Protean eGov Tech IPO booked nearly 5 times; issue closes for bidding today

The initial public offering (IPO) of Protean eGov Technologies continued to see a decent response from the investors during the third and final of the bidding process. However, institutional investors remained silent early in the day. The issue had sailed through on the first day of the bidding, while it ended day two with 3.21 times subscription.

Protean eGov Technologies IPO is being sold in the fixed price band of Rs 752-792 apiece with a lot size of 18 equity shares. The e-Governance solutions provider, formerly known as NSDL e-Governance Infrastructure, is looking to raise Rs 490.33 crore via IPO route, which is entirely an offer-for-sale (OFS) of up to 6.19 crore shares.

According to the data, the investors made bids for 2,15,90,766 equity shares, or 4.93 times, compared to the 43,78,700 equity shares offered for the subscription by 11.50 am on Wednesday, November 8. The three-day bidding, which kicked off on Monday, November 6, will conclude today.

The portion reserved for retail investors was subscribed 5.54 times, while the allocation for non-institutional investors (NIIs) saw a subscription of 11.17 times. The allocation for employees was booked 1.03 times. However, the quota set aside for qualified institutional bidders (QIBs) was booked merely 16 per cent as of the same time.

Protean eGov Tech is engaged in the business of developing citizen-centric and population scale e-governance solutions. It has played a vital role in development of capital market infrastructure in India and implemented some of the most crucial technological infrastructure in the country.

Brokerage firms tracking the IPO are mostly positive on the IPO and have a subscribe rating citing its strong hold in the digital infrastructure business and governance solutions, experienced and expertise management, entry barriers for the solutions and niche business model. However, entire OFS and rich valuations pose some risk for the issue.

"Given the company’s leadership position in e-governance solutions and offers focused on new sectors like health, education and skills, agriculture with the expansion plans to reach neighbouring countries for eGovernance opportunities, we recommend only long-term investors to 'Subscribe with risk' this IPO," said Mehta Equities.

Protean eGov Technologies is a pioneer and a market leader in universal, citizen-centric and population-scale e-governance solutions. It has expansion plans to reach neighboring countries for eGovernance. Looking at all the factors, risks and opportunities the investors may apply for the issue with a medium to long-term view, said Sushil Finance.

On Friday, Protean eGov Technologies raised Rs 143.5 crore from anchor investors by allocating 8,12,300 shares at an issue price of Rs 792 per share. IIFL Securities Equirus Capital, ICICI Securities, and Nomura Financial Advisory and Securities are the lead managers to the issue, while Link Intime India is the registrar.  Shares of the company will be listed on BSE only.

The financial performance of the company has been mixed, with an increase in its top-line numbers but a decline in its profit. However, Protean eGov Technologies faces some risks too, such as its dependence on government contracts, competition from other enterprise solution companies, and regulatory risks, said Swastika Investmart.

"The IPO is coming at a P/E valuation of 29.9 times, and though the company does not have any listed peers, the issue is looking reasonably priced. Considering all these factors, investors may apply for this IPO," the brokerage added.

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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