National Securities Depository Ltd Management Discussions

The past year has been a period of significant progress and transformation for NSDL. Since our inception, NSDL has been dedicated to empowering India s financial market ecosystem by collaborating closely with regulators to drive initiatives that make investing safer, simpler, and more efficient. Our decades of experience and use of cutting-edge technology have been instrumental in this journey. As a Market Infrastructure Institution (MII), NSDL continues to play a pivotal role by offering a comprehensive suite of products and services that facilitate the digital management and holding of various asset classes.

During FY 2025-26, NSDL continued to strengthen its digital infrastructure and enhance market accessibility through several key technology-driven initiatives. The Company enabled automation of Value-Free Transfers (VFTs) of Government Securities through API integration with RBIs eKuber platform, CCIL and depositories, facilitating seamless and efficient settlement processes. NSDL also launched a Unified Digital Portal for Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs) , providing a single-window platform for registration, compliance, and onboarding services. Further, to support evolving regulatory requirements, NSDL introduced a digital facility for submission of Form 121 declarations under Section 393(6) of the Income-tax Act, 2025 , enabling eligible investors to avail specified tax-related benefits through a streamlined electronic process. Additionally, the SPEED-e platform was enhanced to allow password-based users to submit off-market transfer instructions online with OTP-based authentication , thereby improving convenience, security, and operational efficiency for investors. Collectively, these initiatives underscore NSDL s commitment to innovation, automation, regulatory compliance, and superior stakeholder experience.

1. HIGHLIGHTS

I. Our Overall Performance

The company continued with its steady growth with the Revenue from Operations increasing to 704.71 Crore in FY 2025-26 from 618.63 Crore in FY 2024-25, registering a Y-o-Y growth of 13.92%. The Total income of the company increased to 835.14 Crore in FY 2025-26 from 731.41 Crore in FY 2024-25 registering a growth of 14.18% and the Profit after Tax increased to 360.60 Crore in FY 2025-26 from 321.62 Crore in FY 2024-25, a Y-o-Y growth of 12.12%.

The Subsidiary companies of NSDL, i.e. NSDL Database Management Limited (NDML) and NSDL Payments Bank Ltd., have also delivered strong financial performance during the year. In FY 2025-26, NDML achieved a total income of 96.88 Crore and Profit after Tax of 26.85 Crore. NSDL Payments Bank achieved a total income of 747.88 Crore with PAT of 15.19 Crore. Overall, the Group achieved 1,529.96 Crore revenue from operations (Y-o-Y growth of 7.73%), total income of 1,660.16 Crore (Y-o-Y growth of 8.14%) and PAT of 380.01 Crore (Y-o-Y growth of 10.75%). This is the highest ever revenue and profit in 30 Year history of NSDL.

II. Custody Value

The value of assets under NSDL Custody ( AUC ) continued to grow and as of March 31, 2026, such value of assets stood at 477.29 Lakh Crore, representing 86% overall market share. The market share of NSDL in AUC of individuals at 69.14 Lakh Crore is 66% and that of NRIs at 4.33 Lakh Crore is 83%.

III. Debt Securities

Debt Securities NSDL commands over 96.54% of the market share in the demat value of debt securities (both listed and unlisted) as of March 31, 2026. In respect of listed corporate debt securities, NSDL holds a market share of 98.06%, with a custody value of 44.38 Lakh Crore as of March 31, 2026.

IV. Issuers

We continue to maintain our lead in the aspect of dematerialisation of securities. As of March 2026, 1,11,379 listed-and-unlisted companies have dematerialised their securities through NSDL, up from 79,773 as of March 31, 2025, reflecting a growth of 39.62%.

V. Settlement Value and Volume

During the year under review, the value of securities settled in NSDL in dematerialised form was t 96.76 Lakh Crore, compared to Rs. 103.22 Lakh Crore in the previous year. The volume of shares settled was 26,382 Crore.

VI. Client Accounts

During FY 2025-26, NSDL added Rs. 59.33 Lakh new demat accounts, while 9.96 Lakh accounts were closed during the year. On a net basis, the active demat account base increased by 49.37 Lakh accounts. Consequently, the total number of active demat accounts with the NSDL Depository stood at Rs. 4.44 Crore as of March 31, 2026, compared to t 3.95 Crore as of March 31, 2025.

VII. Dematerialisation of Securities

As of March 31, 2026, the number of securities dematerialised t 5.97 Lakh Crore, up from Rs. 4.76 Lakh Crore on March 31, 2025, reflecting a growth of over 25.21% as compared to the previous year.

VIII. Corporate Actions

The Corporate Action (CA) service of NSDL has been extensively used by issuers for distribution of securities in the form of IPOs, bonus issues, rights issues, ESOPs etc. which are dealt electronically. In FY 2025-26, the total number of corporate actions reached 9,00,023, a growth of around 14.13% from the previous year s 7,88,623. The number of securities credited or debited through corporate actions was 1,78,631 Crore compared to 1,32,215 Crore in the previous year.

IX. Depository Participants

As of March 31, 2026, there were 311 Depository Participants, who provided depository services from over 57,037 service centres and branches in more than 2,060 cities and towns in India.

The category-wise break-up of Participants is as follows (as of March 31, 2026)

	Total no. of Participants
1. Bank	41
2. Clearing Corporation/Clearing House	3
3. Custodian	7
4. Financial Services Company
5. Foreign Bank
6. NBFC	2
7. Registrar & Transfer Agent
8. Stock Broker
Total	311*

*Includes 26 Participants under closure/termination process whose SEBI registration is not yet cancelled/suspended.

