CDSL vs NSDL - How Much Depository Participant (DP) Charges Are You Paying?

Do you know how much you are paying in DP charges? When you invest in stocks, your securities are stored electronically with a Depository Participant (DP) like CDSL (Central Depository Services Limited) or NSDL (National Securities Depository Limited). But did you know that every time you buy or sell shares, you incur DP charges? These fees are charged by the depositories for managing your electronic securities and facilitating transactions. When we look at the DP Charges Breakdown for FY 2024, the following transaction charges were observed between CDSL vs NSDL:  

• CDSL Transaction Charges: ₹221.6 Crores
• NSDL Transaction Charges: ₹308.6 Crores

It is important to understand that, if you place multiple sell orders, DP charges apply for each transaction, which can add up over time. Understanding the fees and breakdown of charges can help investors minimize costs and optimize their trading strategies.

Understand what are depositaries and how do they work in India.
 

Market Share for CDSL and NSDL

Market share is an important indicator of investor preference. Over the years, CDSL has steadily gained market share, surpassing NSDL. When you look at the YoY Market Share Growth, it is observed that:

• In 2018, NSDL led with 54% market share, but CDSL has consistently gained ground.
• By 2024, CDSL now holds a 76% market share, while NSDL has declined to just 24%.
• The shift indicates a growing investor preference for CDSL, possibly due to its lower costs and ease of access.

YoY Market Share Growth

CDSL or NSDL: Who Earns More Per Rupee Spent?

A crucial metric to evaluate a company's efficiency is the revenue-to-expense ratio—how much money it earns for every rupee spent.

• CDSL earns ₹2.6 for every ₹1 spent, making it a more profitable and cost-efficient depository.
• NSDL earns ₹1.4 per ₹1 spent, reflecting a lower efficiency compared to CDSL.

This means that for every rupee invested in operational expenses, CDSL generates nearly double the revenue compared to NSDL.

Also explore what is the difference between CDSL and NSDL?

How Do NSDL and CDSL Make Money?

Both depositories generate revenue through various channels, but their strategies differ significantly.

• Over 50% of NSDL's revenue comes from banking services provided by NSDL Payments Bank Limited.
• This means NSDL is diversifying beyond depository functions into banking, payments, and remittance services.

NSDL Revenue Breakdown (FY24)

CDSL Revenue Breakdown (FY24)

• CDSL focuses more on issuer charges, transaction fees, and IPO-related services.
• Unlike NSDL, CDSL does not have a banking business, keeping its revenue streams more concentrated in depository services.
   

CDSL and NSDL’s Financial Performance

Both NSDL and CDSL play crucial roles in the Indian stock market by handling the electronic storage of shares. However, when it comes to financial performance, they differ significantly.

• NSDL leads in revenue generation with ₹1,365.7 Cr in FY24, primarily driven by its banking services.
• CDSL outperforms in profitability, reporting a profit of ₹419.6 Cr, growing at a CAGR of 29.6% over five years.
   

CDSL vs NSDL: Which Depository Rewards Investors More with Dividends?

For investors, dividend payouts are a key factor when evaluating a company’s shareholder benefits.

• CDSL distributes 54.8% of its profits as dividends, making it an attractive choice for investors seeking regular income.
• NSDL only distributes 7.3% of its profits, indicating a preference for reinvesting earnings rather than rewarding shareholders.

This means that CDSL shareholders receive significantly higher returns compared to NSDL investors.

You can know everything about demat accounts in India here.
 

How to check Depository Charges charged by CDSL and NSDL on INDmoney

DP (Depository Participant) Charges are generally applicable on Delivery Sell Orders. This is charged by the depository and depository participant for debiting shares from your demat account and inter-settlement BTST transactions. This is charged as :

DP charges when buying : ₹ 0

DP charges when selling : ₹ 18.5 + GST per ISIN per Transaction, Male - INR 3.50 (CDSL) + INR 15.00 (INDmoney Charge). Female - INR 3.25 (CDSL) + INR 15.25 (INDmoney Charge)

You can also check the details for how DP charges are calculated under the charges explained section here.

Final Verdict: Which Depository is Better for You?

1. Lower DP Charges – CDSL generally offers lower transaction charges than NSDL, helping investors save on costs.
2. Market Share Dominance – CDSL now controls 76% of the market, indicating increasing investor trust.
3. Higher Profitability – CDSL earns ₹2.6 per ₹1 spent, making it more cost-efficient.
4. Diverse Revenue Streams – NSDL relies heavily on banking services, while CDSL focuses on traditional depository services.
5. Better Dividend Payouts – CDSL rewards shareholders with 54.8% of its profits, while NSDL retains most of its earnings.

If you are looking for a depository with lower costs, higher market share, and better dividends, CDSL appears to be the better choice for most retail investors. However, if you value integrated banking services along with depository functions, NSDL might be a more suitable option.

Disclaimer

Investment in securities market are subject to market risk, read all the documents carefully before investing. The past performance of the stocks are not necessarily indicative of future performance. Registration granted by SEBI, membership of a SEBI recognized supervisory body, and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors INDmoney Private Limited 616, Level 6, Suncity Success Tower, Sector 65, Gurugram, 122005, Research Analyst Registration No. INH000018948.

Note: Data as of FY24
Source: Company filings, Tijori Finance