Key Points
- Virtual Galaxy Infotech’s IPO opened on May 9, 2025, and closed on May 14, 2025, aiming to raise ₹93.29 crores.
- The company, founded in 1997, specializes in IT services like SaaS, ERP, and banking software, serving BFSI and E-Governance sectors.
- Financials show strong growth, with 2024 revenue at ₹63.58 crores and profit at ₹16.54 crores, up from previous years.
- The IPO price band is ₹135–₹142 per share, with a minimum investment of ₹1,42,000 for retail investors.
- It seems likely that the IPO is attractive for long-term investors, given robust metrics like 53.52% ROE and 49.38% EBITDA margin.
Company and Financial Highlights
The company provides SaaS products, IT solutions, ERP, and banking software, mainly serving BFSI, ERP, and E-Governance sectors, with over 5000 bank branches and 300+ professionals. Financials for 2024 show revenue of ₹63.58 crores (up from ₹59.76 crores in 2023) and profit after tax of ₹16.54 crores (up from ₹0.72 crores), indicating strong growth.
Investment Considerations
Valuation metrics are robust, with a 53.52% ROE, 31.68% ROCE, and 49.38% EBITDA margin, suggesting good profitability and capital efficiency. However, as an SME IPO, it may face higher volatility, and reliance on the BFSI sector could pose risks. IPO Watch recommends “May Apply,” making it potentially attractive for long-term investors.
Detailed Analysis of Virtual Galaxy Infotech IPO
Virtual Galaxy Infotech, a global IT services and consulting company founded in September 1997, recently launched its SME Initial Public Offering (IPO) on May 9, 2025, with the aim of raising ₹93.29 crores through a fresh issue of shares. The IPO closed on May 14, 2025, and is scheduled to list on the NSE SME on May 19, 2025. This report provides a comprehensive analysis of the IPO, covering its structure, the company’s business model, financial performance, valuation metrics, peer comparison, and investment considerations, based on available public information as of 11:40 PM IST on May 10, 2025.
IPO Structure and Key Dates
The IPO is structured as a book-building issue, entirely a fresh issue with no offer for sale component, targeting to raise ₹93.29 crores. The price band is set at ₹135 to ₹142 per equity share, with a face value of ₹10 per share. The minimum lot size for application is 1000 shares, requiring a minimum investment of ₹1,42,000 for retail investors, while high-net-worth individuals (HNIs) need at least ₹2,84,000 for two lots. The allocation is divided as follows: 50% for Qualified Institutional Buyers (QIBs), 35% for retail investors, and 15% for Non-Institutional Investors (NIIs).
Key dates include:
- Open Date: May 9, 2025
- Close Date: May 14, 2025
- Allotment Date: May 15, 2025
- Refunds Date: May 16, 2025
- Credit to Demat Account: May 16, 2025
- Listing Date: May 19, 2025
The registrar for the IPO is Maashitla Securities Private Limited, and the lead manager is Smart Horizon Capital Advisors Private Limited. Contact details for the company include their address at 3, Central Excise Colony, Behind Mahatme Eye Bank, Chhatrapati Sq., Ring Road, Nagpur, with phone number +91 9226531342 and email [email protected], with their website at www.vgipl.com.
Company Overview
Virtual Galaxy Infotech is a well-established IT company with over 25 years of experience, focusing on providing innovative software products and specialized services. Its offerings include SaaS products, IT solutions, ERP implementation, banking software, custom software development, and services in domains such as Banking & Finance, E-Governance, Web Services, Cloud Computing, Big Data, Internet of Things (IoT), and System Integration. The company serves a wide range of clients, particularly in the BFSI, ERP, and E-Governance sectors, with a presence in over 5000 bank branches and a team of more than 300 professionals. The promoters are Avinash Narayanrao Shende and Sachin Purushottam Pande.
Financial Performance
The company’s financials indicate robust growth, particularly in recent years:
- Revenue: In FY2024, revenue was ₹63.58 crores, up from ₹59.76 crores in FY2023 and ₹43.44 crores in FY2022. For the period ending December 2024, revenue was ₹101.37 crores, showing continued growth.
- Profit After Tax (PAT): PAT surged to ₹16.54 crores in FY2024 from ₹0.72 crores in FY2023 and ₹0.40 crores in FY2022. For December 2024, PAT was ₹27.42 crores, reflecting strong profitability.
- Assets: Total assets increased from ₹67.80 crores in FY2022 to ₹116.93 crores in FY2024, and further to ₹146.03 crores by December 2024.
The following table summarizes the financials:
| Period | Revenue (₹ Cr) | Expense (₹ Cr) | Profit After Tax (₹ Cr) | Assets (₹ Cr) |
|---|---|---|---|---|
| FY2022 | 43.44 | 41.66 | 0.40 | 67.80 |
| FY2023 | 59.76 | 56.54 | 0.72 | 84.36 |
| FY2024 | 63.58 | 40.63 | 16.54 | 116.93 |
| Dec 2024 | 101.37 | 62.65 | 27.42 | 146.03 |
This growth trajectory suggests the company is scaling effectively, with significant improvements in profitability, particularly in FY2024.
