Equirus Securities - Protean EGov - Initiating Coverage Note

Protean eGov Technologies Ltd
Initiating Coverage
Enabling Digital India; Initiate with LONG
Tax
Services
NPS
Identity
Solutions
Data
Stack
ONDC
Cloud
Inter- Services
national
Expansion
December 26, 2023
Rohan Mandora ([email protected], +91-79 6901 5014)

Shreyash Kumath ([email protected], +91-79 6901 5012)
India Equity Research | BFSI
December 26, 2023
Initiating Coverage
Protean eGov Technologies Ltd

CMP Target Price
Rs 1,208 Rs 1,500
Enabling Digital India; Initiate with LONG Mar 2025
Rating Upside
LONG 24% (↑)
Estimate Revision
➢ Protean eGov Technologies (PROTEAN) is amongst the select set of Indian private entities
Forecasts % Change
providing technology solutions for e-governance projects and Digital India initiatives. It
(Rs mn) FY24E FY25E FY24E FY25E
leads the market in tax infrastructure (TIN/PAN issuance), retirement (NPS-CRA), and
identity authentication & management services. Incrementally, PROTEAN aims to build Revenue 9,636 12,093 - -
core capabilities around India stack, open digital ecosystem, and cloud services. EBITDA 1,990 2,912 - -
➢ PROTEAN offers diversified, granular, and annuity-based services, earning less than a PAT 1,332 1,764 - -
sixth of its revenues from the government; also, ~80% of revenues are transaction-based. EPS 32.9 43.6 - -
➢ We expect new businesses of Open Network for Digital Commerce (ONDC), cloud, Stock Information
and international expansion to drive growth ahead. Over FY23-FY26E, we model for
Market Cap (Rs Mn) 48,900
a ~26% revenue CAGR, a ~38% core EBITDA CAGR, and a ~28% PAT CAGR. Core
52 Wk H/L (Rs) 1,618/775
EBITDA margins should touch 20.9% by FY26E vs. 15.9% in FY23.
Avg Daily Volume (1yr) 870,263
➢ Initiate coverage with LONG and a Mar’25 TP of Rs 1500 based on FCFE discounting.
Avg Daily Value (Rs Mn) 955
This translates into a P/E ratio of 26.8x based on FY26 EPS.
Equity Cap (Rs Mn) 8,571
A play on Digital India initiatives: PROTEAN has an indomitable presence in its traditional Face Value (Rs) 10
businesses: PAN card issuance (~2/3rd market share), e-TDS/TIN filings (~60%) and Share Outstanding (Mn) 40.4
NPS-CRA (~97%). Further, it has been diversifying into new segments (ecommerce, Bloomberg Code PROTEAN IN
mobility, healthcare, agriculture, education) on open digital ecosystems. This apart, it is a
Ind Benchmark -
founding shareholder and has been a key contributor to the Open Network for Digital
Commerce (ONDC). PROTEAN also looks to go global and has bid for e-governance Ownership (%) Recent 3M 12M
projects internationally. With solutions around identity verification/ e-Sign/ authentication
Promoters 0.0 0.0 0.0
in place and the account aggregator license already secured, it is now focusing on data
analytics solutions. Driven by its competence in managing large databases and servers with DII 78.9 (10.0) (10.0)
strong security measures, PROTEAN has launched ‘Made in India’ public cloud services. FII 9.4 (1.7) (1.7)
We thus see PROTEAN as a play on the rapid digital transformation India is undergoing. Public 11.7 11.7 11.7
Diversified, granular and annuity-based service offerings: PROTEAN earns ~80% of its
revenues on per-transaction basis across services offered to consumers, businesses, and
the government. The company has been generating free cashflows while being profitable
and dividend-paying for almost two decades. It now has ~Rs 6.5bn of B/S cash.
Valuation & view: We build in a ~26% revenue CAGR over FY23-FY26E with new
Relative price chart
businesses contributing ~45% of incremental growth, and identity services and NPS-CRA PROTEAN IN EQUITY Nifty Index
driving existing businesses. Core EBITDA margins should touch ~20.9% by FY26E 1,500
(FY23:15.9%) as the revenue share of PAN services (lowest EBITDA-margin business) 1,350
declines. In terms of net profit, we anticipate a ~28% CAGR over FY23-FY26E. We view 1,200
PROTEAN is a good bet on the India digitization story given its (a) strong management, (b) 1,050
good corporate governance standards, (c) solid FCF record, (d) the probability of being a 900
unique play on developments around India stack, and (e) limited revenue share from the 750
Nov-23
government. Initiate coverage with LONG with a Mar’25 TP of Rs 1500 at 26.8x FY26EPS
of Rs 56. Source: Bloomberg
Financial Summary
Analsyts
Y/E Mar Core EV/ Rohan Mandora
Sales PAT EPS BPS P/E (x) P/B (x) ROE (%)
(Rs mn) EBITDA EBITDA (x)
[email protected]
FY23A 7,422 1,180 1,070 26 212 46 5.7 36 13.0% +91-79 6901 5014
Shreyash Kumath
FY24E 9,636 1,449 1,332 33 233 37 5.2 28 14.8%
[email protected]
FY25E 12,093 2,303 1,764 44 263 28 4.6 17 17.6%
+91-79 6901 5012
FY26E 14,683 3,076 2,265 56 302 22 4.0 13 19.8%
Source: Company, Equirus Securities
Refer to important disclosures at the end of this report December 26, 2023 | 2
Protean eGov Technologies Ltd (PROTEAN IN) India Equity Research | Initiating Coverage
Table of Contents
Company Overview ............................................................................................... 4
Prominent player delivering population scale e-governance projects ........................... 4
Key business lines................................................................................................... 4
Investment Thesis ..................................................................................................13
A play on Digital India initiatives............................................................................ 13
Diversified, granular, and annuity-based service offerings ........................................ 13
Limited revenue dependence on government .......................................................... 14
Extensive physical infrastructure ............................................................................. 15
Healthy B/S cash of Rs 6.5bn ................................................................................ 16
Experienced senior management, strong corporate governance ............................... 16
PROTEAN – Recent Developments/News .................................................................18
Core EBITDA margins to improve .......................................................................... 20
Healthy operating cashflows.................................................................................. 20
RoEs suppressed due to excess cash on balance sheet ............................................. 21
Valuation & View ..................................................................................................22
Initiate coverage with LONG ................................................................................. 22
Key risks .............................................................................................................. 23
Comparable Valuation ..........................................................................................24
December 26, 2023 | 3

Company Overview
Prominent player delivering population scale e-governance projects
PROTEAN is amongst the select set of Indian private entities working on e-governance projects and
PROTEAN’s offerings have helped
the Digital India initiative. It is the market leader in its service offerings like tax infrastructure (TIN/PAN
address national-level issues,
issuance, tax collections & payments), retirement (NPS-CRA), and identity authentication &
redefined delivery of public services,
management services. Incrementally, PROTEAN intends to build core capabilities around India stack
and lowered service delivery costs
and data-led businesses.
The company is a founding member of ONDC and intends to position itself as an enabler to create
sustainable public digital infrastructure in healthcare, agriculture, education & skilling, cloud services,
and cyber security. PROTEAN is also looking to take its capabilities globally and has bid for tax, social
security, authentication, and identity solutions linked projects in other countries.
Exhibit 1: Timelines of various projects
Source: Company Data, Equirus Securities
Key business lines

