Virtual Galaxy Infotech IPO

About Virtual Galaxy Infotech Limited IPO

Virtual Galaxy Infotech Limited IPO is an IPO of up to 66,60,000 equity shares, amounting to ₹93.29 crores. It consists of a fresh issue of up to 65.70 lakh equity shares. The shares will be allotted on Thursday, May 15, 2025. The credit of shares to the demat account will take place on May 16, 2025, and the initiation of refunds will take place on May 16, 2025.

Objective of Virtual Galaxy Infotech Limited IPO

• Capital expenditure towards setting up an additional development facility in Nagpur, Maharashtra.
• Repayment/prepayment of certain borrowings availed by the company.
• Investment in procuring GPU, server & storage system at the Data Centre.
• Funding of expenditure related to the enhancement, maintenance, and upgrading of existing products.
• Funding for business development and marketing activities.
• General corporate purpose.

Industry Outlook

The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the country’s GDP and public welfare. The IT industry accounted for 7.5% of India’s GDP in FY23, and it is expected to contribute 10% to India’s GDP by 2025. India is viewed by the rest of the world as having one of the largest internet user base and the cheapest Internet rates, with 76 crore citizens now having access to the Internet. According to the National Association of Software and Service Companies (NASSCOM), the Indian IT industry’s revenue touched US$ 22,700 crores in FY22, a 15.5% YoY growth, and was estimated to have touched US$ 24,500 crores in FY23. IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totalling US$ 13,860 crores, up from US$ 12,470 crores last year. The Indian software product industry is expected to reach US$ 10,000 crores by 2025. India's IT industry is likely to hit the US$ 35,000 crores mark by 2026 and contribute 10% towards the country's gross domestic product (GDP), Infomerics ratings said in a report.

Company Information

Virtual Galaxy Infotech Limited is a SaaS product-focused company engaged in providing core banking software solutions, IT solutions, ERP implementation, and customised software solutions development, along with IT services for the BFSI, ERP, and E-Governance domains. They are primarily involved in the development, customisation, installation, and implementation of software applications, along with comprehensive post implementation support, monitoring, and maintenance services for the delivered solutions. To provide a seamless experience to their clients, they offer a range of essential allied services, ensuring that all software needs are met under one roof. Their wide range of offerings covers services including consultation, architecture, solution design, implementation, monitoring, and managed services.

Risks of Virtual Galaxy Infotech Limited IPO

• They derive a significant portion of their revenue from customers located in Maharashtra. Any adverse developments in the region could adversely affect their business, results of operations, cash flows, and financial condition.

• The nature of their software product exposes them to a range of risks, including conflicting legal and regulatory requirements, non-compliance with which may negatively impact their business and operational outcomes.

They have their operations in countries outside India also, such as Tanzania and Malawi. As a result, their business is subject to risks and challenges associated with international operations, including risks related to complying with several local laws, restrictions on the import and export of certain intermediates and technologies, multiple tax and cost structures, and cultural and language factors.

Anchor Investor Information

The Anchor Investor Bid/ Issue Period shall be one Working Day prior to the Bid/Issue Opening Date.

IPO Registrar and Book Running Lead Managers

Book running lead managers:

Smart Horizon Capital Advisors Private Limited Registrar for the IPO is Maashitla Securities Private Limited

Business Model

The company earns its revenue through the following sources:

a) Sale of products: Sale of software and related services with a one-time upfront license fees concerning the platform deployed on-premise.
• Annuity-based revenue: recurring fees/charges from the following:
• ATS/AMC: charges for annual technical support and maintenance (including updates) of licences and installation
• Support: charges for support and development services.
b) SaaS: subscription fees for licences concerning the platform deployed on cloud.
c) Sale of hardware and hardware-related services: milestone-based charges for implementation and development.

Company Growth Trajectory

Revenue from operations has shown a growth of 5.10% from ₹58.48 crores in fiscal 2023 to ₹61.46 crores in fiscal 2024. After accounting for taxes at applicable rates, the company reported a net profit of ₹16.30 crores in fiscal 2024 as compared to a net profit of ₹1.80 crores in fiscal 2023, which increased due to higher revenue from operations at increased margins and a reduction in operating expenses due to increased operational efficiency during the year.

Company Market Position

With over 26 years of experience and a dedicated team of around 329 employees, they provide advanced software services to commercial banks, state cooperative banks, urban cooperative banks, district central cooperative banks, cooperative societies, NBFCs, and Savings and Credit Cooperative Societies (SACCOS). Currently, they serve clients across more than 15 states in India, and have expanded their reach to international markets, such as in Tanzania and Malawi.

How To Check Allotment Status of Virtual Galaxy Infotech Limited IPO?

You can check the allotment status of shares either on the website of the National Stock Exchange (NSE) or on the website of the registrar Maashitla Securities Private Limited. To check the status on the NSE website:

• Visit the NSE website
• Click on “Investor Services” and choose “Application Status Check”
• Choose the issue type — Equity or Debt (Equity in this case)
• Select the Issue Name from the drop-down. The issue name is the company’s name, which is Virtual Galaxy Infotech Limited
• Enter your application number or PAN number
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

• Visit the Maashitla Securities Private Limited website
• Choose “Public Issues” from the “Investor Services” drop-down
• Select Virtual Galaxy Infotech Limited from the drop-down
• Enter your PAN number or Application number
• Click on “Submit” to know the allotment status