Virtual Galaxy Infotech Limited, a company specializing in SaaS products, offers core banking software, IT solutions, ERP implementation, and customized software development, particularly in the BFSI, ERP, and E-Governance domains. The company is also involved in providing comprehensive IT services, from development and customization to installation and post-implementation support.

The company’s initial public offering (IPO) is a Book-Built Issue amounting to ₹93.29 Crores, consisting entirely of a Fresh Issue of 65.70 Lakh shares. The subscription period for the Virtual Galaxy Infotech IPO opened on May 9, 2025, and will close on May 14, 2025. The IPO allotment is expected to be finalized on or around May 15, 2025, and the shares will be listed on the NSE SME on or about May 19, 2025.

IPO Pricing & Subscription Details:

• Price Band: ₹135 to ₹142 per equity share

• Market Capitalization at IPO price of ₹142 per share: ₹353.13 Crores

• Lot Size: 1,000 shares (minimum investment of ₹1,42,000 for retail investors)

• HNI Minimum Investment: 2 lots (₹2,84,000)

• Subscription Status: As of 12:25 PM on May 14, 2025, the IPO was subscribed 70.19 times on its final day.

Anchor Investors and IPO Allocation:

Virtual Galaxy Infotech has raised ₹26.12 Crores from Anchor Investors at a price of ₹142 per share. A total of 18,40,000 equity shares were allocated to the Anchor Investors. These shares were allotted from the Qualified Institutional Buyers (QIBs) portion, providing a significant boost to the IPO's credibility and market interest.

Grey Market Premium (GMP) Update:

The Grey Market Premium for the Virtual Galaxy Infotech IPO is currently ₹21, reflecting an expected listing gain of 14.78%. However, it's important to note that trading in the grey market is unregulated, and the prices in this market do not necessarily reflect the official listing price. The GMP is merely an indication of market sentiment and should be considered for informational purposes only.

Objectives of the IPO:

The funds raised through the IPO will be used for several key objectives:

1. ₹34.27 Crores for capital expenditure towards setting up an additional development facility in Nagpur, Maharashtra.

2. ₹3 Crores for the repayment of borrowings.

3. ₹5.05 Crores for procuring GPU, servers, and storage systems for the company's data center.

4. ₹18.90 Crores for business expansion, including manpower hiring and upgrading existing products.

5. ₹14.06 Crores for business development and marketing efforts.

6. The remainder will be used for general corporate purposes.

Financial Overview:

• Revenues for the fiscal years ending December 31, 2024, 2023, and 2022: ₹10,137.06 Lakh, ₹6,357.66 Lakh, and ₹4,343.74 Lakh, respectively.

• EBITDA for the same periods: ₹4,562.80 Lakh, ₹3,143.30 Lakh, and ₹927.39 Lakh.

• Profit After Tax (PAT) for FY24: ₹2,741.51 Lakh, showing a significant increase from ₹71.77 Lakh in FY22.

The company's key performance indicators suggest solid profitability with a pre-issue EPS of ₹10.06 and a post-issue EPS of ₹6.65 for FY24. The P/E ratio stands at 14.17x pre-issue and 21.35x post-issue, which is well below the industry average of 142x, indicating that the IPO is fairly priced.

Virtual Galaxy Infotech IPO Review:

Virtual Galaxy Infotech is well-positioned for growth, with strong financial performance and a solid business model focusing on core banking and ERP solutions. The company’s experienced management team, with over 26 years in the industry, has been instrumental in its steady growth. The IPO is an opportunity for investors seeking exposure to the IT services sector, particularly those focusing on the BFSI and ERP domains.

Given the strong demand seen during the subscription phase and the positive sentiment reflected by the Grey Market Premium (GMP), the Virtual Galaxy Infotech IPO offers an attractive proposition for risk-tolerant investors seeking listing gains. Based on the company's financial metrics and IPO pricing, we recommend investors to apply for the IPO for potential listing gains. However, the IPO is considered risky, so potential investors should evaluate the company’s long-term growth prospects carefully before investing.

The Upcoming IPOs in this week and coming weeks are Integrity Borana Weaves, Belrise Industries, Accretion Pharmaceuticals, Wagons Learning.

The Current active IPO are Accretion Pharmaceuticals, Integrity Infrabuild Developers and Virtual Galaxy Infotech.

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