Bullish on CDSL because the company sits at the heart of India’s rapidly expanding capital-market ecosystem.

India is witnessing structural growth in demat accounts, mutual fund participation, equity investing, IPOs, ETFs and financialisation of household savings. As more Indians move from traditional savings toward financial assets, NSDL is positioned to benefit from this long-term trend. One of CDSL's biggest strengths is its asset-light, technology-driven business model. Depository businesses benefit from scale, recurring revenue streams and relatively low incremental costs as transaction and account volumes increase. This creates the potential for strong operating leverage as India’s investor base expands. The growth in demat accounts and securities holdings is particularly important. Even if market volumes fluctuate in the short term, the long-term increase in investors and financial assets held in dematerialised form can provide CDSL with a strong structural growth runway. Another key trigger is the continued development of India’s capital markets. Rising retail participation, increasing institutional activity, growth in IPOs and deeper penetration of financial products can all increase the importance of the depository infrastructure. We also like CDSL’s position as a critical market infrastructure institution, which creates significant entry barriers and makes the business difficult to replicate. The key risks are valuation, regulatory changes, competition, market-cycle volatility and slower-than-expected capital-market growth. Therefore, price paid matters. Overall, CDSL offers exposure to one of India’s biggest long-term themes: the financialisation of savings and the expansion of capital-market participation.