2. REGULATORY UPDATES

As an MII, it is NSDL s responsibility to meet various regulatory requirements, a sine quo non, to maintain market integrity and protect investors interests. During FY 2025-26, we implemented several initiatives, including those placed below:

i. Client Maintenance and Demat Account holder centric initiatives:

As per various recommendations and advisories from

SEBI to provide ease of doing business to the depository participants (DPs) and ease of doing investments for the investors, the Client Maintenance module has been enhanced regularly during FY 2025-26:

• Facility to avail Consolidated Account Statement (CAS) and Statement of Holding and Transactions from DigiLocker Platform was introduced in April 2025.

• Facility to opt-out of BSDA Service was introduced in April, 2025.

• Facility to open demat accounts for AoPs (Association of Persons) in the name of natural persons and facility for capturing the Principal Officer of AoP with validations as prescribed by SEBI Circular No. SEBI/ HO/MRD/PoD1/CIR/P/2025/24 dated February 25, 2025 was introduced in June, 2025.

• Facility to view and vote basis Proxy Advisors recommendations in eVoting Application was introduced in July 2025.

• Facility to open HUF account jointly with maximum 2 individual(s) was introduced in December 2025.

• Facility to mark demat account as To Be Closed in respect of account closure being initiated cannot be processed due to Illiquid, Suspended or Delisted securities in the demat account was introduced in December 2025. In accordance with SEBI Advisory, Participants were advised not to charge AMC to the clients in respect of demat account of the client(s) who has/have given an Account Closure request and have ISIN(s) which is/are in suspended status or illiquid or delisted for trading viz., having no economic value.

• Facility to categorise GS-FPI Flag in the demat account opened for FPIs investing exclusively in Government Securities was introduced in February 2026.

ii. Margin obligations to be given by way of Pledge/ Re-pledge in the Depository System:

NSDL successfully implemented the invocation and sale as a combined automated process on October 10, 2025, under the guidance of SEBI. This initiative has benefited the secondary market by facilitating ease of doing business as well as safeguarding the interest of investors.

iii. Enhancement for enabling market transfers (both intra and inter depository transfers) of SGBs to eligible investor categories:

NSDL, in accordance with RBI and SEBI guidelines, enabled the transfers of Government Securities (including SGBs) from/to RDG account maintained with CCIL to/from demat account maintained with NSDL. The depository system has been enhanced on December 12, 2025 with API based integration with CCIL and Depository systems to provide seamless transfer of Government Securities and bring operational efficiencies in reconciliation of general ledgers of NSDL, CDSL and CCIL maintained in RBI s standardised eKUBBER system.

iv. Resources Committed Towards Regulatory

Functions

Pursuant to Regulation 29(1) of the SEBI (Depositories and Participants) Regulations, 2018, the Company has segregated its functions under three verticals i.e. (i) Critical Operations, (ii) Regulatory, Compliance, Risk Management and Investor Grievances; (iii) Other functions including business development.

The Company, has incurred direct and indirect expenses of 10907.63 Lakh in FY 2025-26 for resources committed towards strengthening of regulatory functions and ensuring compliance with the regulatory requirements as per activity-based accounting method.

This comprises 5,287.73 Lakh towards human resource expenses pertaining to 163 employees, 3550.34 Lakh towards Technology expense and 2,069.56 Lakh towards other financial resources.

v. NSDL Launches Common Contract Notes on STP Gateway STeADY

Under the aegis of SEBI, with effect from June 27, 2025, NSDL has launched the Common Contract Notes (CCN) facility on its Straight Through Processing (STP) Gateway platform STeADY (Securities Trading easy Access and Delivery).

STeADY is a robust STP platform that facilitates seamless upload and download of contract notes, as well as submission of trade confirmations and instructions by market participants such as Trading Members, Fund Managers, and Custodians.

With the implementation of CCN, all trades executed across multiple exchanges are now consolidated into a single contract note. Prior to this, separate trade confirmations/contract notes were uploaded by Trading Members for each exchange, which posed challenges in:

• Complex post-trade reconciliation

• Increased settlement risks

• Regulatory compliance difficulties

Benefits of CCN Implementation

• Simplified Post-Trade Processes: Streamlined back-office reconciliation and reporting for all stakeholders

• Enhanced Transparency: A all trades executed by an investor across exchanges structural change undertaken

• Improved Efficiency: A single Volume Weighted Average Price (VWAP) across trades, aiding in accurate reporting and compliance

• Operational Ease for Fund Managers & Custodians: Facilitates efficient trade matching and settlement

This initiative marks a significant step in modernizing India s securities market infrastructure by enhancing post-trade transparency and operational

3. TECHNOLOGY

Technology remained a key enabler of NSDL s growth, operational resilience and service excellence during the year. The Company s technology agenda was organised around five priorities: strengthening operational resilience, supporting regulatory and market enablement, building organisational capacity, advancing business transformation through platform APIfication, and piloting AI-led innovation in a controlled, governed manner. This approach allowed NSDL to make measurable progress on near-term stability and compliance commitments while laying deliberate groundwork for longer-term digital and AI-enabled capability, rather than pursuing transformation at the expense of control.

1. Operational Resilience and Modernisation

Several initiatives progressed across resiliency, regulatory programmes, technology upgrades and modernisation. Infrastructure capacity augmentation, EOD-BOD process optimisation, observability improvements and isolated environment arrangements were implemented and are now operational, contributing to a more resilient and better-controlled technology environment. These measures have improved readiness for peak processing periods and given operations teams clearer monitoring visibility. Modernisation is an ongoing, multi-year programme; the initiatives completed this year represent incremental, verifiable improvements as part of NSDL s transformation journey, and further capacity and resilience work is planned for the coming year based on observed volume growth.

