Annual Report: 2023
Safeguarding Investments, Powering Growth. NSDL's 2022-23 Annual Report highlights its role as a steadfast guardian in the capital markets, ensuring safety and security for all stakeholders through cutting-edge technology. As of March 31, 2023, NSDL is the largest depository in India.
Corporate Overview:
NSDL, a SEBI-registered Market Infrastructure Institution (MII), offers various products and services in India's capital markets. Since November 1996, it has pioneered the dematerialization of securities. It facilitates holding securities in digital form through Demat Accounts held via Depository Participants, covering equities, mutual funds, debt instruments, and electronic gold receipts. NSDL operates a centralized digital book-keeping system, maintaining ownership records on behalf of issuer entities and providing services to various market participants. Its core depository services generate recurring revenue through annual custody fees and maintenance charges. NSDL leverages its technological infrastructure to offer additional products, e-services, and value-added services through its subsidiaries, NDML and NPBL.
Key facts include its establishment in 1996, over 59,000 investor service centers, $4 trillion in custody value, and holding over 99% of Foreign Portfolio Investment (FPI) operating in India. Core functions revolve around record-keeping, facilitating asset servicing, and managing ownership transfers.
NSDL provides e-services like SPEED-e for delivery instructions and IDeAS for viewing instructions and holdings, as well as value-added services such as DPM Plus for nomination and KYC updates. It offers issuer service offerings including e-AGM and e-Voting for shareholder participation, an online CP Issuance Platform, and a blockchain-based solution for security and covenant monitoring. Digital integrations include Digital LAS for secure pledging and Demat Account Validation.
Financial Performance:
The report includes a financial performance overview. The following data is presented within the document:
Milestones & Recent Developments:
Key milestones include commencing dematerialization in 1996, launching SPEED-e in 2001, introducing T+2 settlement in 2003, launching IDEAS in 2004, crossing $1 trillion in dematerialized form value in 2007, launching FPI regime in 2014, being awarded CSD of the Year in 2017, crossing ₹300 lakhs crores in dematerialized form value in 2021, and launching a blockchain-based market platform in 2022. The report also notes that the Market ka Eklavya program had over 250 programmes in 2023, and the launch of T+1 rolling settlement cycle in equity market.
MD & CEO Message:
Padmaja Chunduru, MD & CEO, highlights India's growth story and NSDL's role. Revenue from Operations increased to ₹409.17 crores, and Profit Before Tax increased to ₹271.68 crores. Active Demat Accounts increased to 3.15 crores, and total issuers went up to 40,987. NSDL services 99.99% of the value of Equity, Debt and other securities held by FPIs in dematerialized form and holds ₹43,060.50 billion in custody for individuals and HUFs. Market share in value of listed Corporate Debt securities in custody was 97.84%. Under the SEBI initiative for Corporate Bonds, the DLT Blockchain-based platform picked up steam during the year. NSDL focused on optimizing systems, improving vendor engagement, and embracing new technologies. The Primary data Centre was shifted to a professionally managed DC. The company added Instagram to social media platforms. The Market Ka Eklavya (MKE) program has spread across India, reaching over 16000 students and is focused on social responsibility with health & livelihood programs, skill development programs, education, environmental sustainability and rural development. NDML achieved a Profit After Tax of ₹32.99 crores, and NPBL registered a Profit After Tax of ₹8.06 crores. The Group achieved revenue from operations of ₹1021.99 crores and PAT of ₹234.81 crores. HRMS has been implemented to improve employee experience.
Corporate Social Responsibility:
NSDL undertakes various CSR initiatives focused on education, health, skill development, environmental sustainability, rural development, and disaster relief. This includes Project Artha Samarth for skills training, Project SAMEIP for differently abled individuals, Project Sanjeevani for mobile medical units, Project Yogdaan for thalassemia patients, Eye Care for salt-pan workers, Night School Transformation Programme for underprivileged students, and school kits for students through "Chalo School Chale".
Investor Education and Awareness:
NSDL strives to educate the investor community, including retail investors, corporate employees, students, and others, by conducting programs in various languages on investor-related topics. It launched Market Ka Eklavya (MKE) to educate students about financial planning and reaches remote locations. During 2022-23, the organization conducted 1,088 investor awareness programmes with over 97,000 participants, and used social media for spreading investor awareness.
Management Discussion and Analysis:
NSDL holds a variety of asset classes in demat accounts including equities, funds, debt instruments, and e-gold receipts. A slab-wise fee structure incentivizes depository participants. The number of companies opting for dematerialization continues to increase, totaling 40,987 listed & unlisted companies live at NSDL as of March 2023. Custody value as of March 31, 2023 was approximately 84% and 88% of total securities in terms of numbers and values, respectively. Value of shares settled in demat form at NSDL was ₹49,603 billion in 2022-23 and quantity of shares settled in demat was 169 billion in 2022-23. NSDL has almost 97% market share of the industry in demat value of debt securities and implemented Hadoop for data processing, plus several upgradations and enhancements to their various systems. As on March 31, 2023, 30.01 million investors were registered for TRADES (Transaction Related Alerts of Demat account received through SMS), and Cybersecurity initiatives are ongoing. Key regulatory implementations include Block Mechanism and Pay-in Validation. Business initiatives and progress include operations in GIFT City (IFSC), NSDL Mobile App enhancements, and NSDL Consolidated Account Statement (CAS) enhancements. Number of demat accounts increased to 4.76 crore during the year, with 3.15 crore being active accounts. The report also includes detail on Foreign Portfolio Investors (FPIs), its Assets Under Custody (AUC), and its Net Investment.
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