Virtual Galaxy Infotech, listed at ₹180 price with a premium of 26.76%

A rising player in IT services and consulting, Virtual Galaxy Infotech Limited is set to get listed on the NSE SME platform through an IPO window scheduled from May 9 to May 14, 2025. The Nagpur-based company extends a gamut of technology solutions, including core banking software, cloud computing, e-governance, ERP systems, and many others, to industries such as banking, manufacturing, and education. 

Virtual Galaxy Infotech is famous for its flagship product, e-Banker, and has so far catered to more than 5,000 business locations in India and abroad, having a fairly wide reach across both public and private sector business enterprises.

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Virtual Galaxy Infotech Listing Details

The Virtual Galaxy Infotech IPO price band is set at ₹135–₹142 per share, with the minimum application size being 1,000 shares. Retail investors will require a minimum investment of ₹1,42,000 at the upper band. Investors are advised to bid at the cutoff price, as the issue may be oversubscribed.

• Listing Price: The Virtual Galaxy Infotech IPO share price is listed on the NSE SME platform on 19th May 2025 at ₹180, with an estimated market capitalization of ₹353.13 crore. 
• Investor Sentiment: Investors show strong confidence in Virtual Galaxy Infotech due to its net profit of ₹16.54 crore in FY24 and its focus on developing specialised technology solutions for the BFSI sector. The company’s steady financial growth and industry expertise continue to build positive market sentiment.

First-Day Trading Performance Outlook

Virtual Galaxy Infotech got listed on the NSE SME platform at ₹180 per share, matching analyst expectations of a moderate to steady debut. The company’s strong profit growth and growing demand for digital solutions in the BFSI sector have supported this positive market response. However, the post-issue P/E of 21.35 has raised some concerns among investors, as it may appear slightly stretched for an SME tech firm despite its recent performance surge.

Market Sentiment and Analysis

Founded in 1997, Virtual Galaxy Infotech has established itself in the BFSI tech space with clients across India and Africa. Its strong financials, ROE of 53.52%, and repeat revenue model have attracted investor interest.
Investor Response: Backed by robust growth and sector relevance, the IPO has drawn attention from long-term investors.
 

Growth Drivers and Challenges

Virtual Galaxy Infotech shows strong potential for long-term growth, driven by sector expertise and rising demand for digital banking solutions. However, it also faces typical SME risks and competitive pressures. Here's a concise assessment of its strategic advantages and prevailing challenges.

Growth Drivers:

• Strong BFSI Focus: Offers specialised digital solutions tailored for banks, NBFCs, and cooperatives with high client retention.
• Proven Product Suite: Flagship product e-Banker powers 5,000+ business locations across India and abroad.
• High Profitability Metrics: Impressive ROE of 53.52% and PAT margin of 26.04% signal efficient operations.
• International Expansion: Presence in Tanzania and Malawi supports future global growth.

Challenges:

• Valuation Concerns: Post-issue P/E of 21.35 may be viewed as high for an SME tech firm.
• Sector Competition: Faces strong competition from established IT and fintech players.
• SME Market Liquidity: Lower trading volumes can lead to price volatility post-listing.
• Recent Profit Surge: Sudden spike in FY24 profits raises sustainability questions.

Utilisation of IPO Proceeds

The funds from the IPO will be used for the expansion and general business operations of Virtual Galaxy Infotech, as follows:

• New Development Facility: ₹34.26 crore for setting up an additional software development centre in Nagpur, Maharashtra.
• Technology & Product Enhancement: ₹5.05 crore for procuring advanced infrastructure like GPUs, servers, and for enhancing existing software through skilled hiring.
• Business Development: ₹14.06 crore for marketing, branding, and expanding customer outreach.
• Debt Repayment: ₹3 crore towards clearing existing borrowings.
• General Corporate Purposes: The rest of the funds will be used for operational needs and strategic initiatives to support long-term growth.

Financial Performance of Virtual Galaxy Infotech

Virtual Galaxy Infotech has shown strong financial growth and improved profitability in recent years:
Revenue: The company booked a revenue of ₹101.37 crore up to 31 Dec 2024, denoting an augmented demand for digital solutions in the BFSI and enterprise sectors.

• Net Profit: ₹27.42 crore as at 31 Dec 2024, meaning higher margin and operational efficiency.
• Net Worth: Although net worth increased from ₹20.14 crore in FY22 to ₹85.86 crore as of Dec 2024, it means achievement made through a disciplined method of capital management with a respectable client base.

The entry of Virtual Galaxy Infotech into the NSE SME platform is a very big step in the journey of the company. The company has good financials, proven products such as e-Banker, and increased acceptance in the Indian and foreign markets, so it is well equipped for further expansion. While the IPO valuation may seem a shade on the costlier side, given the company's track record and future potential, it is a worthwhile proposition for an investor desirous of placing money in digital banking and IT services.