PAN card issuance and online PAN verification
PROTEAN processes applications for issuance of Permanent Account Number (PAN) and has also
established and managed a portal for verification of PAN on behalf of the Income Tax Department
(ITD). The company has a phygital network of over 68k PAN/TAN/TDS facilitation centers supporting
both online and offline applications.
Phygital network with over 68k PAN/ • During FY22/FY23/1HFY24, PROTEAN processed around 35.5/38.6/28.3mn PAN
TAN/TDS facilitation centers for online applications; the cumulative number has exceeded Rs 460mn.
and offline applications
• Users have three options for online PAN verification services: (a) screen-based PAN
verification, (b) file-based PAN verification, and (c) software-based PAN verification.
• During FY22/FY23, 2.12bn/2.41bn PANs were verified by users of the service. Cumulatively
around 7.9bn PANs have been verified so far.
December 26, 2023 | 4

Exhibit 2: Cumulative allotment of PAN cards in India
Cumulative No. of Pan Cards

800
676.7
700
612
600 553
503
500 446
(in mn)
PROTEAN has a ~2/3rd market share 400
379
in total PAN allotments since FY11 294

300 248
205 223
177
200
100
0
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Source: Company Data, Crisil Research, Equirus Securities
Exhibit 3: Cumulatively, ~460mn PANs have been issued by PROTEAN till 1HFY24
Offline (mn) Online (mn)
50
CAGR 17%
40
11 16
30
7
20
23 26 25
10
0
FY21 FY22 FY23
Exhibit 4: PAN cards verified annually by PROTEAN
Cumulatively, PROTEAN has processed No. of PAN Cards Verified Annually (mn)
Rs 460mn PAN applications and 3,000
verified 7.9bn PANs so far
2,412
2,500
2,122
1,986
2,000
(in mn)
1,500
874 937
1,000
355 410
500
123 191 188 180
0
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1HFY24
December 26, 2023 | 5

Tax Information Network (TIN)

PROTEAN has successfully established and managed an extensive Tax Information Network (TIN) on
behalf of ITD.
• The TIN portal automates assimilation of information on direct tax collected at source under
various heads.
• PROTEAN is engaged in processing applications for the issuance of Tax Deduction and
Collection Account Number (TAN).
• Over the years, the company has collaborated with various tax collecting banks to enable
As of 9MFY23, PROTEAN had a 60% convenient uploading of tax collection data across their branch networks.
share in e-filing of income tax
• TIN provides a facility to furnish Statement of Financial Transactions (SFT) containing
information regarding high value transactions undertaken by various taxpayers.
• PROTEAN has established connectivity with 20 tax collecting banks to upload tax collection
data from more than 19,800 branches.
Exhibit 5: PROTEAN’s eTDS/TCS market share
Protean Efiling portal of income tax

100%
22%
29% 31%
80% 38% 40%
60%
40% 78%
71% 69%
62% 60%
20%
0%
FY19 FY20 FY21 FY22 9mFY23
Source: Company, CRISIL, Equirus Securities
CRA for National Pension Scheme (NPS) and Atal Pension Yojana (APY)
PROTEAN serves as the Central Recordkeeping Agency (CRA) for National Pension Scheme (NPS) -
Government and private sectors, as well as for Atal Pension Yojana (APY). The company has also
conceptualized and implemented an online platform for account opening, registration, contribution to
NPS, and account maintenance to simplify the procedure and make the benefits more accessible.
• The company now has a perpetual NPS CRA license.

PROTEAN had a ~97% market share
• As of Jun’23, PROTEAN-CRA had a market share of more than 97% in terms of NPS
in NPS subscribers as of Jun’23
subscribers.
Exhibit 6: No. of NPS subscribers (as of Jun’23)

No. of Subscribers (mn) PROTEAN – CRA Kfintech - CRA Total
Central Govt 2.4 - 2.4
State Govt 6.0 0.2 6.2
Corporate Sector 1.6 0.1 1.8
All Other Citizens 2.4 0.7 3.0
NPS Lite/Swavalamban 4.2 - 4.2
APY 47.7 - 47.7
Total 64.3 1.0 65.3
Source: Company data, PFRDA, Equirus Securities
December 26, 2023 | 6

Exhibit 7: No. of PMJDY and APY accounts
No. of PMJDY accounts No. of APY Accounts APY Accounts/ PMJDY Accounts - RHS
9.4%
APY penetration in Jan Dhan accounts 700 10%
just 9.4%, indicating huge growth 600
8.1% 9%
potential 8%
6.6%
500 7%
5.5% 487
400 451 6%
(mn)
422
383 5%
300 4%
314 4.2%
353 3%
200
3.1%
2%
100 36.3 45.9
9.6 15.0 21.1 28.0 1%
0 0%
FY18 FY19 FY20 FY21 FY22 FY23
Source: PFRDA, GOI, Equirus Securities
Exhibit 8: Fee structure for NPS-CRAs

Services Private/Government NPS Lite/Atal Pension Yojana
• PROTEAN: Rs 40.0
Permanent Retirement Account (PRA) • PROTEAN: Rs 15
• KFintech: Rs 39 + GST
opening charges • KFintech: Rs 15
• CAMS: Rs 40.0 + GST
Annual PRA Maintenance cost per • PROTEAN: Rs 25
• KFintech: Rs 58 + GST
account • KFintech: Rs 14.4
• CAMS: Rs 65 + GST
Charge per transaction • KFintech: Rs 3.36 + GST Nil
• CAMS: Rs 3.5 + GST
Note: Only PROTEAN is licensed to operate APY Scheme, Source: Company Data, Equirus Securities
Identification services
PROTEAN provides fundamental identity solutions like e-KYC, e-authentication, e-Sign, online PAN
Has ~2,500+ regulated entities as verification, and online Aadhaar verification to various regulated entities. The company has ~2,500+
clients for digital entity services regulated entities as its clients for digital entity services.
• Aadhar authentication: This allows residents to provide their identity seamlessly, in turn
enabling service providers to extend benefits as provided by the government. Facilitated by
a centrally stored database, Aadhaar authentication services enable real-time Aadhaar
verification without manual intervention.
Exhibit 9: Monthly authentication trends at a systemic level
Value (mn) Cumulative Value (bn,RHS)
2500 110
2000 100
1500 90
1000 80
500 70
2,099
1,738
2,042
1,176
1,527
1,719
1,582
1,878
2,033
1,713
1,292
669
0 60
Jun-23
Nov-23
Dec-23
Jul-23
Oct-23
Feb-23
Sep-23
Apr-23
Aug-23
Mar-23
Jan-23
May-23
Source: Aadhar dashboard, Equirus Securities
December 26, 2023 | 7

