IPO: Protean eGov Technologies Limited

Protean eGov Technologies, an IT-enabled solutions company, has come out with its IPO (initial public offering). Here's a breakdown of the company's strengths, weaknesses, and growth prospects to help investors make an informed decision. In a nutshell Quality : The three-year average ROE and ROCE (FY21-FY23) of Protean eGov Technologies are 14.9 and 11.7 per cent, respectively. For the trailing 12 months ended June 2023, the company's ROE and ROCE were 13.3 and 12.4 per cent, respectively. Growth : Its topline and PAT have grown 11 and 8 per cent per annum, respectively, during FY21-FY23. Valuation : The stock will be priced at a P/E and P/B of 27.2 and 3.6 times. Overview : The company is poised to benefit from the government's increasing thrust for digital penetration across the population. About Protean eGov Technologies Protean eGov Technologies is one of the key IT solutions providers for the government. It creates digital public infrastructure for various ministries like finance, information & broadcasting, education, skill development, and more. Protean was initially set up as a depository in 1995 and created a systemically important national infrastructure for capital market development in India. It has been the chief architect and implementer for some of the most critical and large-scale technology infrastructure projects in India. Since its inception, and as of June 30, 2023, it has implemented and managed 19 projects spread across seven ministries and autonomous bodies, ushering change in the public delivery of services. Strengths of Protean eGov Technologies Market leader in universal, citizen-centric and population-scale e-governance solutions: It continues to be a market leader in the provision of e-governance services such as management of the TIN (58 per cent), PAN processing (45 per cent), NPS (94 per cent) and Atal Pension Yojana (100 per cent). Diversified, granular and annuity-based service offerings: Its diversified service offerings are spread across sectors such as tax administration, pension record-keeping solutions, national identity and identity authentication solutions, education and skill financing solutions. A significant portion of its revenue generated from its offerings is based on a per-transaction basis, leading to substantial granularity and consequent revenue stability. Weaknesses of Protean eGov Technologies Dependent on projects awarded by government entities and agencies: The company solely relies on the government for its operations. In case the company is not able to get projects or if there are delays in payments, then it would be a huge issue for the company. IPO details Total IPO size (Rs cr) 490 Offer for sale (Rs cr) 490 Fresh issue (Rs cr) - Price band (Rs) 752-792 Subscription dates November 6, 7 and 8, 2023 Purpose of issue Only offer for sale Post-IPO M-cap (Rs cr) 3203 Net worth (Rs cr) 888 Promoter holding (%) 0 Price/earnings ratio (P/E) 27.2 Price/book ratio (P/B) 3.6 Financial history Key financials 2Y CAGR (%) TTM FY2