2. Regulatory and Market Enablement

NSDL supported a wide range of regulatory and business-enablement programmes during the year, including Direct Payout, Common Contract Note, Margin Pledge EPI cum Invocation and Closure, enhancements to the Unified App, API enablement for G-Sec Demat and Remat, the FPI Portal revamp, Form 15G/15H implementation, Nomination Phase I and II, NDML KYC Registration Agency integration, the SEBI Inspection Portal, Account Aggregator and DigiLocker integration, shareholding pattern-related enhancements, and Demat/Remat support for Letter of Credit. Each of these was delivered to meet a specific regulatory timeline or market requirement, and collectively they have improved compliance readiness and simplified market participant interactions. document capturing

3. Business Transformation

The most significant year was the start of NSDL s APIfication programme, intended to expose account management, depository transactions and reporting functions through a consistent, governed API layer in addition to the existing integration channels offered to the business partners. During the year, the Company defined the target API architecture, established API governance and gateway standards, and delivered an initial set of APIs covering account management, transaction processing and reporting. This is a multi-year programme: the current . scope covers priority workflows only and extending coverage to the full range of depository transactions and reports, along with broader participant onboarding, is planned over the next several years. Benefits such as reduced integration effort for market participants and improved straight-through processing are expected to accrue progressively as adoption widens.

4. AI-led Innovation

NSDL took a deliberately measured approach to AI adoption this year, prioritising governance ahead of scale. An AI governance framework and AI policy were established to define use cases, data-handling requirements, model risk controls and review processes; this framework serves as the guardrail through which all AI initiatives are evaluated before wider deployment.

Within this framework, two categories of work progressed:

• New-product exploration in fraud and surveillance: early-stage AI capabilities aimed at strengthening anomaly detection and surveillance in depository operations were developed and are being evaluated; these remain at a proof-of-concept or limited-pilot stage and have not yet been deployed at production scale.

• Productivity and automation: proof-of-concept pilots for AI-assisted code development and AI-assisted test automation were completed successfully within defined teams, demonstrating measurable efficiency gains on the specific tasks piloted. Broader rollout across engineering teams is planned in a phased manner, informed by the outcomes and lessons of these pilots rather than assumed in advance.

This governance-first sequencing reflects a considered view that AI adoption in a depository environment must balance innovation with security, data protection and operational risk, and that scaling should follow, not precede, demonstrated control.

5. Organizational Capacity Building

NSDL continued to invest in building internal technology capacity. Technology teams undertook focused learning across ITIL, CRISC, DPDP, GenAI, information security awareness, Red Hat OpenShift, MongoDB, Kong API Gateway and strategic technology leadership programmes. This has strengthened the organisation s internal capability to manage modern, secure and API-led platforms, and reduces reliance on external expertise for day-to-day operations of these platforms. Capacity building is treated as a continuing programme rather than a one-time activity, with training plans reviewed periodically against the skills the technology roadmap will require.

Future Outlook

Looking ahead, NSDL s technology roadmap is organised around seven areas: infrastructure scalability and stress readiness, proactive systems monitoring, cybersecurity posture and threat response, regulatory digitisation readiness, forward-looking resilience and regulatory alignment, customer experience improvement, and the continued, governed adoption of AI. Priorities for the coming year include extending the APIfication programme to additional transaction and reporting workflows, moving select AI proof-of-concepts toward limited production use where governance review supports it, and continuing planned infrastructure and resilience investments in line with anticipated volume growth.

This roadmap is intended as a carefully sequenced plan rather than a set of firm commitments, and its pace will be governed by the outcomes of ongoing pilots and regulatory requirements as they evolve. NSDL s approach remains one of deliberate, well-governed progress: building on what has been demonstrated to work and extending scope in a controlled manner that keeps security, compliance and operational stability ahead of the pace of innovation.

4. PRODUCT UPDATES

During FY 2025-26, we have undertaken initiatives to strengthen our operations, enhance investor protection, and boost market efficiency. These efforts reflect our continuing commitment to our core underpinnings of innovation, regulatory compliance, and technological advancement. These are the highlights of our initiatives and their impact on the market and investors.

i. NSDL Mobile App:

NSDL Mobile application is a secure and digital channel to access and manage demat related information and services. Designed with robust security features, including two factor authentication, the application enables investors to view their holdings and transactions, access account statements and reports, and carry out selected depository services through a user-friendly interface on mobile platforms.

The app enables investors to access e-Voting, beneficiary addition and mutual fund redemption. Investors have a consolidated view of demat securities across both CDSL and NSDL. They can monitor open positions and margin details across various exchanges and clearing corporations.

During FY 2025 26, the Consolidated Statement of Account was enhanced to include Mutual Fund holdings maintained in folio form. This enables investors to view their Mutual Fund folio based holdings and transactions as part of the consolidated statement. During the FY 2025-26, there were 4,07,226 active users and 9,733 new registrations for mobile app were received.

ii. NSDL Consolidated Account Statement (CAS):

During the financial year, NSDL dispatched Crores CAS to investors. To provide a consistent portfolio valuation to investors, under SEBI guidance, NSDL has enhanced its CAS as follows:

• Revision in Valuation Methodology:

The valuation of holding in NSDL Demat account is revised from June 2025 basis on a advisory from SEBI to consider daily closing price or face value whichever is available based on whether the securities are listed or unlisted respectively.

• Inclusion of SIFs:

Specialized Investment Funds (SIFs) are rapidly gaining traction in India following their formal introduction by SEBI under the amended SEBI (Mutual Funds) Regulations, with the framework becoming effective from 1 April 2025. SIFs are designed to bridge the long standing gap between traditional mutual funds and high ticket products such as PMS and AIFs.