Exhibit 10: Cumulative e-auth numbers stood at 2234.2mn
E-Auth (mn)
400 CAGR 24%
300 275 277
200 179
100
0
FY21 FY22 FY23
Source: Company Data, Equirus
Exhibit 11: Cumulative online PAN verifications were at 7944.6mn
OPV (mn)
3,000
CAGR 60%
2,413
2,123
2,000
937
1,000
0
FY21 FY22 FY23
Source: Company Data, Equirus
• e-KYC services: PROTEAN is an authorized Aadhaar-based e-KYC service provider to

different entities, enabling the Know Your Client (KYC) services to be conducted electronically
via the use of Aadhaar database.
Exhibit 12: Monthly e-KYC trends at a systemic level
Value (mn) Cumulative Value (bn, RHS)

400 18
300 16
200 14
100 12
246
346
297
269
313
254
317
302
319
342
324
181
0 10
Jun-23
Nov-23
Dec-23
Jul-23
Apr-23
Sep-23
Oct-23
Feb-23
Aug-23
Jan-23
Mar-23
May-23
Source: Aadhar dashboard, Equirus Securities
December 26, 2023 | 8

Exhibit 13: For PROTEAN, cumulative e-KYC transactions stood at 1041.2mn
E-KYC (mn)
300
246
CAGR 64%
200 174
91
100
0
FY21 FY22 FY23
• e-Sign services: e-Signature technology enables a user to sign documents electronically, thus
eliminating the need for signing by hand. PROTEAN’s e-Sign platform automates and
simplifies this process by providing a secure way to sign legally-binding documents through
trustworthy channels – anytime, anywhere, and from any device.
Exhibit 14: For PROTEAN, cumulative e-Sign transactions stood at 347.6mn
E-sign (mn)
CAGR 56%
100
86
82
80
60
36
40
20
0
FY21 FY22 FY23
• Account Aggregator (AA): In Jan’23, PROTEAN obtained the certificate of registration for the
account aggregator business for its subsidiary, NSDL e-Governance Account Aggregator.
The company intends to use technologies like artificial intelligence, machine learning, and
advanced analytics to build intelligent AA solutions that deliver inclusion and can potentially
evolve to provide services such as lending, wealth management and personal financial
management that have, thus far, been availed of largely by the affluent strata.
December 26, 2023 | 9

Cloud services
The India public cloud services (PCS) market, including infrastructure-as-a-service (IaaS), platform-as-
a-service (PaaS), and software-as-a-service (SaaS), revenue totaled Rs 0.3trn for FY22, as per
NASSOM’s Cloud Adoption Report. The Indian public cloud services market is expected to reach Rs
1.1trn by 2027, growing at a 30% CAGR over 2021-27.
Given PROTEAN’s rich experience in managing infrastructure and data to enterprises, the company
PROTEAN has secured the MeitY now provides advanced cloud infrastructure coupled with enterprise-grade security framework and
certification for its cloud services governance. It has collaborated with Vigyanlabs Innovations, a technology innovator in AI driven
computing and holder of global patents, to roll out cloud services in India.
Services offered by PROTEAN under Cloud:
• Infrastructure as Services (IaaS): Foundational Services (Compute, Storage, Network) & IT

Management
• Desktop as a Services (DaaS): Virtual Office Setup & Cloud PC With Thin-client
• Platform as a Service (PaaS): Development Environment & Database as a Service
Key Propositions of PROTEAN Cloud
• Indigenously built using Open-Source Software & Open Standards to meet the needs of
Target segments for PROTEAN Cloud
Indian industry.
are MSME, Government, BFSI, IT
companies, Manufacturing & SaaS, • Green Cloud and Patented Technology: An energy efficient cloud designed to lower carbon
HealthCare, ecommerce; who lack footprint. Comprehensive Monitoring tools with AI enabled power management that makes
digitization as well as qualified the offering as a ‘Green Cloud’.
manpower to support their IT
• Practitioners Approach: Decades of IT management experience of building & managing
infrastructure. Go-to-market strategy
population scale e-governance projects for India, ranging from tax information systems to
involves building a wide channel
NPS.
partner/ distributor network to cover
Tier 2, 3 and 4 cities. • Focus on Lower TCO and predictable pricing with certainty in billing.
Exhibit 15: Cloud service market to clock a 30% CAGR over 2021-27
Indian Public Cloud Market (Rs bn)

1200
1065
1000
819
800
630
600 485
375
400 288
221
170
200
0
FY20 FY21 FY22 FY23E FY24E FY25E FY26E FY27E
Source: CRISIL, NASSOM Cloud Adoption Report, Equirus Securities
December 26, 2023 | 10

ODE – Open Digital Ecosystem

PROTEAN, a founder member of ONDC, is one of the key and early contributors to the open-source
community and protocols across a variety of sectors such as e-commerce, mobility, healthcare,
agriculture, and education.
• ONDC – Open Network for Digital Commerce
As a founding member of ONDC, ONDC has been conceptualized and implemented by

PROTEAN. Besides being a core Technology Service Provider (TSP) to ONDC, PROTEAN
is currently a service provider to every network participant (50+) for Gateway Services and
is also offering bundled add-ons like Adaptors, Buyer App Tech, Seller App Tech, Recon &
Settlement Service Tech, Issue and Grievance Tech, Catalogue as a Service Tech etc.
Factors to support growth of ONDC: (a) Rapid digital adoption is expected to continue, by 2030,
India’s digital consumption is poised to grow from US$ 60bn-70bn to US$ 340bn, (b) ONDC could
accelerate this growth across multiple parameters as Digital commerce users increase from 165mn
(FY22) to 500mn (FY30), ecosystem witnesses a 7x growth in MSMEs on digital platforms (from 6Mn
to 40Mn) and more than 60% new shoppers will be from Tier III-IV towns.
Exhibit 16: Existing ONDC landscape

PROTEAN’s
ONDC Landscape Comments Revenue Model
Presence
There will be a single registry
ONDC Registry ✓ maintained by ONDC which has been Paid by ONDC currently
implemented by PROTEAN
First Gateway has been implemented
Paid by ONDC currently. In
by PROTEAN. As per ONDC norms,
future, if the ecosystem is
Gateway Network ✓ entity implementing the gateway
ready, revenue could be on
cannot have their own Buyer/ Seller
a per transaction basis
App
These are APIs developed based on
Buyer/Seller Beckn Protocol which enables
✓ Paid by ONDC currently
Adaptors Buyer/Seller Apps to connect to the
ONDC network
It could be development
If some buyer/Seller App needs
Buyer and Seller fees. In future, revenue
✓ technology support, PROTEAN can act
App sharing based on volumes
as a Technology service provider.
can also emerge
PROTEAN will provide the
While revenue mechanism is
reconciliation and settlement service
Recon and under discussion, it will be
for all the orders that are processed at
Settlement Service ✓ linked to each transaction
the buyer and seller apps. While
Providers (RSP) and could be as a
competition may emerge, PROTEAN
percentage of order value
will be the first mover as an RSP.
The catalog assigns unique product
Catalogue as a
✓ IDs to each stock-keeping unit and
Service
maintains product meta-data, photos
Scoring Service
✓ Platform for user ratings
Providers
Source: Company data, Equirus securities estimates
December 26, 2023 | 11

