Virtual Galaxy Infotech is a SaaS-focused company providing core banking solutions, IT services, ERP implementations, and customized software development for industries in the BFSI, ERP, and E-Governance sectors. The company has a well-established track record of developing, customizing, and maintaining software applications, with comprehensive post-implementation services.

IPO Overview:

Virtual Galaxy Infotech's Initial Public Offering (IPO) aims to raise ₹93.29 crores entirely through a fresh issue of 65.70 lakh shares. The IPO is part of a book-built issue with a price band of ₹135 to ₹142 per equity share. The subscription period for this IPO begins on May 9, 2025, and concludes on May 14, 2025. The allotment is expected to be finalized on May 15, 2025, and the shares are set to be listed on the NSE SME with a tentative listing date of May 19, 2025.

At the upper end of the price band (₹142), the company's market capitalization will stand at ₹353.13 crores. The IPO has a lot size of 1,000 shares, meaning retail investors must invest at least ₹1.42 lakh, while High-Net-Worth Individuals (HNIs) will need to invest ₹2.84 lakh for two lots (2,000 shares). Smart Horizon Capital Advisors Private Limited serves as the book-running lead manager, Maashitla Securities Private Limited is the registrar, and Alacrity Securities Limited is the market maker for this IPO.

Key Financial Metrics:

Virtual Galaxy Infotech has demonstrated solid growth in recent years. For the period ending December 31, 2024, the company reported revenues of ₹10,137.06 lakh, marking a substantial increase from ₹6,357.66 lakh in FY 2023. The company’s EBITDA for the same period stood at ₹4,562.80 lakh, showing a robust growth trajectory. Profit After Tax (PAT) also surged to ₹2,741.51 lakh for FY 2024, indicating strong profitability.

Grey Market Premium (GMP):

As of May 5, 2025, the Grey Market Premium (GMP) for Virtual Galaxy Infotech’s shares is ₹21, translating to a potential listing gain of approximately 14.78%. This suggests that the market anticipates a healthy listing price, offering substantial returns for those who invest in the IPO.

Anchor Investors:

Virtual Galaxy Infotech has successfully raised ₹26.12 crores from anchor investors at the upper price band of ₹142 per share. A total of 18.40 lakh equity shares were allocated to these investors, which reflects the strong institutional interest in the IPO. The IPO's anchor investors were allocated shares from the Qualified Institutional Buyers (QIB) portion of the offering.

IPO Objectives:

The funds raised through this IPO will be utilized for various strategic purposes, as outlined below:

1. Capital Expenditure: ₹34.27 crore will be invested in setting up an additional development facility in Nagpur, Maharashtra.

2. Repayment of Borrowings: ₹3 crore will be allocated to the repayment or prepayment of certain borrowings.

3. Infrastructure Investment: ₹5.05 crore will be spent on procuring GPU, server, and storage systems at their data center.

4. Product Enhancement: ₹18.90 crore will go towards enhancing and upgrading existing products through manpower hiring and other related activities.

5. Business Development: ₹14.06 crore will be used for business development and marketing activities.

6. General Corporate Purposes: Remaining funds will be used for general corporate purposes.

Company’s Performance and Valuation:

The company has shown strong financial performance with a Pre-Issue EPS of ₹10.06 and Post-Issue EPS of ₹6.65 for FY 2024. The pre-issue P/E ratio stands at 14.17x, while the post-issue P/E ratio is 21.35x, compared to the industry’s P/E ratio of 142x, suggesting that the IPO is priced attractively.

Other important metrics include a Return on Capital Employed (ROCE) of 31.68%, Return on Equity (ROE) of 53.52%, and a Return on Net Worth (RoNW) of 39.95%, which reflect strong profitability and efficient use of capital.

IPO Recommendation:

Based on Virtual Galaxy Infotech's strong financial growth, sound management team, and favorable valuation, we recommend the IPO for Risky Investors looking for listing gains. The company’s solid revenue growth, high profitability margins, and low P/E ratio compared to the industry position this IPO as an appealing investment opportunity.

IPO Subscription and Allotment:

As of May 9, 2025, the IPO has been subscribed 0.04 times on its first day. Subscription details will be updated regularly. Investors interested in checking their allotment status can do so online by visiting the registrar’s website and submitting their application number, PAN, or DP Client ID.

For more updates, investors can monitor the Virtual Galaxy Infotech IPO live subscription status and anticipate a potential strong market debut based on the current Grey Market Premium (GMP) and the performance of anchor investors.

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

The Current active IPO are Virtual Galaxy Infotech.

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