To support the growing ecosystem and improve transparency, NSDL s Consolidated Account Statement (CAS) has been enhanced to reflect SIF holdings as a distinct asset class, giving investors a single, unified view of equity, debt, mutual funds and SIF investments in one statement.

iii. SPEED-e

SPEED-e is an internet infrastructure that enables Depository Participants (DPs) to offer depository services to their clients electronically. This platform is extensively used by DPs to provide an electronic instruction submission facility, bringing convenience to investors and reducing risk for both DPs and investors, thereby enhancing the overall customer experience. Demat account holders, including Clearing Members, can submit delivery instructions electronically through the SPEED-e website instead of using paper Delivery Instruction Slips. This service can be accessed securely via the internet. During the FY 2025-26, NSDL has enabled Value Free Transfer (VFT) of Government Securities (G-Secs) between demat accounts within Depositories (NSDL and CDSL) and between NSDL demat account and RBI Retail Direct Gilt Account(s) (RDG) accounts maintained at CCIL for Own Account Transfers.

As of March 31, 2026, 256 Participants have subscribed to the SPEED-e service, with more than 14.5 Lakh users registered for the e-service facility. During FY 2025-26, transactions processed through SPEED-e were 9.88 Crore.

Further, SPICE (Submission of Power of Attorney-based Instructions for Clients Electronically) facility is designed for demat accounts operated based on eDIS /DDPI /POA Power of Attorney (POA). As of March, 2026, clients registered for the SPICE facility are 5.81 Crore.

iv. IDeAS

The Internet-based Demat Account Statement (IDeAS) is a secure online service provided by NSDL for demat account holders to view their latest balances, values, and transactions. At the end of FY 26, the number of IDeAS users was 19.92 Lakhs. As of March 31, 2026, 376 Clearing Members and 311 DPs have subscribed to IDeAS.

v. STeADY

STeADY (Securities Trading Information easy Access and Delivery) revolutionises trade processing by enabling Straight Through Processing (STP), a fully automated workflow. This internet-based platform securely transmits digitally signed and encrypted trade information directly to market participants. With STeADY, institutional investors and their custodians receive electronic contract notes for seamless matching and efficient settlement. By leveraging STeADY, we are committed to delivering a more efficient, secure, and streamlined trading experience for our valued clients.

Growth in FY 2025-26: NSDL s STeADY experienced phenomenal growth in FY 2025-26.

The contract notes processed grew by around 7.65%, totalling 2 Crore contract notes. This widespread adoption is a testament to the efficiency, security, and reliability that STeADY offers. In the financial year 2025-26 the STeADY facility is now used by around 297 fund managers (including Mutual Funds, Insurance Companies, Banks, PMS, AIFs, and others), 367 brokers, and 17 custodians.

STeADY Metrics:

Particulars	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25	2025-26
ECN Upload (Lakh)	33.73	37.46	78.88	104.00	135.00	186.32	200.22

vi. TRADeS -

Transaction Related Alerts of Demat account received through SMS (TRADeS) is an SMS alert facility provided by NSDL. It offers clients important updates about their depository accounts on their mobile phones, facilitating risk mitigation and adding value to our services.

Growth in Usage: As of March 31, 2026, 428.18 Lakh investors were registered for TRADeS, up from 379.91 Lakh investors as of March 31, 2025. During FY 2025-26, a total of 82.10 Crore SMS alerts were sent to clients under this service.

vii. e-Voting

Our e-Voting platform has helped many leading companies to offer e-Voting services to their shareholders, empowering them to exercise their voting rights electronically. This platform allows investors to actively participate in the company s decision-making process by casting their votes online. It also provides companies with live streaming of meeting proceedings, instantaneous results, tab-based e-Voting services at General Meeting venues, and e-notices services for companies using the e-Voting platform.

Particulars	As of March 2025	As of March 2026
Companies availed e-Voting facility	4,654	5,090
No. of occasions on which companies availed e-Voting facility	32,144	37,431

5. FOREIGN PORTFOLIO INVESTORS (FPI)

NSDL has developed a unified portal for foreign investors to obtain registration for Foreign Portfolio Investors (FPI) and Foreign Venture Capital Investor (FVCI). To deliver a seamless experience under a single login, the platform serves as a streamlined digital gateway for foreign investors accessing Indian securities markets. Built on advanced architecture, it offers guided workflows, secure form submissions with interactive tooltips, significantly reducing onboarding timelines.

FOREIGN PORTFOLIO INVESTORS (FPI)

Foreign Portfolio Investors (FPI) regime commenced in India from June 1, 2014 onwards. SEBI has assigned NSDL with the responsibility of generating FPI Registration Certificate to FPI applicants. Accordingly, NSDL has developed a web-based system viz., FPI Monitor for the Designated Depository Participants (DDP) to register their FPI applicants online and obtain FPI registration number and Allotment of PAN based on API technology between NSDL, SEBI, and ITD.

Further the FPI Portal has been extended to ODI issuer to get the FPI registration and use NSDL credentials for daily reporting and monitoring to meet SEBI compliance requirements.

During FY 2025-26, a total of 1271 new FPI applications were registered by DDPs on NSDL FPI registration portal as against 1526 in FY 2024-25. DDPs have also renewed the registration validity of 3,605 FPIs during FY 2025-26 on the NSDL FPI portal as against 2,951 during FY 2024-25. As of March 31, 2026, the total number of FPIs which were registered on NSDL FPI website was 12,199.

NSDL has been monitoring the investment limits of FPI investor groups which form part of same investor group under the equity segment and aggregate FPI Debt limits in respect of Corporate Debt. Further, as per SEBI circular, NSDL is monitoring FPIs, that individually, or along with their investor group, hold more than t 50,000 Crore of equity AUM in the Indian markets. Further, under the guidance of SEBI and in consultation with MIIs, NSDL has started monitoring of ODI subscribers equity investment in Indian market since November 2025. Besides, NSDL disseminates rich statistical information on NSDL FPI portal relating to Asset Under Custody and investments by FPIs in India.