International expansion
Given PROTEAN’s expertise in handling IT/ ITES projects and its ability to provide diversified services
and solutions, the company looks to develop similar projects for other countries. The Ministry of External
Affairs, Government of India, has enlisted PROTEAN under its ‘Development Partnership Frameworks’
to promote India’s capabilities globally. As an example, The Ministry of Health and Family Welfare,
Government of India has made CoWIN (an open-source platform) available to different countries for
managing COVID vaccinations and has empaneled PROTEAN as an IT services firm for customization,
implementation and roll out of CoWIN for countries.
PROTEAN is in active discussions with governments on various projects in Africa and South East Asian
PROTEAN is in advanced discussions region. It has participated in bids in five countries (4 in Africa, 1 in Southeast Asia) in the areas of
with multiple governments; some CYCK solutions, digital onboarding, ITAS/Taxation, and National identity/social security. PROTEAN is
international projects are set to also shortlisted for bids submitted for providing solutions in areas of ITAS/taxation and social
materialize soon security/national ID in the African region. The company is committed to taking the following key
components of the India stack to global markets
• National ID
• Integrated Tax Accounting System (ITAS)
• Identity stack (eSign, eKYC, digital onboarding solutions)
• Public Health Care Platform stack: PROTEAN is one of the four companies empaneled by
GOI for international deployment of CoWin
• Open Digital ecosystem (ODE) powered by BeckEn Protocol FIDE
December 26, 2023 | 12

Investment Thesis
A play on Digital India initiatives
PROTEAN commands indomitable market share in its traditional businesses:
1. PAN card issuance (~60% market share in PANs issued since FY11; 2.4bn PAN verifications
in FY23)
2. e-TDS/TIN filings (~60% share in such filings)
3. NPS-CRA (~97% share)
Besides, it has been working on the open digital ecosystem for e-commerce, mobility, healthcare,
Powering India’s rapid digital
agriculture, and education segments. PROTEAN is a founding shareholder and has implemented
transformation
ONDC. With solutions around identity verification/authentication/e-Sign already in place and with
the AA license already secured, PROTEAN will look to build on data analytics solutions. Moreover,
with its competence in managing large databases and servers with strong security measures, the
company has launched ‘Made in India’ cloud services. It also aims to take its knowledge global
and has bid for e-governance-linked projects in other countries. We thus believe PROTEAN offers
a play on India’s rapid digital transformation underway currently.
Exhibit 17: Revenue split across businesses (2QFY24)
Tax Services Pension Services Identity Services Open Digital Ecosystems Others
1% 1%
12%
26%
59%
Diversified, granular, and annuity-based service offerings

A sizeable portion of PROTEAN’s revenue is generated on a per-transaction basis, leading to
Multiple target and customer segments,
granularity and revenue stability. Offerings cater to multiple target groups and customer segments,
including businesses and retail
including businesses and retail consumers apart from the government, ensuring low concentration risk.
consumers apart from the government,
For instance, under the B2B segment, PROTEAN has implemented e-KYC and e-Sign as a service;
ensure low concentration risk
under B2C, it provides PAN enrolment and under business-to-government services, TIN and NPS.
Exhibit 18: Business performance across segments

FY21 FY22 FY23 1HFY24
PAN Cards sent to printer (mn) 29.7 35.5 38.6 28.3
PANs Verified (mn) 937.2 2,122.5 2412.9 1986.0
NPS – New Subscriber Base (mn) 0.8 1.0 1.3 0.5
NPS – Cumulative Subscriber Base (mn) 14.0 15.0 16.3 16.8
NPS – AUM (Rs bn) 5,592.9 6,945.5 8,421.2
Atal Pension Yojana – New Subscriber Base (mn) 6.9 8.2 9.7 5.3
Atal Pension Yojana –Cumulative Subscriber Base 28.1 36.3 46.0 51.3
Atal Pension Yojana – AUM (Rs bn) 156.9 209.2 272.2
Aadhaar Authentication (mn) 179.3 275.0 276.8 272.6
e-KYC (mn) 91.1 174.4 246.0 170.8
e-Sign (mn) 35.6 82.0 101.1 71.2
December 26, 2023 | 13

Exhibit 19: Revenue per transaction for services offered by PROTEAN

Service Facility Revenues (Rs / Transaction) Charges Paid By
TAX Services
New PAN issuance 91 Applicant
PAN Service PAN Reprint 42 Applicant
e-PAN Download 7 Applicant
Up to 100 deductees -
Rs.25/-
101 to 1000 deductees Paid by the
TIN e-TDS return filing charges
Rs.150/- Assessee
More than 1000 deductees
Rs.500/-
TAN TAN Application Rs 65
OPV PAN Verification Rs 0.05-Rs 0.30
NPS Services
Account Opening (Rs) Govt NPS 40 Paid by Govt

Pvt NPS 40 Account Owner
APY 15 Account Owner
Account Maintenance Charges (Rs) Govt NPS 69 Paid by Govt
Pvt NPS 69 Account Owner
APY 20 Account Owner
Transaction Charges (Rs) Govt NPS 3.75 Paid by Govt
Pvt NPS 3.75 Account Owner
APY 0 Account Owner
Source: Company, Respective govt/regulatory websites, Equirus Securities
Limited revenue dependence on government

PROTEAN derives ~80% of revenues in the form of transactional revenues, most of it being paid by
users of the service (generated when user pays on receiving the service). For instance, for PAN services,
Despite being in e-Governance, less the PAN applicant pays at the time of application. In the case of NPS, a new subscriber pays for account
than a sixth of revenues come from the opening at the time of the application. Apart from the above, ~20% of revenue is annuity based and
government largely derived from NPS account maintenance charges. Incrementally, the share of annuity-based
revenues can increase as the cloud business picks up. Within NPS services, a part of the revenue is
paid by the government. As of 2QFY24, ~12% of total revenues came from the government.
Exhibit 20: Revenue split across B2G and non-B2G channels for 2QFY24
B2G Non B2G
12%
88%
December 26, 2023 | 14

Exhibit 21: Transactional and annuity revenues (2QFY24)
Transactional Annuity
20%
80%
Extensive physical infrastructure

PROTEAN has developed a pan-India delivery network for various public and other services, which has
grown from 33,041 centers in FY21 to 79,374 centers as of 1QFY24. The company’s PAN and TIN
facilitation center network is spread over 12,000 pin-codes in India’s 700 districts. In addition, it has
over 87,000 points of presence across India for the administration of NPS.
Exhibit 22: PROTEAN’s pan-India service delivery network
Service network: 79,374 centers as of

1QFY24
December 26, 2023 | 15

Healthy B/S cash of Rs 6.5bn

Post the initial capital infused into the company at the time of inception, PROTEAN has not raised any
fresh capital; entire investments in the development of new products have been funded through internal
accruals. The company has been profitable for more than two decades and has a healthy net cash on
balance sheet of over Rs 6.5bn as of Sep’23; it intends to retain this to fund future expansion and
investment plans through internal accruals. As discussed earlier, key lines of businesses where
PROTEAN is currently investing are Open Digital Ecosystem, cloud services, and international business.
Sound financial track record with consistent dividend payments

