ONDC stands for “Open Network for Digital Commerce,” a government-backed initiative aimed at reshaping India’s e-commerce landscape. A network that connects buyers and sellers directly, independent of any single platform. ONDC is an open ecosystem in which competition thrives and consumer choice reigns supreme.
Government initiate ONDC
While India’s e-commerce sector has grown rapidly, concerns have arisen about the dominance of a few major platforms. These platforms can impose pricing, limit seller reach, and, ultimately, limit consumer options.
ONDC aims to address these issues by developing a free and open protocol that can be accessed by any buyer or seller app. This promotes a more competitive marketplace, empowering both entrepreneurs and consumers.
Benefits of ONDC
ONDC will provide consumers with more options, lower prices, support for local businesses, and data privacy control. Sellers benefit from direct connections, lower costs, a broader reach, and greater flexibility.
Investors Relation
Protean eGov Technologies Limited and the Quality Council of India are the founding members. BSE Investments Limited, NSE Investments Limited, CSC e-Governance Services India Limited, Central Depository Services (India) Limited, and National Securities Depositories Limited (NSDL) are the other Institutions and 12 plus Banks invested in ONDC.
Benefit to the investors
Investment in the ONDC gives the early advantages in open e-commerce, associating their brand with a positive government initiative. ONDC’s extensive network opens up new business opportunities.
Additionally, its projected success ensures long-term growth, potentially increasing company valuation. This move positions them to benefit from the changing e-commerce landscape. It’s a gateway to a thriving ecosystem of small businesses.
Here are the companies that recently acquired a stake in ONDC:
Protean eGov Technologies Ltd
Protean eGov Technologies Limited has made an additional equity investment of Rs. 10 crores in Open Network for Digital Commerce (ONDC) to contribute towards the growth and expansion plans of ONDC.
ONDC has granted the Company 10 Lakh equity shares, valued at Rs. 100 each, on December 13, 2023. Currently, the company’s total equity investment in ONDC is Rs. 20 crores or 4.26 percent of the capital of equity shares.
In the last five years, the company has kept its debt at zero and has a net profit margin of 14 percent with an average return on equity of 15 for the past three years.
Protean eGov Technologies Limited, formerly known as NSDL e-Governance Infrastructure Ltd, was founded in December 1995 and is a company that develops population-scale and citizen-centric e-governance solutions.
RBL Bank Ltd
RBL Bank Limited has made a 40 crore investment in the Open Network for Digital Commerce (ONDC) to contribute to ONDC’s goal of developing and transforming the Indian digital commerce ecosystem, according to the filling.
On December 13, 2023, RBL Bank Ltd acquired 40 lakh equity shares valued at Rs 100 which is 8.51 percent of the ONDC.
The bank has a low price-to-earnings (PE) ratio of 14 compared to its peers with a CASA ratio of 37 and a Net Interest margin of 4.5.
RBL bank’s net revenue increased by 32 percent year over year, from Rs 2,263 crore in Q2FY23 to Rs 3,007 crore in Q2FY24. Also, the company’s net profit rose by 76.5 percent year over year, from Rs 187.5 crores in Q2FY23 to Rs 331 crores in Q2FY24.
RBL Bank is a banking company that provides a wide range of banking and financial services such as wholesale banking, retail banking, treasury operations, and other banking-related activities.
Written by Sriram KV
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