Protean eGov Shares Slide 20% After Exclusion from PAN 2.0 Project
Shares of Protean eGov Technologies Ltd. fell sharply by 20% on Monday after the company disclosed that it was not selected for the next phase of the Income Tax Department’s PAN 2.0 project.
In a filing to the stock exchanges on Sunday, Protean said it had participated in the bidding process for the PAN 2.0 project, which involves revamping the technology infrastructure for PAN services. However, the company was not shortlisted for the next round.
“This project appears to be a tech overhaul of the PAN system and doesn’t immediately affect our ongoing PAN issuance services under the current agreement with the Income Tax Department,” the company clarified in its statement.
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Despite management’s assurance that there will be no short-term impact on its operations or financials, investor sentiment turned negative, leading to the stock hitting the lower circuit at ₹1,143.20. The stock has now erased all gains made this year and is down 22% year-to-date.
Retail investors take a hit
The selloff is particularly concerning as over 39% of the company is owned by nearly 2 lakh retail investors. Veteran investor Ramesh Damani also holds a 1.05% stake, while institutional shareholders include names like SBI (4.93%), Axis Bank (3.18%), and PNB (2.25%).
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What does PAN 2.0 mean for Protean?
According to company officials, PAN 2.0 is focused on design, development, and system upgrades, and is not connected to the actual processing or distribution of PAN cards — areas where Protean is currently active. The firm stated that nearly 75% of PAN applications continue to come via its established distribution network and the transition to the new system may still take a couple of years.
Brokerage opinions divided
Brokerages offered mixed reactions. Equirus downgraded the stock to “sell,” citing risks to the company’s main revenue stream, which PAN services currently make up about 50% of. It also slashed its price target from ₹1,730 to ₹900.
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On the other hand, Anand Rathi said the development is more of a sentimental hit in the short term, and believes the financial impact is minimal since core operations remain intact.
Out of six analysts covering the stock, five still recommend a “buy,” while one has a “hold” rating.
Disclaimer: This post is for general informational purposes only. It does not constitute financial advice. Please consult a qualified professional before making financial decisions.