PROTEAN’s FY21-FY23 operating revenues grew at a 10.9% CAGR. Incrementally, with contribution
from new businesses, FY24-FY26E revenue CAGR is estimated at ~23%. While FY23E core EBITDA
margins stood at ~16%, the company had earlier clocked core EBITDA margins of ~22%. Also, new
businesses – encompassing technology-based service offerings – will have higher EBITDA margins of
30-35%. Consequently, blended core EBITDA margins should touch ~21% by FY26E. PROTEAN has
~Rs 6.5bn cash & investment on balance sheet and over two decades of dividend payment history.
Exhibit 23: Core EBITDA margins over FY21-FY26E

Core EBITDA margins to touch 21% by
FY26E Core EBITDA Margin
20.9%
20% 19.0%
17.9%
15.9%
15.0%
15% 14.1%
10%
FY21 FY22 FY23 FY24E FY25E FY26E
Experienced senior management, strong corporate governance

PROTEAN is a professionally run company with senior management appointed by the NRC committee
of the board.
• The MD & CEO, Mr. Suresh Sethi, has 30+ years of experience with financial services
companies such as Citi Group, Yes Bank, and Vodafone M-Pesa. Previously, he was MD &
CEO of India Post Payments Bank, where he was recognized as CEO of the Year.
• Other senior management is a combination of lateral recruits and employees who have been
MD & CEO has 30+ years of with the company for more than two decades.
experience; past associations were
• Recent lateral recruits: (a) Mr. Bertran Dsouza – Chief Product & Innovation officer (earlier
with Citi Group, Yes Bank, and
EVP Digital banking, Kotak Bank). (b) Mr. Metesh D B – Chief Digital Officer (earlier SVP &
Vodafone M-Pesa
Head Internal Systems, Digital Innovation & API Banking, HDFC Bank).
• PROTEAN also has a strong Board of Directors with six independent directors with diverse
backgrounds.
December 26, 2023 | 16

Exhibit 24: Management Background

Name of the person Designation Remarks
30+ years of experience with financial services companies Citi

Group, Yes Bank & Vodafone M-Pesa. Previously, MD & CEO of
Suresh Sethi MD & CEO India Post Payments Bank, where he was recognized as CEO of
the Year. Recognized by The Asian Banker and is part of The
Asian Banker’s ‘List of Leading Practitioners’
He has been associated with the company since inception and
Whole-time Director has 30+ years of experience in capital markets and IT-enabled
Jayesh Sule
and COO services. He is responsible for launching new businesses and
overseeing functional capabilities of PROTEAN
20+ years of experience in financial and technology services.
Sudeep Bhatia CFO Ex-Group CFO at Lendingkart Technologies. Worked with
Macquarie, Tata Capital, CitiFinancial Consumer Finance India
Chief Technology 24+ years of experience in software engineering. He joined
Dattaram Mhadgut
Officer protean in 1997
Ex SVP at HDFC Bank. Worked with DSP Investment Managers,
Metesh D. Bhati Chief Digital officer
Investors India Technologies
15+ years of experience in new-age startups and financial
Chief Product & services. Previously, associated with Kotak Mahindra Bank as
Bertram D’Souza
Innovation Officer EVP. Worked with Vodafone m-pesa, TATA Communications,
Atom Technologies
27+ years of experience in business administration. He joined
the company in 1996 and has previously worked with NIIT
Gopa Kumar T.N. Chief Business Officer
Limited, Aqua Faucets Private Limited and Graphic Designers &
Creative Consultants
Exhibit 25: Shareholding post listing

Shareholder No. of shares % Shareholding
Promoter - 0.00%
Public 4,04,46,732 100.00%
NSE Investments Limited 82,34,605 20.4%
IIFL Special Opportunities Fund 1,03,19,847 25.5%
Administrator Of The Specified Undertaking Ofthe Unit Trust Of
24,88,825 6.2%
India-Unit Scheme 1964
State Bank of India 20,00,000 4.9%
HDFC Bank Limited 12,94,326 3.2%
Axis Bank Limited 12,87,923 3.2%
Deutsche Bank A.G. 12,87,923 3.2%
Citicorp Finance India Limited 12,50,000 3.1%
HSBC Limited 12,50,000 3.1%
Standard Chartered Bank 12,50,000 3.1%
Union Bank of India 7,24,457 1.8%
Punjab National Bank 9,13,000 2.3%
Bank of Baroda 6,25,000 1.6%
Canara Bank 5,00,000 1.2%
Others 70,20,826 17.4%
Total 4,04,46,732 100.0%
December 26, 2023 | 17

PROTEAN – Recent Developments/News
PROTEAN Unveils RISE – Offering digital building block APIs (link): PROTEAN has launched a new platform with
over 300 operationalized APIs that offer digital building blocks to solve diverse use cases such as (a) digital
onboarding, (b) regulatory compliances, (c) identity verification, (d) ONDC plug-&-play journeys, (e) healthcare
ABDM connectors, and (f) open network connectors. This platform is a single window for businesses to select
multiple product bundles. These APIs can cater to diverse business requirements across banking, insurance, capital
markets, payments, logistics & e-commerce, lending, payments, merchant onboarding and gaming sectors.
PROTEAN launches cKYC solutions (link): PROTEAN's cKYC solution is specifically engineered to surmount the
challenges faced by financial institutions in adhering to cKYC regulations. Its innovative platform reduces
operational costs, ensures seamless compliance with regulations, all within reduced timeframes, increasing the ease
of on-boarding and reporting KYC-verified customers.
RBI to establish cloud facility for financial sector for enhanced data security (link): The RBI in its Dec’23 monetary
policy has announced setting up of a cloud facility for the financial sector in India. This would enhance the security,
integrity, and privacy of the financial sector. It is also expected to facilitate stability and business continuity. We
believe PROTEAN could be a key player to benefit as a service provider; this is because, if RBI was comfortable with
Amazon web services or Google cloud, it would have likely not proposed setting up of a separate cloud.
Meta announces partnership with ONDC to support small businesses in India (link): Meta has recently announced
a partnership with government-backed ecommerce network, ONDC, to upskill small businesses and leverage
Meta’s business and technical solutions for seamless conversational buyer and seller experiences on Whatsapp.
Meta will look to support ~500k small businesses to get trained in digital marketing and become e-commerce
ready. We believe as volumes pick up on ONDC, PROTEAN will likely be a beneficiary with its array of offerings.
Google Maps, ONDC, Namma Yatri tie up to provide seamless mobility experience (link): A three-way partnership
between Google Maps, Namma Yatri, and ONDC will help users get an end-to-end seamless experience in open
mobility. They look to add local trains, autos, metros as well as cab bookings on the ONDC platform. Incrementally,
ONDC may include long-distance trains and flights bookings. ONDC’s long-term objective is to create an
integrated cart with any product or service catalogueable to be there on ONDC. We believe the expanding set of
use cases on ONDC would be a positive for PROTEAN.
December 26, 2023 | 18

Financial Analysis
We expect a 26% revenue CAGR over FY23-FY26E
PROTEAN reported an 11% CAGR in operating revenues over FY21-FY23. We expect existing
businesses to grow at an ~16% revenue CAGR over FY23-FY26E and bulk of the incremental revenue
growth to come from newer initiatives of ODE, Cloud, and international business. We anticipate a
~126% operating revenue CAGR from newer businesses over FY23-FY26E.
Exhibit 26: Uptick in revenue CAGR over FY23-FY26E to be driven by newer initiatives
-Existing Business -New Initiatives

