Protean eGov shares crash 20% today: Here's why
What's the story
Shares of Protean eGov Technologies Ltd. crashed to a 20% lower circuit on Monday.
This comes after the company announced that it has not been considered for the next round of the Request for Proposal (RFP) selection process for the PAN 2.0 project by the Income Tax (I-T) Department.
The company disclosed the development in an exchange filing over the weekend, resulting in a major decline in its share value, which hit the lower price band of ₹1,143 on BSE.
Project details
Protean's role in PAN 2.0 project
The Income Tax Department had issued a notice inviting bids for selecting a Managed Service Provider (MSP) to design, develop, implement, operate, and maintain its PAN 2.0 project.
Protean eGov Technologies, formerly NSDL e-Governance Infrastructure, participated in this RFP bid.
The company clarified that the project involves a technology revamp of the PAN systems at the Income Tax Department, and it currently seems to have minimal impact on their ongoing PAN processing issuance services under existing agreements with the department.
Shareholding
Stakeholder distribution in Protean eGov
Notably, Protean eGov Technologies doesn't have any promoter shareholding.
However, several lenders hold stakes in the company, including Canara Bank (1.23%), Bank of Baroda (1.54%), Punjab National Bank (2.25%), Axis Bank (3.18%), and State Bank of India (4.93%).
Veteran investor Ramesh Damani holds a 1.05% stake while Ajay Aggarwal has a 1.12% stake.
Share distribution
Retail shareholders dominate Protean's public shareholding
The bulk of public shareholding in Protean eGov Technologies is with small retail shareholders, or those having authorized share capital up to ₹2 lakh.
By the end of the March quarter, as many as 1.98 lakh retail shareholders held a 39% stake in the company.
This shows a wide base of individual investors who have invested in Protean eGov Technologies shares.
Analyst ratings
Analysts remain optimistic about Protean despite share drop
Despite the recent drop in shares, analysts remain optimistic about Protean eGov Technologies.
Out of six analysts covering the company, five have a "buy" rating while one has given a "hold" recommendation.
This indicates that despite the setback with the PAN 2.0 project, there is still potential for growth in this company's future performance.