Many of my readers may be aware about the unfortunate incidents happened in once famous ‘ Financial Technologies Ltd ‘ and to its promoter .If we look back ,the success of this company in the past was mainly due to its cutting edge offerings in Risk management,Exchange management and various solutions for broking related business.At a time ,this company is going through a rough patch, let us look into another small and unknown company which slowly showing improved business in the same space.Dion Global Solutions is a company owned by the former promoters of one of India’s largest pharma firm Ranbaxy.Dion Global is a leading provider of software for Banking ,Financial Service and Insurance (BFSI) sector and also providing research and information services to financial institutions, media and publication entities.Company offering various products to verticals like Trading and settlement,Risk Management,Research,compliance..etc . Commercial Banks,Stock Broking firms,Insurance companies,Finance companies,stock exchanges,Depositories and custodians,Asset management companies and hedge funds ..etc are the target customers of Dion.
Spotting the capabilities of Dion and opportunities ahead,One of India’s largest Software firm Tech Mahindra took a 16 % stake in Dion in last Financial year by subscribing shares worth Rs.35 Cr. This strategic partnership is expected to bring good results going forward . Mr. C P Gurnani, CEO and MD of Tech Mahindra stated about this acquisition as “We are extremely impressed by Dion’s products and solutions , its ability to truly partner with its clients, and most of all, its top-class management team. We are convinced that in time to come, Dion will become one of the foremost software solutions providers to capital markets globally and are keen on participating in Dion’s promising future.”
After few years of slump, Global financial industry is looking up now .Dion is now taking various efforts to tap the emerging opportunities and taking business as serious . At a time its close rival Financial Technologies is facing multiple issues Dion is now actively planning to tap local market too . In this effort ,financial and technical support from a company like Tech Mahindra will be an added advantage for Dion .Last week company empaneled with BSE for providing IML (Intermediate Message Layer ) Based trading services to BSE trading members in the Currency Derivatives Segment .BSE circular Link HERE
Read Dion's recent order wins HERE
Financials and Conclusion
On a consolidated basis ,company’s top line spurted from Rs.90 Cr in 2010 to Rs.223 Cr in 2014 . Its bottom line is still in loss on an yearly basis .In last financial year , to write of its entire accumulated loss Dion reduced its equity capital by half .Promoters are holding 53 % stake and other FI’s and Tech Mahindra together holding another 34 % stake. Because of low floating stock ,liquidity is low in this counter.If you are a risk averse investor and considering conventional valuation parameters for investment decisions ,it is not a stock for you .I believe, due to various reasons ,company is at an inflection point and the better days are just coming.But it is a long term story and a stock only for those with enough patience.Remember ,this is not a 'valuepick' but a stock suggestion based on the anticipated future growth of company .Dion is listed only in BSE and currently trading around Rs.66
Link to Company website HERE
Disc: It is safe to assume that I have vested interest in Dion