Introduction:
Amid the rapidly evolving digital landscape, governments worldwide are embracing innovative technologies to enhance efficiency and transparency. One company at the forefront of this transformation in India is Protean eGov Technologies. The company recently made waves by announcing its Initial Public Offering (IPO) worth Rs. 490.33 crores.
On the first day, the IPO got oversubscribed 1.49 times in the retail category, attracting a sharp response from investors. Continue reading to learn more details about the Protean eGov Technologies IPO and decide if you should invest in it or not.
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About Protean eGov Technologies Limited
Incorporated in 1995, Protean eGov Technologies Limited is a leading IT-enabled digital solutions provider in India. It was formerly known as NSDL e-Governance Infrastructure Limited. To date, the company has played a crucial role in developing national infrastructure for capital markets. It works directly with several ministries and has implemented more than 19 critical projects, including Tax Information Network (TIN), PAN card issuance, Aadhar database, National Pension System (NPS), and e-KYC services.
As of 30 June 2023, Protean eGov Technologies Ltd. had a 45% market share in PAN card issuance, 58% in TIN, 94% in NPS, and 100% in Atal Pension Yojana (APY). The company has decided to leverage its expertise in IT and ITES services and expand its footprints to selective jurisdictions outside India.
Key Strengths of Protean eGov Technologies Limited
Below are the key strengths of Protean eGov Technologies Ltd. as reflected in its Draft Red Herring Prospectus (DRHP) released by the Securities and Exchange Board of India (SEBI):
- One of the leading providers of citizen-centric e-governance solutions in India
- Boasts an advanced infrastructure that has helped the company scale greater heights
- The company has made significant investments in technologies that can strengthen its competitive advantage
- The company has a PAN-India network that helps generate significant revenues
- A long-term track record of healthy financial performances
- Known for providing diversified, granular, and annuity-based service offerings
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Key Risks or Weaknesses Highlighted
The key risks or weaknesses associated with Protean eGov Technologies Ltd. include:
- A significant portion of the revenue is derived from limited clients
- The company primarily depends on projects awarded by the government for its revenues
- Potential changes in technology, industry standards, or client preferences may adversely impact the business
- The company is prone to data theft and cyber attacks
- Operates in a rapidly evolving and highly competitive industry
Core Financials of the Company
A company’s financials reflect its ability to grow in the future. It also indicates the potential it holds for prospective investors in its IPO. Below are the key financials of Protean eGov Technologies Ltd. as portrayed in the RHP dated 30 October 2023 on the SEBI website:
*Amount in Crores
As you can see in the table, the company’s net worth and revenues have grown steadily in the last three financial years. However, the profits are rather erratic due to the implementation of different projects. The EBITDA and EPS are fairly attractive, justifying the swift response the IPO has received from the investors.
Details of the IPO
Protean eGov Technologies IPO opened for public subscription on Monday, 6 November 2023, and on the first itself, the issue got fully subscribed in the retail category. The IPO comprises purely an offer for sale worth Rs. 490.33 crores. The price band for the IPO has been fixed as Rs. 752 to Rs. 792 per share.
As a retail investor, you can apply for at least 18 shares (one lot) and in multiples thereof by Thursday, 8 November 2023. More details of the IPO are depicted in the table below:
To conclude
Protean eGov Technologies IPO has already created a buzz in the primary market. As an investor, you can subscribe for long-term profits or listing gains. However, back your investment decision with adequate research and market analysis. If you need a Demat account to invest in an IPO, you can open one for free with Motilal Oswal.
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