20,000
15,000
(Rs mn)
10,000
Bulk of incremental revenue growth to
come from new initiatives: ODE,
Cloud, and international business 5,000
0
Exhibit 27: Transaction fees vs. account maintenance fees
Transaction fees Accounts maintenance fees

16,000
14,000
3,985
12,000
Share of account maintenance fees to
3,031
increase as cloud revenues come in 10,000
(Rs mn)
2,050
8,000
1,570
6,000 1,391
1,493 10,698
9,062
4,000 7,587
5,505 5,839
2,000 4,527
0
December 26, 2023 | 19

Core EBITDA margins to improve

We expect core EBITDA margins to improve as (a) the revenue share of tax services reduces, and (b)
higher margin non-PAN businesses deliver faster growth. Consequently, we see core EBITDA margins
improving from 15.9% in FY23 to 20.9% in FY26E. The margin dip in FY23 stemmed from higher
employee costs as (a) the company onboarded some senior-level employees for newer initiatives, (b)
teams were added to support existing and new business growth, and (c) IT sector employees saw higher
wage inflation. Incrementally, we expect employee expenses to increase by 42% in FY24E.
A lower revenue share of tax services Exhibit 28: Core EBITDA margins
and faster growth in higher-margin
non-PAN businesses to drive margins Core EBITDA Margin
20.9%
20% 19.0%
17.9%
15.9%
15.0%
15% 14.1%
10%
Healthy operating cashflows

Given its asset-light business model, PROTEAN has healthy operating cashflows; the ratio of operating
cashflows to PBT stood at 86%/51%/98% for FY21/FY22/FY23. Incrementally too, the company is
expected to deliver healthy operating cashflows as it has limited working capital requirements; revenues
for most businesses are received at the time of transaction or within frequent billing cycles as key
customers are financial services entities with recurring transactional revenues.
Operating cashflows to PBT at

86%/51%/98% for FY21/FY22/FY23 Exhibit 29: Trends in operating cash/PBT
Operating Cash/PBT
120%
102.3%
97.6%
100%
86.3%
76.0%
80%
72.3%
60%
50.8%
40%
December 26, 2023 | 20

RoEs suppressed due to excess cash on balance sheet

Despite an asset-light business model, PROTEAN’s FY23 RoE at 13% has been relatively subdued given
~Rs 6.5bn of cash on balance sheet against an equity of Rs 8.8bn as of 1HFY24. However, adjusted
for cash, core RoE has been healthy at ~39% for FY23.
Exhibit 30: Trends in RoE and core RoE

Ex-cash, core RoE strong at ~39% for
FY23 RoE Core RoE
100%
77.0%
80% 72.3%
60% 53.1%
39.4%
36.0%
40%
18.9%
20%
17.1% 19.8% 17.6% 19.8%

13.0% 14.8%
0%
December 26, 2023 | 21

Valuation & View

Initiate coverage with LONG
We value PROTEAN on FCFE discounting and do three stage projections. Key assumptions: (a) Cost
of Equity at 13.25%, (b) terminal growth rate at 5%, and (c) business segment-wise revenue CAGR as
shown in exhibit 31. Based on these, we arrive at a Mar’25 TP of 1500 set at 26.8x FY26 EPS.
The value of existing business lines as of Mar’25 works to Rs 51bn (Rs 1,260/Share) by valuing these
businesses on FCFE basis as they are free cash generating in nature with minimal incremental capex.
This implies an option value for newer businesses at Rs 9.5bn (Rs 240/Share). Assign LONG
Exhibit 31: Revenue growth CAGR, business vertical-wise

Initiate coverage with LONG and a Businesses FY24-FY26E FY26E-FY34E FY34E-FY44E
Mar’25 TP of 1,500 set at 26.8 FY26
Tax Services 0.4% 5.4% 5.2%
EPS
-of Which PAN -2.2% 2.0% 1.0%
Pension Services 15.8% 10.0% 5.0%
Identity Services 37.0% 17.5% 10.0%
Cloud 186.5% 21.7% 10.0%
ONDC 130.1% 34.7% 12.9%
International Business 0.0% 0.0%
Note: International business revenues are assumed at Rs 1.2bn in FY26E and similar value is maintained for all
subsequent years; Source: Equirus Securities estimates
Exhibit 32: Valuation snapshot & assumptions

Parameters
Valuation Assumptions
Cost of Equity 13.25%
Terminal Growth Rate 5%
Total Valuation
Net Cash as of Mar'25 7,404
Terminal Value for Mar'44 17,936
Sum of PV of FY25-FY44 35,259
Total Valuation (Mar’25) 60,599

Value/ Share (Mar’25) 1,500
CMP 1,208
Upside 24.1%
Source: Equirus Securities estimates
December 26, 2023 | 22

Key risks
Dependency on government
PROTEAN has been working largely in e-governance and has secured various projects from the
government. Incrementally too, it is working on projects of population scale or of national significance
like ONDC, health stack, and agri stack. Even internationally, projects will be linked to
e-governance. While PROTEAN earns less than 15% of its revenues from the government, dependence
on the government for projects remains a risk.
Product pricing in certain businesses is government determined

Pricing for business segments such as PAN issuance and NPS services is determined by the government
department and/or regulators. Therefore, this is a risk of re-pricing depending on volumes in each line
of business.
Data breach & business opportunities

PROTEAN has access to population scale data; any data breach or inadvertent disclosure of
confidential data could adversely affect the company’s reputation and/or attract penalties. Additionally,
as PROTEAN bids for new projects in this segment, instances of data breach can adversely impact
business prospects.
Growth in newer lines of businesses may be lower than expectation

PROTEAN has been making investments in four new lines of businesses: (a) cloud, (b) open digital
ecosystem, (c) data analytics and account aggregator, and (d) international expansion. These
businesses are expected to have a better EBITDA margin profile than the tax business. Consequently,
if growth here is lower than expected, overall revenue growth and EBITDA margin expansion could be
impacted.
December 26, 2023 | 23

Comparable Valuation
EPS RoE (%) DPS (Rs) P/E Dividend Yield
Company CMP
FY23A FY24E FY25E FY23A FY24E FY25E FY23A FY24E FY25E FY23A FY24E FY25E FY23A FY24E FY25E
PROTEAN 1,208 26 33 44 13.0% 14.8% 17.6% 10 12 14 46 37 28 0.8% 1.0% 1.1%