Common Application Form (CAF)

NSDL offers a web-based online Common Application Form (CAF) on the NSDL FPI Registration portal viz., FPI Monitor for FPI applicants. The online common application form enables FPI applicants with single window clearance facility of registration with SEBI, allotment of PAN from Income Tax Department, KYC and Opening of Bank and Demat account in India. FPI Registration via CAF during FY 2024-25 and FY 2025-26 , a total of 2,797 new FPI applications were registered through NSDL s online Common Application Form (CAF) portal. Out of 2,797 CAF registrations, around 2,084 applicants were allotted PAN through CAF during FY

2024-25 and FY 2025-26.

FPI Registration via CAF During

	FY 2024-25	FY 2025-26
FPI
Registration with PAN	1,147	937
FPI
Registration without PAN	379	334
Total	1,526	1,271

NSDL FPI Portal (FPI Monitor) Offerings

1. FPI Registration	2. Demat Account Opening Integration
3. Allotment of PAN	4. FPI Modification
5. DSC Enrolment & Signing feature	6. Renewal of FPI
7. Communication Channel in CAF module	8. Surrender of FPI

FPI Assets Under Custody (AUC) Country-wise (top 10 countries) Data

As of March 31, 2026, the total AUC of all FPIs was 66.56 Lakh Crore. FPIs from USA, Singapore and Luxembourg constitute 56.12% of total Asset under Custody (AUC) held by all FPIs. FPIs from USA are at the Top position holding 28.35 Lakh Crore (40.75%), with Singapore at 2 nd position holding assets worth 5.64 Lakh Crore (8.11%) followed by Luxembourg at 3rd position holding assets worth 5.05 Lakh Crore (7.26%). The country-wise FPI AUC of Top 10 countries as of March 31, 2026, is exhibited below:

FPI Net Investment During FY 2025-26

During FY 2025-26, FPIs have made total net outflow of 1,52,691 Crores under all segments. The equity segment has seen major outflow ( 1,80,832 Crores) followed by Debt-VRR segment ( 2,071 Crores) and , Hybrid segment ( 371Crores). Whereas net inflow was observed in Debt-general segment ( 12,429 Crore) and Debt -FAR segment ( 15,449 Crores).

Sr. no Country	AUC ( Lakh Crore)	% Age
1 United States of America	28.35	40.75%
2 Singapore	5.64	8.11%
3 Luxembourg	5.05	7.26%
4 Ireland	4.58	6.58%
5 Mauritius	3.12	4.48%
6 United Kingdom	2.94	4.23%
7 Norway	2.48	3.56%
8 Japan	2.11	3.03%
9 Canada	1.92	2.76%
10 Netherlands	1.58	2.27%

FPI Net Investment FY 2025-26	In Crore
Apr-25	-20,190
May-25	30,950
Jun-25	-7,563
Jul-25	-5,538
Aug-25	-20,505
Sep-25	-12,539
Oct-25	35,598
Nov-25	2,836
Dec-25	-38,568
Jan-26	-29,240
Feb-26	37,804
Mar-26	-1 -1,25,736

b. Foreign Venture Capital Investors (FVCI)

The Foreign Venture Capital Investor (FVCI) regime commenced in India in the year 2000. SEBI has designated NSDL with the responsibility of processing FVCI registrations and issuing FVCI registration certificates. Accordingly, NSDL has developed a unified portal for foreign investor to generation of FVCI registration numbers.

6. OPERATIONS IN GIFT CITY (IFSC)

An International Financial Services Centre (IFSC) has been established at GIFT City, Gandhinagar with the International Financial Services Centres Authority (IFSCA) as the regulatory body. NSDL has joined as a partner in the MII consortium with other MIIs. Within this framework, the MII Consortium has led the formation of India International Bullion Holding IFSC Limited (IIBH), where NSDL holds a 20% stake. Under IIBH, two wholly-owned subsidiaries have been established: (i) India International Bullion Exchange IFSC Limited: Oversees bullion exchange operations.

(ii) India International Depository IFSC Limited (IIDL):

Serves as an international depository for securities and bullion products. NSDL has provided the software system for securities depository to IIDL, enabling the issuance of Unsecured Depository Receipts (UDRs) for various NASDAQ and NYSE-listed companies. These UDRs are actively traded on the NSE IFSC platform within GIFT City.

7. RISK MANAGEMENT i. Risk Management Framework

NSDL has adopted a Risk Management Framework which is based on COSO, ISO 31000, and CPMI-IOSCO principles. In accordance with the SEBI (Depositories & Participants) Regulations, 2018, and SEBI s recommendations, NSDL has also constituted a Board level Risk Management Committee. This committee includes Public Interest Directors and an Independent External Person, and it is chaired by a Public Interest Director.

NSDL s Risk Mitigation Strategy: NSDL has institutionalised a comprehensive risk management framework that includes proactive reporting to the Risk Management Committee. This framework is supported by internal policies and procedures to ensure compliance. The Company has a dedicated Risk Management function, headed by a Chief Risk Officer (CRiO), independent from the operations and business units of the Company. The following are some of the critical risks (Indicative list) in the depository system:

• Business Risk: Impact of market behaviour on the company s revenues and sustainability across business cycles.

• Business Continuity Risk: Potential inability to conduct business and provide services due to damage to physical assets or infrastructure breakdowns caused by natural calamities, accidents, or technical failures.

• Operational Risk: Possible losses from operations due to third-party liability, employeeinfidelity, electronic and computer crimes, errors, and omissions.

• Financial Risk: Financial risks that can affect the ability of the company to perform its functions.

• Legal and Statutory (Regulatory) Risk: Compliance with various laws and regulations governing the company.

