Virtual Galaxy Infotech, a SaaS product-focused company, is gearing up for its Initial Public Offering (IPO) in May 2025. This IPO, amounting to ₹93.29 Crores, will consist entirely of a fresh issue of 65.70 lakh shares. The subscription period for the IPO opens on May 9, 2025, and closes on May 14, 2025. The allotment of shares is expected to be finalized by May 15, 2025, and shares will tentatively be listed on the NSE SME by May 19, 2025.

IPO Details

The IPO will have a price band ranging from ₹135 to ₹142 per equity share. The market capitalization of the company, at the upper price band of ₹142, is expected to reach ₹353.13 Crores. The lot size for this IPO is 1,000 shares, and retail investors will need to invest a minimum of ₹1,42,000. High Net-Worth Individuals (HNIs) must invest in a minimum of 2 lots, totaling ₹2,84,000.

Smart Horizon Capital Advisors Private Limited is acting as the book running lead manager, while Maashitla Securities Private Limited is the registrar for the issue. Alacrity Securities Limited has been appointed as the market maker for this IPO.

Grey Market Premium (GMP) and Listing Gains

As of May 5, 2025, the Grey Market Premium (GMP) for the Virtual Galaxy Infotech IPO stands at ₹21, reflecting a 14.78% potential listing gain. It’s important to note that trading in the grey market does not constitute a real price discovery process, and it is not recommended for making investment decisions. The GMP is based on speculative demand and supply, often unregulated and purely informal.

IPO Allotment Status and Anchor Investors

The Virtual Galaxy Infotech IPO allotment date is set for May 15, 2025. Investors can check their allotment status online through the registrar's website by entering the application number, PAN, or DP Client ID. Virtual Galaxy Infotech has raised ₹26.12 Crores from anchor investors, allocating 18.4 lakh shares at the upper price band of ₹142 per share.

Company Financial Overview

Virtual Galaxy Infotech specializes in core banking software, ERP implementation, customized IT solutions, and services for the BFSI, ERP, and E-Governance sectors. The company has seen a strong financial performance, with revenues from operations for the fiscal year 2024 at ₹10,137.06 Lakh, marking consistent growth from ₹6,357.66 Lakh in 2023. EBITDA for the same period stood at ₹4,562.80 Lakh, reflecting a significant increase from ₹3,143.30 Lakh in 2023.

For the fiscal year 2024, the company recorded a Profit After Tax (PAT) of ₹2,741.51 Lakh, a considerable improvement compared to ₹1,653.95 Lakh in 2023. The pre-issue EPS for FY24 is ₹10.06, and the post-issue EPS is ₹6.65. The P/E ratio pre-issue is 14.17x, and post-issue it stands at 21.35x, compared to the industry’s P/E ratio of 142x.

Key metrics such as Return on Capital Employed (ROCE) of 31.68%, Return on Equity (ROE) of 53.52%, and Return on Net Worth (RoNW) of 39.95% indicate strong profitability and financial health.

IPO Objectives and Fund Utilization

The net proceeds from the IPO will be used for various purposes, including:

1. ₹34.27 Crores for capital expenditure to set up a new development facility in Nagpur, Maharashtra.

2. ₹3 Crores for the repayment or prepayment of certain borrowings.

3. ₹5.05 Crores for procuring GPU, servers, and storage systems at their data center.

4. ₹18.90 Crores for funding the enhancement and maintenance of existing products through new hires.

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

6. The remaining proceeds will be used for general corporate purposes.

Virtual Galaxy Infotech IPO Review

Virtual Galaxy Infotech’s IPO seems to be attractively priced based on its financial performance and growth trajectory. The company’s focus on BFSI, ERP, and E-Governance sectors positions it well in the technology space. With the strong management team, experienced in driving growth in the IT industry, the company is expected to continue its upward trajectory.

Given the financial metrics and the current GMP of ₹21, suggesting a potential listing gain of 14.78%, the IPO appears to be a fairly priced investment. Risk-averse investors looking for listing gains might consider applying for this IPO. However, as always, investors should carefully evaluate the risks involved before investing in the stock market.

Disclaimer: The Grey Market Premium (GMP) and other information provided in this article are for educational and informational purposes only.

The Upcoming IPOs in this week and coming weeks are Virtual Galaxy Infotech,Wagons Learning.

The Current active IPO are Srigee DLM, Manoj Jewellers, Kenrik Industries.

The Closed IPOs are  Arunaya Organic.

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