The Institutions which holds the investors' securities (like shares, debentures, & mutual funds) in an electronic form in a Demat account.
Depositories Role
Offer Demat accounts facility.Hold & maintain a record of securities.Make online trading easy.Faster trade settlement.
Depositories in India
National Securities Depository LimitedCentral Depository Services (India) Limited
Comparison of CDSL & NSDL
Incorporated in 1996, NSDL is India's first depository institution, & In February 1999, CDSL was given the certificate of commencement of business.
Clients
CDSL: Zerodha, Groww, Upstox, AngelOne, etc.
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NSDL: Traditional brokers.
Revenue
NSDL: 47.16%CDSL: 52.84%NSDL's revenues are stable, however, CDSL's revenue depends on market activity.
Custody Value
CDSL: 11.61%NSDL: 88.39%NSDL in those terms is 7.6x of CDSL.
Number of Demat Accounts (FY’23)
CDSL: 8.3 croresNSDL: 3.1 croresCDSL’s success depends on discount brokers, who need to innovate to retain traders.
The Regulations
Depositories can't increase the cost of services because of the regulated pricing. So they diversify by entering businesses like KRA, e-insurance repositories, etc.
The Golden Record
India recently set a new record in the World financial market by transitioning to T+1 settlement.