Protean eGov Technologies IPO GMP (Grey Market Premium)

About Protean eGov Technologies IPO

Protean eGov Technologies IPO (formerly known as NSDL E-Governance Infrastructure) opens for subscription on 06th November 2023 and closes on 08th November 2023. The stock of Protean eGov Technologies Ltd has a face value of ₹10 per share and the price band for the book built IPO has been set in the price range of ₹752 to ₹792. The final price will be discovered within this band. It must be noted here that the IPO of Protean eGov Technologies Ltd will be entirely an offer for sale (OFS) with no fresh issue component in the IPO. The offer for sale (OFS) portion of the IPO of Protean eGov Technologies Ltd comprises the sale of 61,91,000 shares (61.91 lakh shares), which at the upper price band of ₹792 per share translates into an offer for sale (OFS) size of ₹490.33 crore. Protean eGov Technologies Ltd  is a professionally managed company with no promoter group. The OFS selling will be entirely by the investor shareholders including NSE Investments Ltd, SUUTI (UTI administrator), HDFC Bank, Axis Bank, Deutsche Bank, Union Bank of India and 360 One Special Opportunities Fund (part of the IIFL group).

In the absence of fresh issue, the offer for sale (OFS) portion will also be the total size of the IPO. Therefore, the overall IPO of Protean eGov Technologies Ltd will also mirror the OFS and will entail the sale of 61,91,000 shares (61.91 lakh shares), which at the upper price band of ₹792 per share will translate into total IPO issue size of ₹490.33 crore. That will be the overall IPO size. The offer for sale will merely result in a transfer of ownership with a total of 11 shareholders offering shares under the OFS portion. The IPO will be lead managed by ICICI Securities, Equirus Capital, IIFL Securities and Nomura Financial Advisory acting as the book running lead managers (BRLMs) to the issue. Link Intime India Private Ltd will be the registrar to the issue. Since Protean eGov Technologies Ltd has NSE Investments as one of its shareholders, the stock would only be listed on the BSE.

About Protean eGov Technologies IPO GMP

The grey market price (GMP) trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of Protean eGov Technologies Ltd, we already have GMP data for the last 2 days, which should give a reasonable picture of the likely listing.

There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, especially the liquidity conditions in the market. Secondly, the extent of subscription for the IPO has a deep impact on the GMP as it is indicative of investor interest in the stock. GMP can also technically be in negative, which means the stock would list at a discount to the issue price.

There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has been observed to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance of the stock would be.

How has the GMP panned out in last few days?

GMP tends to be a good mirror of the real stock story. More than the actual price, it is the GMP trend over time that gives insights about which direction the wind is blowing. Here is a quick GMP summary for Protean eGov Technologies IPO for which data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹111, but has remained steady at the same price of ₹94 for which GMP data is available. The IPO price of Protean eGov Technologies Ltd was only announced on the morning of 01st November, so the actual GMP may still take some time to manifest the real underlying value. Of course, we have to await for the actual subscription numbers to flow in after the issue opens for subscription on 06th November 2023 and also watch the progress, as that would have a very significant impact on the GMP. In the past, stocks which got oversubscribed in the IPO also saw a very robust positive shift in the grey market pricing. For a start, Protean eGov Technologies Ltd has shown good traction in the grey market.

If you consider the upper end of price band of the IPO of Protean eGov Technologies Ltd at ₹792, then the likely listing price is being signalled at around ₹903 per share as per the GMP indicator on 02nd November 2023. This is dynamic and keeps changing. One data point to track will be the subscription update on the stock as that would chart the GMP course.

The GMP of ₹111 on the upper end of the book built IPO price of ₹792 indicates a listing premium of a healthy 14.02% for Protean eGov Technologies Ltd over the IPO issue price. That pre-supposes a listing price of approximately ₹903 per share, when Protean eGov Technologies Ltd lists on 17th November 2023. Of course, these are purely approximations, so you must keep a margin of safety. One needs to observe the trend of GMP closely as that gives the best hints on listing status. Look at the time series trend instead of just the GMP absolute numbers.

How to apply for the Protean eGov Technologies IPO?

Investors can apply for the Protean eGov Technologies IPO in minimum lot sizes. The lot size only applies for the IPO and once it is listed then it can be even traded in multiples of 1 shares since it is a mainboard issue. Investors in the IPO can only invest in minimum lot size and in multiples thereof. In the case of Protean eGov Technologies Ltd, the minimum lot size is 18 shares with upper band indicative value of ₹14,256. In short, IPO investors have to apply in lots that are in multiples of 18 shares only. The table below captures the minimum and maximum lots sizes applicable for different categories of investors in the Protean eGov Technologies IPO.

It may be noted here that for the B-HNI category and for the QIB (qualified institutional buyer) category, there are no upper limits applicable.

Quota allocation across IPO investor categories

As per the terms of the offer, there will first be an employee allocation made and the balance shares would constitute the net offer to the public. The net offer will be divided between the qualified institutional buyers (QIBs), HNI / NII investors and the retail investors. The anchor portion will be carved out of the QIB allocation and the QIB portion as part of the IPO would be reduced to the extent of the anchor allocation, which will be done a day ahead of the opening of the IPO. The table captures the allocation to various categories.

Employees will be entitled to a discount of ₹75 on the discovered IPO price.

The issue opens for subscription on 06th November 2023 and closes for subscription on 08th November 2023 (both days inclusive). The basis of allotment will be finalized on 13th November 2023 and the refunds will be initiated on 15th November 2023. In addition, the demat credits are expected to happen on 16th November 2023 and the stock is scheduled to list on 17th November 2023 on the NSE and the BSE. It is a mainboard issue so it will be traded in the regular EQ listing on the NSE.

Also Read what you must know about Protean eGov Technologies IPO?