Protean Egov Technologies Ltd IPO

Pioneer and market leader in universal, citizen centric and population scale e-governance solutions.

Secure, scalable and advanced technology infrastructure.

Large physical infrastructure with pan-India network and scale resulting in inclusion.

Diversified, granular and annuity based service offerings.

Track record of healthy financial performance.

Experienced senior management team backed by strong corporate governance standards and supported by marquee investors

The company is substantially dependent on projects awarded by government entities and agencies and its relationship with GoI entities exposes it to risks inherent in doing business with them, which may adversely affect its business, results of operations and financial condition.

Its may not be able to provide business solutions that meet the company clients` requirements, which could lead to clients discontinuing their work with it, which in turn could harm its business.

The company relies on telecommunications and information technology systems, networks and third party infrastructure to operate its business and any interruption or breakdown in such systems, networks or infrastructure of the third parties its relies on or the company technical systems could impair its ability to effectively deliver its products and services.

Its business will suffer if the company fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and in the industries on which its focus.

If its pricing structures do not accurately anticipate the cost, complexity and duration of its work, then the company contracts could be unprofitable.

Its client contracts can typically be terminated without cause, which could negatively impact its revenues and profitability.

Its may become liable to the company clients and lose clients if its have defects or disruptions in its service or if the company provide poor service.

There are pending litigations against the Company. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties and may adversely affect its business, results of operations, cash flows and reputation.

Any delay in the collection of its dues and receivables from its clients may have a material and adverse effect on its results of operations and cash flows.

Its sales cycle is lengthy and depends upon many factors outside the company control, and could cause it to spend significant time and resources prior to earning associated revenues.

Its reputation could be at risk and the company may be liable to its clients or to regulators for damages caused by inadvertent disclosure of confidential information and sensitive data.

If the company is unable to meet its service level commitments, its reputation and results of operation could suffer.

Its business depends on a strong brand, and failing to maintain and enhance the company brand would impact its ability to expand the company`s business.

The Company is neither associated with nor related to National Securities Depository Limited. Further, the business of the Company is not similar to that of National Securities Depository Limited.

Its may not meet the selection criteria set for high value contracts by the Government.

Some aspects of its platform include open source software, and the company use of open source software could negatively affect its business, results of operations, financial condition, and future prospects.

Its may not be able to identify, monitor and manage risks or effectively implement its risk management policies.

Industry information included in this Red Herring Prospectus have been derived from an industry report exclusively commissioned by and paid for by it for the purposes of the Offer.

The company does not have a diverse base of clients from whom its awarded contracts and the loss of any client could have an adverse impact on its business, financial condition, results of operations and cash flows.

The company is engaged in conceptualizing, developing and executing nationally critical large scale greenfield technology projects and any inability to undertake these projects or satisfactorily deliver such projects could have an adverse impact on its business, financial condition, results of operations and cash flows. In addition, given the nature of such projects, its required to collect and store sensitive personal data which could result in increased scrutiny from regulatory bodies and the government.

Its business, financial condition and results of operations may be materially adversely affected by global health epidemics, such as COVID-19 outbreak.

If the company does not effectively manage its growth, including, among other things by improving its administrative, operational and financial processes and systems to manage its growth, the value of the company shareholders` investment may be harmed.

The prices that its can charge for the company e-governance services are dependent on recommended or mandatory fees fixed under the terms of the agreements entered into with Central or State Governments.

If the company is unable to protect its intellectual property and proprietary information, or if its infringe the intellectual property rights of others, its business, financial condition, cash flows and results of operations may be adversely affected.

The company face competition from global and Indian enterprise solution companies and any increase in global competition or access to advanced technical knowhow or process by its competitors may adversely affect the company business.

Acquisitions, strategic investments, and other strategic transactions could result in operating difficulties and could harm its business.

The company is required to obtain, renew or maintain statutory and regulatory permits, licenses and approvals to operate its business, and any delay or inability in obtaining, renewing or maintaining such permits, licenses and approvals could result in an adverse effect on its results of operations.

The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

The loss of key suppliers or their failure to deliver equipment or perform services in a timely or satisfactory manner could adversely affect it.

If the company is unable to establish and maintain an effective internal controls and compliance system, its business and reputation could be adversely affected.

The company depends on the continued service of its employees, and its business and growth prospects may be disrupted if the company lose its employees` services or if employee costs increase.

The company appoint contract labour for carrying out certain of its operations and its may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on its results of operations, cash flows and financial condition.

Its investments in technology, especially the company research and development activities, may not yield the intended results in a timely manner or at all, which may adversely affect its financial condition and results of operations.

The account aggregation business of its Subsidiary, Protean Account Aggregator Limited (formerly known as NSDL e-Governance Account Aggregator Limited), may not be viable as there is currently no certainty of revenue from account aggregation operations.

The company has had negative cash flows from operating activities in the past and may, in the future, experience similar negative cash flows.

Its insurance coverage could prove inadequate to satisfy potential claims or protect it from potential operational hazards and losses which may have a material adverse effect on its financial condition, results of operations and cash flows.

Its business may requires additional capital and failure to obtain such capital in a timely manner or at all could adversely affect its business plans and growth. If its issue fresh shares, it may result in shareholding dilution for an investor.

Its data centers could be harmed by prolonged power outages or shortages, increased costs of energy or general lack of availability of electrical resources.

The confidential information or data of its clients and users of the company services may be misappropriated by its employees or subcontractors and as a result, cause it to breach the company contractual obligations in relation to such confidential information.

Any deficiency in its billing and credit control and client management processes could materially and adversely affect its operations.

Certain of its branch offices are located on premises that are leased from third-parties pursuant to lease agreements, which its may be unable to renew on satisfactory terms or at all.

Compliance with know your customer ("KYC") regulations and data privacy norms may requires it to incur expenditure, which may adversely impact its financial condition and cash flows.

The loss of certificates, keys and passwords may result in a loss of access to its servers and the services of third parties, which may result in a loss of data, which could have a material adverse effect on its business, results of operations, cash flows and financial condition.

The company has certain contingent liabilities that have not been provided for in its financial statements, which if they materialise, may adversely affect its financial condition.

Wage pressures and increases in operating costs in India may prevent it from sustaining its competitive advantage and may reduce the company profit margins.

Grants of stock options under its employee stock option plan may result in a charge to its profit and loss account and, to that extent, reduce the company profitability and financial condition.

The Company was incorporated by 1995 and certain of its corporate records and filings with the RoC are not traceable. Its cannot assure you that regulatory proceedings or actions will not be initiated against it in the future and the company will not be subject to any penalty imposed by the competent regulatory authority in this regard.

Its Directors, Key Managerial Personnel and Senior Management have interests in the Company in addition to their remuneration and reimbursement of expenses.

The company has issued Equity Shares during the preceding twelve months at a price which may be below the Offer Price.

The Offer Price, market capitalization to total revenue multiple and price to earnings ratio based on the Offer Price of the Company, may not be indicative of the market price of the Equity Shares on listing.

Certain of its investments may be subject to market risk and the company has not made any provisions for a potential decline of the value of such investments.

The company has in this Red Herring Prospectus included certain non-GAAP financial and operational measures and certain other industry measures related to its operations and financial performance that may vary from any standard methodology that is applicable across the IT / ITES industry. Its relies on certain assumptions and estimates to calculate such measures, therefore such measures may not be comparable with financial, operational or industry related statistical information of similar nomenclature computed and presented by other similar companies.

Its ability to pay dividends in the future will depend on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

The company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.

Its clients may engage in certain transactions in or with countries or persons that are subject to U.S. and other sanctions.