Protean eGov Technologies files draft papers with SEBI to raise funds via IPO

Protean eGov Technologies Ltd, which issues Pan Cards and helps government agencies in e-governance projects, has filed a draft red herring prospectus with the Securities Exchange Board of India (SEBI) to raise funds via an initial public offering.

The IPO consists of a pure offer for sale (OFS) of 12.08 million shares by its existing promoters and shareholders.

The OFS comprises up to 1.10 million shares by IIFL Special Opportunities Fund, up to 7.63 lakh shares by IIFL Special Opportunities Fund Series 2, up to 3.53 lakh shares by IIFL Special Opportunities Fund Series 3, up to 9.46 lakh shares by IIFL Special Opportunities Fund Series 4, up to 7.37 lakh shares by IIFL Special Opportunities Fund Series 5, 4.31 lakh shares by Administrator of the specified undertaking of the Unit Trust of India, up to 3.16 million shares by NSE Investments Ltd, up to 7.88 lakh shares by HDFC Bank, up to 1.26 million shares by Axis Bank and up to 7.09 lakh shares by Union Bank of India.

ICICI Securities, Equirus Capital Pvt Ltd, IIFL Securities Ltd, Nomura Financial Advisory and Securities India Pvt Ltd are the book running lead managers to the issue.

The company's shareholders include financial institutions such as IIFL, NSE Investments Limited, SUUTI, Citicorp Finance India Limited and certain public and private sector banks such as State Bank of India, Punjab National Bank, Union Bank of India, Bank of Baroda and Canara Bank, HDFC Bank Limited, Axis Bank Limited, Deutsche Bank A.G, The Hong Kong and Shanghai Banking Corporation Limited, Standard Chartered Bank, among others.

Protean eGov Technologies, formerly known as NSDL e-Governance Infrastructure Ltd, is serving in establishing public digital infrastructure and creating e-governance interventions, which includes the Tax information network, PAN card issuance service, record keeping for Central Pension system and Adhaar authentication and e-KYC services.

The firm has issued over 350 million PAN since commencement and has over 46.8 percent market share as of June 2021. Around 1.85 million deductors filed TDS returns electronically via TIN systems in FY21 which has a 60 percent market share.

It was originally set up as a depository in 1995 and created a systemically important national infrastructure for capital market development in India. Since inception the firm implemented and managed 18 projects spread across seven ministries and autonomous bodies ushering change in public delivery of services.

For June quarter 2021, its revenue from operations was at Rs 134.51 crore, up 39.53 percent from Rs 96.40 crore a year ago. Net profit for the quarter stood at Rs 10.18 crore, down 12.8 percent from Rs 11.68 crore last year in the same quarter. For fiscal year 2021, revenue from operation declined 15.8 percent from a year ago to Rs 603.13 crore while net profit dropped 24.35 percent to Rs 92.19 crore.

The business model has resulted in positive cash flows over the years and cash flows from operating activities was at Rs 100.12 crore for FY21 against Rs 53.51 crore last year, the firm said in its DRHP. It has been profitable since FY99 and consistently declared and paid dividends since FY01, it added.