Orbis Financial: Small Name, Big Game in India’s Custody Market

What is a Custodian & Why Does it Matter?

Let’s start with the basics. Ever wondered how FPIs and FIIs execute those massive equity trades in India? They don’t go directly to exchanges — they operate through custodians.

A custodian is a financial institution that holds and safeguards securities like shares, bonds, mutual funds, etc., on behalf of clients. They also handle trade settlements, dividends, interest collections, and regulatory compliance. In short — they're the backstage crew making sure your investments are secure and your trades go through smoothly.

Industry Outlook: An Underpenetrated Giant

According to Deloitte, India’s AUC (Asset Under Custody) has grown 36x over the last two decades — now crossing ₹97 trillion, growing at a solid 22% CAGR.

Despite this, India still holds just 2% of the global custody market, which signals one thing: massive headroom for growth.

With rising participation from domestic institutions — mutual funds, insurance companies, AIFs — custodial services are poised for exponential demand.

 Orbis Financial: The One-Stop Custodian Powerhouse

Founded in 2005 and headquartered in Gurugram, Orbis Financial received SEBI’s approval as a custodian in 2007.

It offers:

• Equity & commodity clearing

• Depository services

• Share transfers

• FPI registration

• Fund accounting & trustee services

Orbis has positioned itself as a full-stack solution for institutional clients including FPIs, DIIs, PMS, AIFs, and FIIs.

Financials That Speak Volumes

Let’s talk numbers — because that’s where Orbis shines:

• Revenue jumped from ₹86.5 Cr in FY21 to ₹431 Cr in FY24 — a 71% CAGR

• Net Profit surged from ₹16 Cr to ₹141 Cr in the same period — a 107% CAGR

• EBITDA Margins have averaged 55% over the last 3 years

• AUC (Assets Under Custody) soared from ₹34,000 Cr to ₹1.23 lakh Cr in just 3 years — a 54% CAGR

- Projections estimate revenue to touch ₹960 Cr and net profit to hit ₹280 Cr by FY27, if current growth sustains.

Management & Shareholding: A Solid Backing

• Founder & Chairman: Mr. Atul Gupta (holds 21.79% stake)

• Ace Investor: Ashish Kacholia (holds 7.8% stake)

The presence of credible names instills confidence in the company’s strategic vision and execution.

Valuation Check: Justified or Stretched?

As of April 2025, Orbis shares trade at ₹445 in the unlisted space.

• P/E Ratio: ~22x (on the higher side vs. peers - 10x)

• Return on Equity (ROE): ~ 21%,  Higher than industry average - 17%

• Return on Capital Employed (ROCE): ~ 39%  Strong and consistent

While valuation is rich, the company’s stellar growth and profitability metrics partially justify the premium.

Peer Comparison

Compared to listed custodial peers:

• Orbis is trading at higher P/E and P/B ratios of 16.5x & 3.45x comapred to its industrty average of 10x & 2.5x

• However, it outperforms peers on ROE & ROCE with 21% & 39%

In the last 3 years:

• Listed peers gave average returns of ~12.75%

• Orbis delivered ~74% in the unlisted market

If you're considering buying Orbis Financial shares in the unlisted share space, platforms like Sharescart.com make it easy to access such pre-IPO investment opportunities. Sharescart enables buying and selling of top-performing companies before they hit the public market.

 Risks to Watch

• Valuation Risk: At 22x PE, the stock isn’t cheap. Any slowdown in profit growth may impact its premium.

• Regulatory Dependence: As a custodian, it’s deeply tied to SEBI norms and policy shifts.

• IPO Uncertainty: No official plans for listing soon, which limits liquidity.

Should You Invest?

Orbis Financial operates in a niche but essential corner of India’s financial infrastructure — custodial and fund accounting services. With rising AUC, strong EBITDA margins (~55%), and a loyal client base of FPIs, DIIs, and AIFs, Orbis is positioned to benefit from India’s growing capital markets. Its business model offers high operating leverage and regulatory barriers to entry, making it a steady compounder in the making.

However, at a valuation of ~22x earnings in the unlisted space, a lot of growth seems priced in. The company has no immediate IPO plans, so liquidity could be a concern for short-term investors. That said, for long-term investors looking for quiet, high-quality plays in financial infrastructure, Orbis is worth keeping on the radar — and potentially entering at more attractive valuations.

Final Thought:

The custodial services industry in India is just getting started — and Orbis is quietly becoming a key player. While it’s not a screaming buy at current levels, it’s definitely a stock to track, research & keep in watchlist.

Stiff wondering? Watch our deatiled video anlysis on youtube to get more clarity