• Technological Risk: Risks associated with the increased use of technology in business operations.

• Information Security and Cyber Security Risk: Risk associated with potential unauthorized access, use, disclosure, disruption, modifications, destruction of information and Information Systems.

ii. Risk Mitigation Strategy

The Risk Mitigation encompasses the following: strategy of NSDL

• Identify Possible Risk Events: NSDL maintains a comprehensive list of potential risks to data, operations, and personnel in the form of Risk & Control Self-Assessment document (RCSA) a.k.a risk registers.

These registers are regularly reviewed and updated to ensure that the potential risk events are identified and controlled.

• Conduct Risk Assessment: All business processes undergo a thorough risk assessment. This involves documenting potential risks and the relevant control designs and safeguards in place to mitigate / minimise the impact of these risks, if and when they materialise.

• Track Risks: Risks are continuously monitored by respective vertical heads as First Line of Defence and Risk Management team as Second Line of Defence. The effectiveness of the risk mitigation / minimisation plan is also evaluated periodically to ensure it can address the changing nature of risks.

• Implement Actions and Assess Progress: The risk mitigation / minimisation plan is periodically evaluated for its ability to handle evolving risks. The plan is revised and updated as needed to ensure it remains relevant and effective in mitigating / minimising the risks.

iii. Business Continuity Planning (BCP) & Disaster Recovery (DR) NSDL has a robust policy in place for Business Continuity Planning (BCP) and Disaster Recovery (DR), in compliance with SEBI circulars dated March 26, 2019, and March 22, 2021.

• Disaster Recovery Site (DRS): NSDL has established DRS and enables periodic conduct of depository operations from the Disaster Recovery Site to ensure readiness in case of a disaster at the primary site.

• Regular Drills: Mock and real scenario exercises are conducted regularly to ensure that operations can be smoothly resumed from the DR site if needed.

• Near DR Site: NSDL has implemented a Near DR site as a data bunker for critical applications, providing an additional layer of security and resilience for its operations.

8. INTERNAL CONTROL AND AUDIT

NSDL has established robust processes with clearly defined internal audit roles and responsibilities. Comprehensive operational manuals, policies and standard operating procedures are in place across various departments. An independent audit firm conducts internal operations and IT related audit across all verticals of NSDL under the supervision of a designated team. The Internal Auditor s report, along with management s response, is presented to the Audit Committee on periodic basis, which reviews the report and provides advice on improvements in internal controls.

9. ARBITRATION

During FY 2025-26, no new arbitration proceedings were initiated by or against the Company.

10. INVESTOR AWARENESS PROGRAMMES

Under the aegis of SEBI, NSDL conducts Investor Awareness Programs (IAPs) for a wide spectrum of stakeholders, including defence personnel, corporates, educational institutions, and women centric groups, through offline, online, and hybrid modes. In addition, NSDL organises customised programs tailored to various target segments such as retail investors, faculty members, students, Indian Army personnel, police officials, legal professionals, and medical practitioners across the country.

These programs were delivered in 16 languages, ensuring inclusive outreach and effective dissemination of investor centric information. The initiatives cover a broad range of topics aimed at enhancing literacy, promoting informed participation in the securities market and awareness on cyber frauds. Special emphasis has been placed on outreach in under served regions, including the North Eastern states of Arunachal Pradesh, Nagaland, Tripura, Manipur, Mizoram, Sikkim, and Assam.

During FY 2025 26, NSDL conducted over 2,700 Investor Awareness Programs, surpassing the planned outreach, and engaged more than 1.69 Lakh participants across 34 States and Union Territories, reflecting its strong commitment to expanding investor awareness and strengthening financial inclusion nationwide.

11. LISTING OF SHARES

During the year under review, the Equity Shares of the Company were listed on BSE Limited (Scrip Code: 544467) on August 06, 2025 , pursuant to the successful completion of its Initial Public Offering. This landmark achievement represents a significant milestone in the Company s journey and reflects the confidence reposed by the investors and stakeholders in its business fundamentals, governance framework and long-term growth prospects.

12. CYBER SECURITY INITIATIVES

NSDL is certified for ISO 27001:2022 standard and following information security global standards. We continuously enhance our cyber security capability with multi-layer controls implementation using Artificial Intelligence, next generation of network firewalls, intrusion prevention system, host-based intrusion prevention systems, encryptions during data in rest and data in motion, and strong identity and access management solution for privileged users.

We have established an in-house Security Operations Center (SOC) with AI capabilities that operates 24/7 to detect, analyse, contain, and respond to cyber security events. The SOC uses an analytical platform to correlate data from network, security, and server infrastructure and using different monitoring tools.

13. WAY FORWARD

As India s financial markets evolve rapidly, We remain committed to strengthening its role as the nation s premier depository. The year ahead presents both opportunities and challenges, and our strategic priorities are designed to ensure resilience, innovation, and sustainable growth.

• Technology-led transformation We will intensify our focus on building advanced digital infrastructure to support India s evolving capital markets. This includes widening API Offerings via API sandbox mechanism, and strengthening cybersecurity frameworks to safeguard investor data. The transition to T+0 settlement cycles will demand robust systems capable of handling real-time transactions, ensuring efficiency, transparency, and resilience in market operations.

