive test is whether CDSL can turn its much larger register into recurring operating income faster than NSDL can deepen monetisation of its issuer and institutional relationships.
The appropriate valuation distinction is therefore not growth against value. It is operating leverage against recurrence. CDSL deserves credit for controlling the dominant retail gateway, but not an automatic premium for every account opened. NSDL deserves credit for issuer and institutional relationships, but custody value alone is not revenue and should not be valued as if it were. Investors need evidence from fee income, activity and retention.
Sources
- https://www.sebi.gov.in/sebi_data/attachdocs/jul-2026/1785146584696.pdf
- https://www.sebi.gov.in/reports-and-statistics/publications/aug-2026/Chapter%2004.pdf
- https://www.sebi.gov.in/sebi_data/commondocs/aug-2026/Bulletin%20August%202026_p.xlsx
- https://www.sebi.gov.in/curation/depositories.html
- https://www.cdslindia.com/gujarati/Downloads/About/Media/Financial%20Media%20Release_CDSL%20declares%20financial%20results%20for%20Q4%20and%20FY26.pdf
- https://www.cdslindia.com/downloads/IPO/GeneralMeeting/NSEintimationtranscript_Sign_04052026.pdf
- https://www.cdslindia.com/downloads/InvestorRels/Financial/NSEIntimation_InvestorPresentation.pdf