CAMS 2,658 58 68 77 39.8% 39.5% 39.0% 38 44 50 46 39 35 1.4% 1.7% 1.9%
KFINTECH 501 12 14 16 25.8% 23.6% 23.2% - 1 4 43 37 31 0.0% 0.3% 0.8%
CDSL 1,851 26 33 39 23.9% 26.7% 27.9% 16 17 20 70 55 47 0.9% 0.9% 1.1%
Note: CMP as of 26 Dec’23
th
Exhibit 33: PROTEAN has traded at an avg. 1 year fwd. P/E of 32.6x
P/E Average +1 Stdev -1 Stdev
45
40
35
30
25
20
15
10-Dec
20-Dec
10-Nov
20-Nov
30-Nov
Source: Company Data, Equirus, Bloomberg
Exhibit 34: PROTEAN has traded at an avg. 1 year fwd. P/B of 4.5x
P/B Average +1 Stdev -1 Stdev
6.0
5.5
5.0
4.5
4.0
3.5
3.0
20-Nov
10-Dec
20-Dec
10-Nov
30-Nov
Source: Company Data, Equirus, Bloomberg
December 26, 2023 | 24

Quarterly performance
Y/E Mar (Rs mn) 1QFY23 2QFY23 1QFY24 2QFY24 3QFY24E 4QFY24E
Revenue from operations 1,568 1,777 2,204 2,357 2,475 2,601

Recurring revenue 471
Transactional revenue 1,886
Other Income 99 101 128 127 139 147
Total Income 1,667 1,877 2,332 2,484 2,614 2,748
Processing Charges 748 745 1,022 1,163 1,186 1,087
Repairs & maintenance of C&T systems 190 236 261 198 238 0
Other expenses 135 166 180 207 244 633
Total Expenses 1,395 1,533 1,914 2,051 2,172 2,284
Core EBITDA 217 293 341 365 362 382
Profit before tax 272 344 417 433 443 464
Total tax expenses 59 87 95 105 112 113
Net Profit 213 257 322 328 331 351
Cost items as % of sales
Processing Charges 48% 42% 46% 49% 48% 42%

Repairs & maintenance of C&T systems 12% 13% 12% 8% 10% 0%
Other expenses 9% 9% 8% 9% 10% 24%
Margin (%)
Gross Margin 52.3% 58.0% 53.6% 50.7% 52.1% 58.2%

Core EBITDA Margin 13.8% 16.5% 15.5% 15.5% 14.6% 14.7%
PAT Margin 13.6% 14.5% 14.6% 13.9% 13.4% 13.5%
YoY Growth (%)
Revenue from operations 41% 33%

Core EBITDA 57% 25%
PAT 51% 28%
Return metrics
RoE 10.7% 12.6% 14.9% 15.0% 14.8% 15.1%

EPS (Annualized) 21.1 25.4 31.9 32.4 32.8 34.7
BPS 199 203 215 218 226 233
December 26, 2023 | 25

Key Financials (Consolidated)

Income Statement
Y/E Mar (Rs mn) FY20 FY21 FY22 FY23 FY24E FY25E FY26E
Revenue from Operations 7,161 6,031 6,909 7,422 9,636 12,093 14,683
Transaction fees 5,696 4,527 5,505 5,839 7,587 9,062 10,698
Accounts maintenance fees 1,418 1,493 1,391 1,570 2,050 3,031 3,985
Other operational income 48 11 13 13 - - -
Other income 385 489 793 417 541 609 673
Total Income 7,546 6,520 7,702 7,839 10,177 12,702 15,356
Operating Expenses 5,684 5,183 5,671 6,242 8,187 9,790 11,607
Employee benefits expense 686 753 787 1,229 1,744 1,918 2,302
Processing charges (Printing, postage, Service charges) 3,846 3,137 3,363 3,257 4,458 5,391 6,329
Other expenses 1,152 1,293 1,521 1,756 1,985 2,481 2,977
EBITDA 1,863 1,337 2,031 1,596 1,990 2,912 3,749
Core EBITDA (EBITDA - Other Income) 1,478 848 1,238 1,180 1,449 2,303 3,076
Finance costs 16 9 5 9 14 - -
Depreciation and amortization expense 270 168 170 183 220 585 761
Profit Before Tax 1,576 1,160 1,856 1,404 1,757 2,327 2,989
Tax 358 238 417 334 425 563 723
Profit After Tax 1,219 922 1,439 1,070 1,332 1,764 2,265
YoY Growth (%) FY20 FY21 FY22 FY23 FY24E FY25E FY26E
Revenue -5.2% -15.8% 14.6% 7.4% 29.8% 25.5% 21.4%
EBITDA -9.7% -28.2% 51.9% -21.4% 24.7% 46.3% 28.7%
Core EBITDA -16.5% -42.6% 46.0% -4.7% 22.8% 58.9% 33.6%
PAT -34.9% -24.3% 56.1% -25.6% 24.4% 32.5% 28.4%
Key Ratios
Profitability FY20 FY21 FY22 FY23 FY24E FY25E FY26E
Gross Margin 46.3% 48.0% 51.3% 56.1% 53.7% 55.4% 56.9%
Core EBITDA Margin 20.6% 14.1% 17.9% 15.9% 15.0% 19.0% 20.9%
PAT Margin 17.0% 15.3% 20.8% 14.4% 13.8% 14.6% 15.4%
ROE 20.6% 17.1% 19.8% 13.0% 14.8% 17.6% 19.8%
Core RoE 34.4% 18.9% 36.0% 39.4% 53.1% 72.3% 77.0%
Dividend Payout 32.8% 191.6% 28.1% 37.5% 35.0% 31.2% 30.4%
Valuation (x) FY20 FY21 FY22 FY23 FY24E FY25E FY26E

P/E 39.7 52.6 33.9 45.6 36.7 27.7 21.6
P/B 6.4 7.3 6.2 5.7 5.2 4.6 4.0
P/FCFE 1.1 1.6 0.9 1.6 1.0 0.8 0.8
EV/Core EBITDA 30 53 35 36 28 17 13
EV/Sales 6.2 7.4 6.2 5.7 4.3 3.3 2.7
Dividend Yield (%) 1% 4% 1% 1% 1% 1% 1%
December 26, 2023 | 26

Balance Sheet
Share Capital 400 401 404 404 404 404 404
Reserves & Surplus 7,136 6,275 7,476 8,165 9,031 10,244 11,821
Non-Controlling Interest 2 2 2 2 2 2 2
Networth 7,534 6,675 7,880 8,569 9,435 10,649 12,225
Trade Payables 887 988 957 1,318 1,589 1,941 2,295
Other Liabilities 978 961 1,050 1,153 1,215 1,280 1,349
Total Liabilities 9,399 8,624 9,888 11,041 12,238 13,870 15,868
Cash & Cash Equivalents 501 1,151 2,335 1,375 1,280 1,688 1,409
Investments 4,061 2,851 3,636 5,285 6,594 6,921 8,295
Trade Receivables 2,107 1,977 1,998 2,089 1,584 1,988 2,414
Fixed Assets 680 579 690 747 1,180 1,611 2,020
Other Assets 2,049 2,065 1,228 1,545 1,601 1,662 1,730
Total Assets 9,399 8,624 9,888 11,041 12,238 13,870 15,868
Cash Flow
Cash Flow from Operations
PBT 1,576 1,160 1,856 1,404 1,757 2,327 2,989
Depreciation 270 168 170 183 220 585 761
Others/ Other Income -369 -480 -788 -407 -541 -609 -673
Tax Paid -501 -319 -478 -426 -412 -563 -723
Changes in Working Capital -442 472 183 616 773 -57 -81
Net Cash from Operations 535 1,001 943 1,370 1,797 1,683 2,272
Cash Flow from Investing