• Retail investor empowerment To deepen financial inclusion, we will expand investor education programs to increase investor awareness and simplify access procedures. Special emphasis will be placed on tier-2 and tier-3 cities, where digital penetration is rising but awareness remains limited. By leveraging mobile platforms, vernacular content, and partnerships with intermediaries, we aim to empower retail investors with knowledge, tools, and confidence to participate actively in India s capital markets. capital

• Diversification of services Recognizing the need to reduce reliance on equity-driven revenues, we will broaden the offerings across debt instruments, exchange-traded funds (ETFs), and alternative investment products. This diversification will not only stabilize revenue streams during periods of equity market volatility but also position NSDL as a comprehensive depository catering to diverse investor needs. Expansion into new asset classes will strengthen its role in India s financial ecosystem and align with global best practices.

brokers is key to reaching • Ourengagement with fintech a broader investor base. To ensure that we maintain a significant market share of the depository service market in India, we strive to increasingly onboard such new age fin-tech brokers. Such brokers have an ever-growing digital presence that would allow us to scale. We are actively educating these brokers about the importance of risk management, including mitigating concentration risk of opening accounts with only one depository;

14. OTHER DISCLOSURES

i. OPPORTUNITIES AND THREATS & OUTLOOK

OPPORTUNITIES:

Market Leadership: NSDL administers over t 477.29 Lakh Crore in custody value, making it the backbone of India s capital markets. Its scale has earned the trust regulators, issuers, and institutional investors alike. Its dominance ensures smooth settlement of trades, efficient corporate actions, and confidence for foreign portfolio investors who rely on NSDL s infrastructure.

Retail Investor Surge: The surge in reatil investors is reshaping India s capital markets. With demat accounts crossing 22 Crore in 2026, NSDL is actively tapping into this momentum by introducing specialized offerings like women-focused, youth-oriented, and mutual fund-linked demat accounts. These initiatives not only broaden NSDL s retail base but also help gain competitive edge. By tailoring products to different investor segments, NSDL strengthens inclusivity and builds long-term loyalty among new entrants to the market.

Issuer partnerships are a powerful growth lever for depositories like NSDL with over 1 Lakh issuers already onboarded, NSDL can move beyond simply holding securities to offering value-added services that strengthen corporate governance and investor relations.

Depositories to benefit from rising capital market participation:

India s inherent strengths such as large population, growing middle-income households, initiatives taken by the government and SEBI to push for financial literacy, increasing awareness, millennials entering the space for better returns, etc. are benefitting markets in India and hence depositories. Details are provided below:

Increasing number of companies opting for dematerialization:

As of March 31, 2026, a total of 111,379 companies have joined NSDL. Of these, 6,668 companies are listed entities, while 104,711 companies are unlisted entities.

THREATS:

Market volatility:

Global inflation and geopolitical conflicts (e.g., oil shocks, war-driven instability) may reduce IPO activity and long-term retail participation, impacting NSDL s transaction-driven revenues.

Competition:

While NSDL is a dominant player, competition could impact its market share and revenue streams.

Regulatory Compliance:

SEBI and other regulators push for faster settlement cycles, stricter investor protection norms, and enhanced transparency. These requirements increase costs, operational complexity, and reputational risks if not managed effectively.

Cybersecurity vulnerabilities:

Cybersecurity vulnerabilities represent one of the most critical threats to NSDL, given its role as India s largest depository and custodian of sensitive investor data. Any breach could undermine trust in the financial system and invite severe regulatory and reputational consequences.

ii. OUTLOOK

Outlook on Indian Capital Markets

The outlook for the Indian capital markets remains positive, supported by strong domestic participation, improving macroeconomic fundamentals, continued digital adoption, and a favourable policy environment. Despite global uncertainties, geopolitical tensions, and intermittent foreign capital outflows, Indian capital markets demonstrated resilience during FY 2025-26, driven by robust domestic investor flows and sustained financialization of household savings.

Key factors supporting the outlook include:

• The Union Budget FY 2025-26 introduced significant personal tax relief, with no income tax payable on annual income up to 12 Lakhs under the new tax regime. This is expected to enhance disposable income, boost household savings, and encourage mark greater participation in financial ets.

• Fiscal consolidation remains on track, with the Government targeting a fiscal deficit of 4.4% of GDP in FY 26 compared with 4.8% in FY 25. This is expected to support macroeconomic stability, moderate borrowing requirements, and create a conducive environment for capital market growth.

• Retail participation continues to deepen across the country. During the first nine months of FY 26, over 2.35 Crore demat accounts were added, taking the total number beyond 21.6 Crore, while the number of unique investors crossed 12 Crore.

• Domestic investors have emerged as a key stabilizing force for the market. Over recent years, cumulative domestic inflows have exceeded foreign portfolio inflows, helping reduce market vulnerability to global capital flow volatility.

• India s primary market continued to witness strong momentum. FY 26 recorded a record 366 IPOs, with public equity fundraising reaching approximately 2.3 Lakh Crore, reflecting robust investor confidence and corporate fund-raising activity.

• Continued efforts by SEBI, stock exchanges, depositories, and other market participants towards investor education, market transparency, digital onboarding, and investor protection are expected to further strengthen market participation and trust.

In a bid to grow the bond market, the government is encouraging cities to float municipal bonds. Further, the financial market measures towards market-linked debentures and listed debentures will plug tax loopholes and would attract investor flows in the future.

Industry outlook/development

The depository industry remains well-positioned for long-term growth, driven by increasing investor participation, rapid digitalization, and expanding access to capital markets across geographies.

The growing adoption of online investment platforms, simplified KYC processes, and seamless digital account opening have significantly enhanced accessibility and reduced transaction costs for investors. These structural developments continue to attract first-time investors from Tier II, Tier III, and rural markets.

iii. Material Developments in HR

The company continues to place strong emphasis on the quality, engagement, and wellbeing of its Human Resources, recognising employees as key drivers of sustainable growth. A positive and inclusive work environment remains central to attracting, motivating, and retaining high-calibre talent.

Employee wellbeing continues to be a priority, with a range of initiatives conducted during the year. As part of the Employee Wellness Programme, the Company organised health and wellness sessions, along with engagement-led initiatives aimed at promoting work-life balance and fostering a sense of community.

