Markets

Will the power of ODIN put FTIL on the path to recovery?

Rajalakshmi Nirmal BL Research Bureau | Updated on August 15, 2014

The company’s flagship software enjoys lion’s share of the market but faces stiff competition from the likes of NSE’s NOW



With the National Spot Exchange closed and Financial Technologies (India) Ltd (FTIL) divesting its stake in other exchanges, the future of the company now depends on its core business: providing exchange interfacing solutions to brokers.

FTIL’s flagship product, ODIN, still enjoys a significant market share, but faces stiff competition from similar software, especially the National Stock Exchange’s solution, NOW.

NOW comes in

ODIN is reported to have 60-70 per cent market share in the exchange solutions space. Large brokers, including Kotak Securities, still use the product.

However, NSE’s NOW, a cloud-based platform, is widening its user base. For those using NOW, trades executed on the NSE are completely free. For transactions on the Bombay Stock Exchange, the fee is ₹1 per trade.

Many small brokerages that are seeking to cut costs are moving to NOW, say industry observers.

Motilal Oswal Securities has stopped using ODIN. Says Ashwini Yadav, Senior Vice-President, IT, at the company: “We were using ODIN. But after the NSEL scam we have moved to another software.”

Nithin Kamath, Founder and CEO of Zerodha, feels that the switch was not because of fears of a systemic failure but because “NOW is completely free whereas there is a huge technology cost to run ODIN.”

Cholamandalam Securities is another player that also recently switched to NOW from ODIN. Explaining the rationale, Mariam Mathew, Head, Cholamandalam Securities, said: “We moved to NOW primarily because there is no cost in scaling up. Also, from our end, there is no need to maintain a separate server and related infrastructure.”

Besides NOW, ODIN faces competition from others such as NEST (Omnesys) and DION (Religare group).

Some industry experts say that ATOM — FTIL’s payment gateway solution — is still a market leader in its space and holds some promise.

Raking in cash

While the ability of ODIN to hold its ground will be tested in the months ahead, the ₹1,600-1,700 crore raised by the company through its recent stake divestment in group companies will come in handy if it wishes to diversify into other areas.

Retail investors seem to be finding value in the stock at its current beaten down price. From 12.26 per cent in the January-March period, individual investors’ holding in the stock has gone up to 14.26 per cent.

Institutions, however, are not ready to bite yet. While domestic institutional investors’ holding has remained unchanged, FII holding has dropped.

Published on August 15, 2014

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