Protean eGov Technologies IPO Risks and Review

Protean eGov Technologies IPO is slated to become available for subscription starting on November 6, 2023. The company, previously known as NSDL e-Governance Infrastructure Limited, specializes in crafting citizen-centric and population-scale e-governance solutions. This article aims to furnish comprehensive information about the Protean eGov Technologies IPO, encompassing critical details, favorable attributes, potential risk factors, and a comprehensive review

Protean eGov Technologies IPO Details

IPO Opening Date 06-Nov-23
IPO Closing Date 08-Nov-23
IPO Listing Date 17-Nov-23
Issue Type Book Built Issue IPO
Face Value Rs 10 per equity share
IPO Price band Rs 752 to Rs 792 per equity share
Lot Size 18 Shares
Listing at BSE and NSE
Total Issue Size Rs. 490.33 Crores
    Fresh issue     Rs.  Crores
    OFS     Rs. 490.33 Crores
Employee Discount Rs.75 Per Share

About Protean eGov Technologies Limited

The company holds a prominent position in India as a provider of IT-enabled solutions, specializing in the conceptualization, development, and implementation of large-scale, cutting-edge technology solutions for the nation.

They have a strong partnership with the government, boasting extensive expertise in establishing digital public infrastructure and pioneering innovative e-governance solutions that place citizens at the forefront. Originally established as a depository in 1995, they played a pivotal role in creating a nationally significant infrastructure for the development of India’s capital markets.

The company firmly believes that their solutions have played a crucial role in identifying and rectifying bottlenecks within government services, enhancing transparency and efficiency, transforming the delivery of public services, and driving down service delivery costs. In Fiscal 2023, they emerged as one of the foremost Indian companies in the e-governance sector, excelling in profitability, operating income, operating profit, and operating profit margin.

Protean eGov Technologies Ltd – Financial Insights

Financial Year ending / Period ending (Amt in Crores)
Period Ended 31-Mar-21 31-Mar-22 31-Mar-23 30-Jun-23
Assets 862.39 988.14 1,104.10 1,133.86
Revenue 652.03 770.18 783.87 233.17
Profit After Tax 92.19 143.94 107.04 32.21
Net Worth 667.46 788.00 856.94 888.10
Reserves and Surplus 627.14 747.43 816.33 847.48

Protean eGov Technologies IPO – Positive Aspects

  1. Pioneering Leadership: The company stands as a pioneer and market leader in the development of universal, citizen-centric, and population-scale e-governance solutions.
  2. Extensive Physical Infrastructure: With a comprehensive pan-India network and scale, the company ensures inclusivity through a diverse range of granular, annuity-based service offerings, reaching a broad and varied audience.
  3. Expert Senior Management: The company benefits from an experienced senior management team, supported by robust corporate governance standards and backed by prestigious investors, ensuring efficient and ethical business operations.
  4. Consistent Financial Excellence: The company boasts a strong track record of maintaining consistently healthy financial performance, reflecting stability and reliability in its operations

Protean eGov Technologies IPO – Risk Factors

Here are the key points summarizing the risks associated with the company:

  1. Solely Offer for Sale (OFS) IPO: The IPO proceeds are solely from Offer for Sale (OFS), with the funds going to selling shareholders, and the company does not directly benefit from this.
  2. Government Dependency: The company’s heavy reliance on projects awarded by government entities and agencies exposes them to inherent risks associated with government dealings, which could have a negative impact on their business.
  3. Client Requirement Challenges: Inability to meet clients’ business requirements may lead to the discontinuation of contracts, potentially harming the company’s business.
  4. Technology and Infrastructure Dependence: The company relies on telecommunications, information technology systems, networks, and third-party infrastructure to operate its business. Any disruptions or breakdowns in these systems or technical infrastructure could hinder their ability to deliver products and services effectively.
  5. Contract Termination: Client contracts can typically be terminated without cause, which could adversely affect the company’s revenues and profitability.
  6. Legal Proceedings: The company is involved in pending litigations, and an adverse decision in these proceedings could have a significant impact on the company’s financials.

Investors are strongly advised to thoroughly review all the risk factors detailed in the Red Herring Prospectus (RHP) before making investment decisions.

 Price valuation of Protean eGov TechnologiesIPO

Its IPO price band is Rs 752 to 792 per share

  • If we consider last year FY23 EPS of Rs 26.48, P/E ratio works out to be 30x
  • If we consider last 3 years weighted EPS of Rs 28.99, P/E ratio works out to be 27x
  • There are no listed peers, hence we cannot say whether the issue price is over priced or under priced. However considering P/E 27x to 30x, we can say the issue is fully priced.

IPO Grey Market Premium

GMP, or Grey Market Premium, is nothing but the premium at which the shares are trading in the offline market. The Protean eGov Tech IPO GMP currently ranges between Rs 110 and Rs 120.For Daily GMP Update follow us on Youtube – Click here

Protean eGov Technologies IPO – Should you Subscribe or Avoid?

The company is a pioneer and market leader in universal, citizen-centric, and population-scale e-governance solutions. The company has generated strong revenue and margin growth in the last few years.

On the other side, the IPO proceeds would go to selling shareholders, and the company would not receive any funds. Its dependency on government entities for projects is a major risk. The company relies on telecom, IT systems, networks, and infrastructure to operate its business, and any disruption among them can affect the company’s business.

Its IPO price is also fully priced.

Investors who understand all these pros and cons, and after referring to the internal and external risk factors in Protean eGovt Tech IPO RHP, can consider investing in this IPO

Protean eGov Technologies IPO

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