During the year, several employee engagement activities were conducted to enhance collaboration and strengthen organisational culture. These included festive celebrations such as Christmas events, Diya Making, Rangoli competitions, Women s Day, Father s Day celebration, Children s Day and the NISM tournament which encouraged participation and creativity across teams. The Company also continued its Rewards & Recognition (R&R) programmes to acknowledge and appreciate employee contributions. In addition, the organisation was recognised externally as a Company with Great Managers, reinforcing its commitment to strong leadership and people practices.

Team bonding and cross-functional collaboration were further encouraged through various initiatives and informal engagement platforms. Long service awards were presented during the Annual Offsite to recognise the dedication and commitment of tenured employees.

Effective and transparent communication continued to be a key focus area during the year. The Company strengthened leadership connect through initiatives such as Sampark Sabha (Townhall), where the Managing Director addressed employees across the organisation, sharing updates on business performance, growth outlook, and prevailing market conditions, while also encouraging open dialogue. In addition, the Managing Director conducted engaging interactions with new joiners, providing them an opportunity to engage directly with leadership, gain insights into the Company s vision and values, and build early alignment with organisational goals. These initiatives have contributed to fostering greater trust, clarity, and engagement across the workforce.

The Company remains committed to diversity and inclusion, with women constituting approximately 28.2% of the workforce as of March 31, 2026.

Efforts continue to be made to build an equitable and inclusive workplace.

Learning and development continue to be a key focus area. The Company actively invests in building employee capabilities through structured training programmes, covering behavioural, functional, and mandatory domains. During the year, a total of 20,152 training manhours were delivered across the organisation, reflecting the Company s commitment to continuous learning and skill enhancement:

Type of training	Sum of Manhours
Behavioural & Culture	7,371
Functional	4,602
Mandatory	8,179
Grand Total	20,152

Focused efforts were made to strengthen customised learning pathways, keeping in view evolving business needs and employee development requirements. Training programmes such as Indian Accounting Standard sessions and other domain-specific interventions were conducted to enhance professional competencies.

Employees across all levels are provided opportunities to participate in external seminars and forums in the capital markets and related areas, both in India and internationally. The Company also ensures that all new hires undergo a comprehensive induction programme, enabling them to understand the organisation s operations and culture. Regular training on Information Security, policy awareness, and regulatory compliance continues to be a key component of the learning framework.

Overall, the Company remains committed to nurturing talent, fostering engagement, and building a resilient and future-ready workforce.

POSITIVE WORK ENVIRONMENT In accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ( POSH Act ) and the Rules made thereunder, the Company has formulated Policy for Positive Work

Environment & POSH which mandates no tolerance against any conduct amounting to sexual harassment of women at workplace. The said Policy applies to all the employees, regular or temporary, including contract employees, employees on deputation, probationers, trainees and apprentices whether in the office premises or outside while on assignment. Where sexual harassment occurs to a NSDL employee as a result of an act by a third party or outsider while on official duty, NSDL will take all necessary and reasonable step to assist the affected person in terms of support and preventive action. The Policy is hosted on the Company s website at https://nsdl.com/ investor-relation/code-and-polices.php An Internal Committee (IC) has been constituted to redress and resolve any complaints arising under the POSH Act. Training/awareness programmes are regularly being conducted throughout the year to create sensitivity towards ensuring a respectable workplace. Disclosure in relation to POSH Act is provided in Corporate Governance Report for the year ended March 31, 2026, which is enclosed as Annexure C .

Particulars of Employees

Information required under the provisions of section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and SEBI D&P Regulations a statement containing the remuneration details of Directors and Employees is annexed as

Annexure F and forms part of this report.

G. Disclosure in relation to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

Number of Complaints filed during the year :	Nil
Number of Complaints Disposed during the year :	Nil
Number of Complaints pending as of end of the Financial Year :	Nil

Ratio analysis and its elements

Ratios	Numerator	Denominator	As of March 31, 2026	As of March 31, 2025	Variance %	Reason for variance for more than 25%
Current Ratio (In times)	Current Assets	Current Liabilities	1.51	1.36	10.99
Debt-Equity Ratio			N.A.	N.A.
Debt Service Coverage Ratio			N.A.	N.A.
Return on Equity Ratio (In %)	Net Profits after taxes	Average Shareholder \u2019 s Equity	18.32%	19.39%	-5.53
Inventory Turnover Ratio			N.A.	N.A.
Trade Receivables Turnover Ratio (In times)	Revenue from Operations	Average Trade Receivable	7.04	8.06	-12.67
Trade Payables Turnover Ratio (In times)	Other Expenses	Average Trade Payables	4.71	5.96	-21.02
Net Working Capital Turnover Ratio (In times)	Revenue from Operations	Working Capital	2.19	3.12	-29.63	The increase in working capital was proportionately higher compared to growth in revenue from operations.
Net Profit Ratio (In %)	Net Profit	Revenue from Operations	51.17%	51.99%	-1.58
Return on Capital Employed Ratio (In %)	Earnings before interest and taxes	Shareholder \u2019 s Equity	22.48%	23.35%	-3.73
Return on Investment Ratio (In %)	Finance Income	Average Investment	6.89%	7.13%	-3.36
Operating Profit Margin (In %)	Operating Profit	Revenue from Operations	49.36%	50.01%	-1.30
Interest Coverage Ratio			N.A.	N.A.

iv. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

There is marginal increase in return on net worth as compared to last year because of increase in profit.

v. Disclosure of Accounting Treatment in preparation of Financial Statements:

The financial statements have been prepared in accordance with Indian Accounting Standards

( Ind AS ) as per the companies (Indian Accounting Standards) Rules 2015 as amended and notified under section 133 of the Act and other relevant provision of the Act, with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.