11 hours ago
Shares of Protean eGov Technologies Ltd. fell to a 20% lower circuit on Monday, May 19, after it informed the exchanges over the weekend that it has not been considered for the next round of the RFP selection process for the PAN 2.0 project by the Income Tax Department.
Protean, in its exchange filing on Sunday, highlighted that the Income Tax Department had issued a notice requesting proposals and inviting bids for the selection of a Managed Service Provider (MSP) for design, development, implementation, operations and maintenance of its PAN 2.0 project.
The company had participated in the RFP (Request For Proposals) bid for the said project, the filing added.
"In our understanding, this is a project for technology revamp which includes design, development and other aspects of PAN systems at the income tax department and at present, it appears to have limited or minimal impact on our ongoing PAN processing issuance services under the existing mandate with the Income Tax Department," the company statement said.
Veteran Investor Ramesh Damani features among the public shareholders of Protean eGov Technologies, with a 1.05% stake at the end of the March quarter. Ajay Aggarwal also has a 1.12% stake.
While Protean has no promoter shareholding, lenders like Canara Bank (1.23%), Bank of Baroda (1.54%), Punjab Bank (2.25%), Axis Bank (3.18%), and State Bank of India
(4.93%) own stake in the company.
Majority of the public shareholding in Protean eGov Technologies is held by small retail shareholders, or those with authorised share capital up to ₹2 lakh. At the end of the March quarter, as many as 1.98 lakh retail shareholders had a 39% stake in the company.
Brokerage firm Equirus wrote in its note that the news is a negative one for the company as PAN services contribute to nearly 50% of the company's topline and that the segment that has historically generated free cash to fund new initiatives, is now under threat.
As a result, the brokerage has downgraded the stock to "sell" from its earlier rating of "add" and cut its price target to ₹900 from ₹1,730 earlier.
On the flip side, Anand Rathi wrote in its note that while the move is sentimentally negative in the near-term, but it sees limited financial impact as core PAN operations remain unaffected.
Out of the six analysts that have coverage on Protean eGov Technologies, five of them have a "buy" rating, while the other one has a "hold" recommendation.
Shares of Protean eGov Technologies are down 20% in trading on Monday at ₹1,143.20. With this, the stock has reversed all its gains of the year, and now trades 22% lower on a year-to-date basis. The management will be holding an analyst call at 12:30 PM.