Valuation Metrics
Based on FY2024 financials, the valuation metrics are as follows:
- ROE (Return on Equity): 53.52% – This high figure indicates the company generates substantial returns on shareholder equity.
- ROCE (Return on Capital Employed): 31.68% – Reflects efficient use of capital in generating earnings.
- EBITDA Margin: 49.38% – A strong margin, showing operational efficiency before interest, taxes, depreciation, and amortization.
- PAT Margin: 26.04% – Indicates good profitability after all expenses.
- Debt to Equity: 0.93 – Suggests a moderate level of debt relative to equity, indicating a balanced capital structure.
- EPS (Earnings Per Share): ₹10.02 – Based on FY2024 earnings, providing insight into per-share profitability.
- NAV (Net Asset Value): ₹25.09 – Represents the book value per share, useful for valuation comparisons.
- RoNW (Return on Net Worth): 39.95% – Another measure of profitability relative to net worth.
These metrics suggest Virtual Galaxy Infotech is financially healthy and efficient, with strong profitability and growth potential.
Peer Comparison
The company was compared with peers in the IT sector, including Veefin Solutions, Network People Services, and Trust Fintech. The comparison is based on key financial metrics:
| Company | EPS (₹) | PE Ratio | RoNW (%) | NAV (₹) | Income (₹ Cr) |
|---|---|---|---|---|---|
| Veefin Solutions | 2.74 | 198.07 | 6.95 | 52.70 | – |
| Network People Services | 13.78 | 201.57 | 62.04 | 29.67 | – |
| Trust Fintech | 7.13 | 25.53 | 52.70 | 25.71 | – |
Virtual Galaxy Infotech’s EPS of ₹10.02 and NAV of ₹25.09 are competitive, particularly when compared to Trust Fintech, and its RoNW of 39.95% is within a reasonable range compared to peers, suggesting it is fairly valued relative to industry standards.
Objects of the Issue
The proceeds from the IPO will be utilized for several strategic purposes, as outlined below:
- Capital Expenditure: For an additional development facility in Nagpur to enhance operational capacity.
- Repayment/Prepayment of Borrowings: To reduce debt and improve financial health.
- Investment in Infrastructure: Procure GPU servers and storage at the Data Centre to support technological advancements.
- Product Enhancement: Funding for enhancement, maintenance, and upgrading of existing products to maintain competitiveness.
- Business Development and Marketing: To expand market reach and client base through marketing activities.
- General Corporate Purposes: For other operational and strategic needs.
These objectives indicate a focus on growth, operational efficiency, and debt reduction, which are positive signals for investors.
IPO Review and Grey Market Premium
IPO Watch has recommended “May Apply” for this IPO, suggesting it is a viable investment opportunity, particularly for long-term investors. Other reviews from sources like Canara Bank and DRChoksey FinServ were mentioned, but specific ratings were not provided in the available data. As of May 10, 2025, the grey market premium (GMP) for the IPO has not yet started, according to InvestorGain, and investors are advised to check back for updates on GMP performance, which could influence listing expectations.
Investment Considerations
Given the analysis, several factors make Virtual Galaxy Infotech’s IPO attractive:
- Strengths: Strong financial performance with significant revenue and profit growth, healthy valuation metrics (high ROE, ROCE, and margins), and a clear strategy for using IPO proceeds to fuel growth.
- Market Position: Established presence in the IT sector, particularly in BFSI and E-Governance, with a broad client base and experienced team.
- Risks: As an SME IPO, it may experience higher volatility compared to mainboard IPOs. The company’s reliance on the BFSI sector could pose risks if the sector faces downturns. Market conditions and investor sentiment could also impact listing performance.
Investors should consider their risk appetite and investment horizon. For those seeking long-term growth in the IT sector, this IPO appears promising, especially given the “May Apply” recommendation from IPO Watch. However, due diligence is recommended, particularly regarding sector-specific risks and market volatility.
Contact and Additional Information
For further details, investors can contact the company at Virtual Galaxy Infotech Limited, 3, Central Excise Colony, Behind Mahatme Eye Bank, Chhatrapati Sq., Ring Road, Nagpur, phone +91 9226531342, email [email protected], or visit their website at www.vgipl.com. The Draft Red Herring Prospectus (DRHP) and Red Herring Prospectus (RHP) are available for download at Click Here and Click Here, respectively, for detailed financials and risk factors.
📢 Disclaimer
The information provided in this blog is intended solely for educational and informational purposes. It does not constitute financial advice, stock recommendations, or an offer to buy or sell any securities. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions. Please note that stock prices, financial data, and company information mentioned in this article are subject to change on trading days. For the most recent and accurate updates, kindly refer to the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) official websites.
FAQs
Common queries include:
- Is it an SME IPO? Yes, it is listed on NSE SME.
- What is the issue size? ₹93.29 crores.
- Price band? ₹135–₹142 per share.
- Minimum bid? 1000 shares, amounting to ₹1,42,000.
- How to apply? Through ASBA, UPI, or offline modes, depending on the platform.
