Orbis Financial and India’s Custody Market | Unlisted Share Analysis

Orbis Financial Explained: A Rising Force in India’s Custody Market

India’s capital markets often spotlight banks, brokerages, and asset managers. Yet behind every large institutional trade sits a lesser-known but critical player, the custodian. Custodial institutions ensure securities are safely held, trades are settled accurately, and regulatory obligations are met. As institutional participation in India grows, custodians are becoming increasingly important to the financial ecosystem.

One company quietly strengthening its position in this space is Orbis Financial. Though not a household name, Orbis has emerged as a fast-growing player in India’s custody market, especially in the unlisted segment where investors closely track financial infrastructure companies with long-term potential.

What Is a Custodian and Why Does It Matter?

A custodian is a financial institution responsible for holding and safeguarding securities such as equities, bonds, and mutual fund units on behalf of clients. Custodians also manage settlement of trades, corporate actions, dividend collections, interest payments, and regulatory reporting.

Foreign Portfolio Investors, Foreign Institutional Investors, domestic mutual funds, insurance companies, and Alternative Investment Funds do not directly interact with stock exchanges for operational processes. Instead, they rely on custodians to act as intermediaries. Without custodial services, large-scale institutional investing would be inefficient and risky.

As India attracts more institutional capital, custodial services move from being a backend function to a core pillar of market stability.

Industry Outlook: An Underpenetrated Opportunity

India’s custody market has expanded significantly over the past two decades. According to industry estimates, Assets Under Custody have grown more than thirtyfold, crossing approximately ₹97 trillion, with growth averaging over 20 percent annually.

Despite this growth, India accounts for only a small fraction of the global custody market. This gap highlights substantial headroom for expansion. Increasing participation from domestic mutual funds, pension funds, insurance companies, and AIFs continues to drive demand for professional custodial and fund accounting services.

Regulatory tightening, higher compliance standards, and growing institutional sophistication further strengthen the role of organized custodians.

Orbis Financial: Company Overview

Founded in 2005 and headquartered in Gurugram, Orbis Financial Services received SEBI approval as a custodian in 2007. Over the years, it has built a comprehensive service offering targeted at institutional investors.

Orbis positions itself as a one-stop custodian platform, offering services that include equity and commodity clearing, depository services, share transfers, FPI registration, fund accounting, and trustee services. Its client base spans FPIs, FIIs, DIIs, PMS structures, and AIFs.

Rather than operating as a niche service provider, Orbis has focused on scale and integration, allowing clients to manage multiple custodial needs under a single framework.

Business Model and Competitive Positioning

The custodial business benefits from high entry barriers. Regulatory approvals, technology infrastructure, compliance expertise, and long-term client trust make it difficult for new entrants to scale quickly.

Orbis benefits from operating leverage. Once systems and processes are in place, incremental growth in Assets Under Custody leads to higher profitability. This is reflected in the company’s margin profile and consistent improvement in financial metrics.

Its focus on institutional clients also ensures recurring revenue streams, as custody relationships tend to be long-term rather than transactional.

Financial Performance That Stands Out

Orbis Financial’s financial growth over recent years has been strong, particularly for an unlisted company.

Between FY21 and FY24, revenue increased from around ₹87 crore to approximately ₹431 crore, reflecting a CAGR of about 71 percent. Net profit during the same period rose from ₹16 crore to ₹141 crore, translating into a CAGR exceeding 100 percent.

EBITDA has expanded sharply, supported by operating leverage, with margins averaging close to 55 percent over the past three years. Assets Under Custody have grown from roughly ₹34,000 crore to about ₹1.23 lakh crore in a short span, reflecting strong client onboarding and higher wallet share.

If current growth trends sustain, projections suggest revenue and profitability could continue scaling meaningfully over the next few years, although actual outcomes will depend on market conditions and regulatory developments.

Management and Shareholding Strength

Leadership credibility plays a major role in financial infrastructure businesses. Orbis Financial is led by its Founder and Chairman, Mr. Atul Gupta, who holds a significant ownership stake. Founder-led ownership often aligns management decisions with long-term value creation.

The presence of well-known investor Ashish Kacholia as a shareholder further strengthens confidence. Strategic investors with long-term perspectives often bring not just capital but also governance discipline and market credibility.

Valuation in the Unlisted Market

As of recent unlisted market transactions, Orbis Financial shares have been trading around ₹445. At this level, the company is valued at approximately 22 times earnings, which is higher than the average valuation of listed custodial peers.

On return metrics, Orbis compares favorably. Return on Equity stands around 21 percent, higher than the industry average, while Return on Capital Employed is close to 39 percent, reflecting efficient capital utilization.

While valuation appears rich on a relative basis, the premium is partly supported by strong growth visibility, margin profile, and expanding Assets Under Custody. Still, valuation sensitivity remains an important consideration for investors.

Peer Comparison and Market Performance

Compared to listed custodial peers, Orbis trades at higher price-to-earnings and price-to-book multiples. However, its profitability ratios outperform many peers, and historical returns in the unlisted space have been significantly stronger over the past few years.

Listed peers have delivered modest average returns, while Orbis has generated substantially higher appreciation in the unlisted market. This divergence reflects both growth execution and increased investor interest in high-quality unlisted financial infrastructure companies.

Key Risks to Consider

Despite strong fundamentals, Orbis Financial is not without risks. Valuation risk remains important, as any slowdown in earnings growth could impact unlisted share prices.

The business is also heavily dependent on regulatory frameworks. Changes in SEBI regulations or compliance requirements could affect cost structures or operational flexibility.

Liquidity risk is another factor. With no confirmed IPO timeline, investors in unlisted shares may face longer holding periods before exit opportunities emerge.

Should Investors Track Orbis Financial?

Orbis Financial operates in a niche yet essential segment of India’s financial ecosystem. Custodial and fund accounting services are set to benefit from rising institutional participation and deeper capital markets.

With strong growth in Assets Under Custody, high operating margins, and credible management backing, Orbis appears positioned as a long-term compounder rather than a short-term trading opportunity. However, current valuation levels suggest that investors should remain selective and patient.

For long-term investors seeking exposure to financial infrastructure beyond traditional banks and NBFCs, Orbis Financial deserves close monitoring, particularly on valuation corrections or clearer IPO visibility.

FAQs

What does Orbis Financial do?

Orbis Financial provides custodial, clearing, depository, and fund accounting services to institutional investors in India.

Is Orbis Financial a SEBI-registered custodian?

Yes, Orbis received SEBI approval as a custodian in 2007.

Why is the custody market important in India?

Custodians enable safe settlement, compliance, and operational efficiency for institutional investors, supporting market stability.

Is Orbis Financial planning an IPO?

As of now, there is no official IPO timeline, which makes liquidity a consideration for unlisted investors.

Final Thought:

India’s custody market is still evolving, and companies like Orbis Financial are quietly building the backbone of institutional investing. For investors willing to look beyond headline names, such businesses offer an interesting lens into the future of India’s financial infrastructure.