Capex -118 -93 1,130 -239 -653 -1,016 -1,170
Change in Investment -264 925 -652 -2,928 -1,309 -327 -1,374
Others 256 325 248 343 541 609 673
Net Cash from Investing Activities -125 1,157 726 -2,823 -1,421 -734 -1,871
Cash Flow from Financing

Change in Debt -81 -69 -49 -47 -6 9 10
Change in Equity/ Dividend Paid -313 -1,764 -287 -396 -466 -550 -689
Others - - - -
Net Cash from Financing Activities -393 -1,834 -336 -443 -472 -542 -679
Net Change in Cash and Cash Equivalent 17 324 1,333 -1,896 -96 408 -278
Days (x) FY20 FY21 FY22 FY23 FY24E FY25E FY26E

Payable Days 65 81 72 96 90 90 90
Receivable Days (Reported) 107 120 106 103 60 60 60
Adjusted Receivable Days 61 64 57 57 60 60 60
December 26, 2023 | 27

Rating & Coverage Definitions: Registered Office:

Absolute Rating Equirus Securities Private Limited
• LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap >Rs 5 Unit No. A2102B, 21st Floor, A Wing, Marathon Futurex,
billion and ATR >= 20% for rest of the companies N M Joshi Marg, Lower Parel,
• ADD: ATR >= 5% but less than Ke over investment horizon Mumbai-400013.
• REDUCE: ATR >= negative 10% but <5% over investment horizon Tel. No: +91 – (0)22 – 4332 0600
• SHORT: ATR < negative 10% over investment horizon Fax No: +91- (0)22 – 4332 0601
Relative Rating
Corporate Office:
• OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon
3rd floor, House No. 9,
• BENCHMARK: likely to perform in line with the benchmark
Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge,
• UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon
S.G. Highway Ahmedabad-380054 Gujarat
Investment Horizon
Tel. No: +91 (0)79 - 6190 9550
Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on
last day of a calendar quarter Fax No: +91 (0)79 – 6190 9560
2023 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not be reprinted, sold or redistributed without the written
consent of Equirus Securities Private Limited
Analyst Certification
I, Rohan Mandora/Shreyash Kumath, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or
companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in
this report.
Disclosures
Equirus Securities Private Limited (ESPL) having CIN: U65993MH2007PTC176044 is registered in India with Securities and Exchange Board of India (SEBI) as Research Analyst (Reg. No.
INH000001154), Stock Broker:(Reg. No. INZ000251536), RA: INH000001154, DP: (Reg. No. IN-DP-324-2017) NSE Mem id: 13017|BSE Mem id: 3309|DP ID:84500| having its
Registered office at A 2102 B, A wing, 21st Floor, Marathon Futurex, N. M. Joshi Marg, Lower Parel, Mumbai-400013.. There are no disciplinary actions taken by any regulatory authority
against ESPL for Research Analyst activity. ESPL is a subsidiary of Equirus Capital Private Limited (ECPL) which is registered with SEBI as Category I Merchant Banker and provides investment
banking services including but not limited to merchant banking services, private equity, mergers & acquisitions and structured finance.
As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from
the subject company for investment banking or merchant banking or brokerage services or any other product or services in the past twelve months;(b) managed or co-managed public
offering of securities for the subject company in the past twelve months; or (c) received a mandate from the subject company; or (d) might have other financial, business or other interests
in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their directors and employees may from time to time have positions or options in the company
and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in their proprietary position) 1% or more of the equity securities of
the subject company mentioned in the report as the last day of the month preceding the publication of the research report. ESPL or its Analyst or Associates did not receive any compensation
or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ESPL nor Research Analysts have
any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or
brokerage service transactions. ESPL has not been engaged in market making activity for the subject company.
The Research Analyst engaged in preparation of this Report:-
(a) has not received any compensation from the subject company in the past twelve months; (b) has not managed or co-managed public offering of securities for the subject company in
the past twelve months; (c) has neither received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months
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(d) has not received any compensation or other benefits from the subject company or third party in connection with the research report; (e) might have served as an officer, director or
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Compliance & Grievance Officer: Shital Tamrakar | Tel. No. 079-61909561|email: [email protected] |www.equirus.com |
December 26, 2023 | 28

Equirus Securities - Protean EGov - Initiating Coverage Note

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Protean eGov Technologies Ltd

Enabling Digital India; Initiate with LONG

December 26, 2023

Rohan Mandora ([email protected], +91-79 6901 5014)

Protean eGov Technologies Ltd

December 26, 2023 | 3

Exhibit 1: Timelines of various projects

Source: Company Data, Equirus Securities

Key business lines

December 26, 2023 | 4

Exhibit 2: Cumulative allotment of PAN cards in India

Cumulative No. of Pan Cards

in total PAN allotments since FY11 294

Source: Company Data, Crisil Research, Equirus Securities

Offline (mn) Online (mn)

Source: Company Data, Equirus Securities

Exhibit 4: PAN cards verified annually by PROTEAN

Source: Company Data, Equirus Securities

December 26, 2023 | 5

Tax Information Network (TIN)

Exhibit 5: PROTEAN’s eTDS/TCS market share

Protean Efiling portal of income tax

Source: Company, CRISIL, Equirus Securities

• The company now has a perpetual NPS CRA license.

Exhibit 6: No. of NPS subscribers (as of Jun’23)

December 26, 2023 | 6

Exhibit 7: No. of PMJDY and APY accounts

Exhibit 8: Fee structure for NPS-CRAs

Exhibit 9: Monthly authentication trends at a systemic level

Value (mn) Cumulative Value (bn,RHS)

Source: Aadhar dashboard, Equirus Securities

December 26, 2023 | 7

Exhibit 10: Cumulative e-auth numbers stood at 2234.2mn

400 CAGR 24%

300 275 277

Source: Company Data, Equirus

Exhibit 11: Cumulative online PAN verifications were at 7944.6mn

Source: Company Data, Equirus

• e-KYC services: PROTEAN is an authorized Aadhaar-based e-KYC service provider to

Exhibit 12: Monthly e-KYC trends at a systemic level

Value (mn) Cumulative Value (bn, RHS)

Source: Aadhar dashboard, Equirus Securities

December 26, 2023 | 8

Exhibit 13: For PROTEAN, cumulative e-KYC transactions stood at 1041.2mn

Source: Company Data, Equirus Securities

Exhibit 14: For PROTEAN, cumulative e-Sign transactions stood at 347.6mn

Source: Company Data, Equirus Securities

December 26, 2023 | 9

Services offered by PROTEAN under Cloud:

• Infrastructure as Services (IaaS): Foundational Services (Compute, Storage, Network) & IT

• Platform as a Service (PaaS): Development Environment & Database as a Service

Key Propositions of PROTEAN Cloud

Indian Public Cloud Market (Rs bn)

December 26, 2023 | 10

ODE – Open Digital Ecosystem

• ONDC – Open Network for Digital Commerce

As a founding member of ONDC, ONDC has been conceptualized and implemented by

Exhibit 16: Existing ONDC landscape

December 26, 2023 | 11