Protean eGov Technologies IPO – Positive Aspects, Risks and Review

The Protean eGov Technologies IPO has captured the attention of investors, offering a unique opportunity to delve into the realm of e-governance solutions. In this article, we will dissect the key details surrounding the IPO, including its financial performance, subscription status, listing particulars, and expert recommendations.

Protean eGov Technologies IPO Details

Opening Date: November 6, 2023 Closing Date: November 8, 2023 Listing Date: November 13, 2023 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

About Protean eGov Technologies Limited:

Protean eGov Technologies emerges as a key player in India’s IT-enabled solutions landscape, specializing in citizen-centric and population-scale e-governance solutions. With roots dating back to 1995, the company has significantly contributed to capital market development and positioned itself as a leader in profitability, operating income, and margin in Fiscal 2023.

Financial Insights: A Closer Look at Performance

The financial landscape of Protean eGov Technologies reveals a consistent upward trajectory. Assets, Revenue, Profit After Tax, Net Worth, and Reserves & Surplus have demonstrated sustained growth. Fiscal Year 2023 showcased robust financial performance, painting a picture of stability and resilience.

Positive Aspects:

1. Pioneer in E-Governance: Protean eGov Technologies stands tall as a pioneer and market leader in universal, citizen-centric e-governance solutions.
2. Inclusive Infrastructure: Boasting a large physical infrastructure with a pan-India network, the company ensures inclusivity in its services.
3. Experienced Leadership: With an experienced senior management team committed to strong corporate governance, Protean eGov Technologies inspires confidence.
4. Financial Health: The company’s financial performance is marked by consistent growth, leading in profitability, operating income, and margin.

Risk Factors:

1. IPO Proceeds Allocation: Investors should note that the IPO proceeds are solely from Offer for Sale (OFS), with no direct benefit to the company.
2. Dependency on Government Projects: A substantial reliance on government projects exposes the company to inherent risks tied to the government’s policies and decision-making.
3. IT Infrastructure Risks: The dependence on external IT infrastructure and the potential for client discontinuation pose significant challenges.
4. Litigation Risks: The presence of pending litigations introduces an element of uncertainty and risk.

IPO Price Valuation: Finding the Right Balance

The IPO is priced in the range of Rs 752 to Rs 792 per share, with a P/E ratio based on FY23 EPS ranging from 27x to 30x. While considered fully priced, the Grey Market Premium (GMP) currently fluctuates between Rs 110 and Rs 120. Investors are cautioned to interpret GMP as an indication, recognizing its limitations in reliability.

Subscription Status: Investor Sentiment Unveiled

The Protean eGov Technologies IPO witnessed robust investor interest, with an overall subscription status of 23.86 times on November 8, 2023. The subscription figures across different categories are as follows:

• Retail Category: 8.93 times
• QIB Category: 46.94 times
• NII Category: 31.62 times
• bNII (bids above ₹10L): 33.14 times
• sNII (bids below ₹10L): 28.58 times
• Employee Category: 1.49 times

Despite the impressive subscription figures, caution is advised, considering the company’s reliance on government projects, associated risks, and the fully priced nature of the IPO.

Listing Details: Unveiling Market Debut

The Protean eGov Technologies IPO marked its debut on BSE on November 13, 2023. The issue size amounted to Rs 490.33 crores, and the shares were offered in the price band of ₹752 to ₹792 per share.

• Listing Price: ₹792 per share
• Opening Price: ₹792.00
• Low: ₹775.00
• High: ₹890.90
• Last Trade: ₹883.00

Financial Information: A Critical Examination

Diving into the financials of Protean eGov Technologies, we observe a nuanced picture. While revenue increased by 1.78%, profit after tax experienced a -25.63% dip between the financial years ending March 31, 2023, and March 31, 2022. Key performance indicators include a Market Cap of ₹3203.38 Cr, P/E (x) of 29.91, ROE of 12.49%, ROCE of 16.13%, and EPS of ₹26.48.

Expert Recommendations: Dilip Davda’s Perspective

Market expert Dilip Davda suggests that the issue appears fully priced based on FY24 annualized earnings. Investors are advised to consider parking funds for medium to long-term rewards, weighing the risk factors associated with the IPO.

Contact Details and IPO Recommendation: A Holistic Approach

For investors seeking more information or contemplating their decisions, Protean eGov Technologies can be reached at Times Tower, 1st Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai 400 013. Phone: +91 22 4090 4242, Email: cs@proteantech.in, Website: Protean eGov Technologies.

In conclusion, the Protean eGov Technologies IPO presents an intriguing investment opportunity, backed by its leadership in e-governance solutions and positive financial performance. However, potential risks, including dependence on government projects and the absence of direct benefits from IPO proceeds, should be carefully considered. Investors are urged to conduct thorough due diligence, assessing both internal and external risk factors, before making informed subscription decisions.

Disclaimer: This article provides an overview based on available information, and investors are strongly advised to conduct thorough due diligence before making investment decisions.

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