Ramesh Damani owned small cap Protean eGov crashes 20%; Here’s why

Protean eGov Technologies Ltd shares fell 20 per cent on Monday, May 19, after the firm confirmed that it had not made the list to make it to the next round of the Income Tax Department’s PAN 2.0 project. The stock went to its lower circuit of Rs 1,143.05, creating panic in the minds of retail investors and casting doubts on the firm’s future revenue pipeline.

PAN 2.0 Snub Sends Stock Into Tailspin

The Income Tax Department’s Rs 1,440-crore PAN 2.0 programme is focused on overhauling the nation’s permanent account number (PAN) and tax deduction account number (TAN) system with new-age digital infrastructure. Protean, previously known as NSDL e-Governance Infrastructure Ltd, was a trendsetter in handling current PAN services and Aadhaar-based authentication.

But in a filing with the stock exchange, the company said, “We were intimated by the Income Tax department that we have not been considered favourably for the next round of RFP (Request for Proposals) selection process.” The news triggered a sell-off since investors anticipated that the project would generate a significant revenue increase.

Stock Performance 

By 2:12 PM IST on May 19, the shares fell by Rs 285.70 or 19.99 per cent to Rs 1,143.20. The sharp decline pulled the stock below all its key short- and long-term moving averages — 5-day, 10-day, 50-day, 100-day and 200-day — which is usually taken as a signal of ongoing weakness.

Market data also reflected increased activity, with more than 1.51 lakh shares changing hands on the Bombay Stock Exchange. Relative strength index (RSI) was at 33.45, which means the stock is just short of being in the oversold territory.

Retail Investors and PSU Banks Among Top Stakeholders

One of the investor concerns of greatest extent is the shareholding pattern of Protean eGov. The firm has no promoters, but retail investors hold a major portion of its ownership. According to March 2025 numbers, 1.98 lakh individual investors holding shares of up to Rs 2 lakh each owned collectively around 39 per cent of the firm.

Institutional investors also have significant exposure. Prominent public sector banks like State Bank of India have 4.93 per cent, Punjab National Bank 2.25 per cent, Axis Bank 3.18 per cent, Bank of Baroda 1.54 per cent and Canara Bank 1.23 per cent.

Even prominent individual investors like Ramesh Damani and Ajay Aggarwal have 1.05 per cent and 1.12 per cent respectively.

Financial Metrics 

While it has a legacy in India’s digital infrastructure sector, the financial numbers of Protean eGov are not very aggressive. Its price-to-earnings (P/E) ratio is 49.50 and price-to-book (P/B) is at 4.85. It had earnings per share (EPS) of Rs 23.09 and a return on equity (RoE) at 9.79 per cent.

Outlook

With the company losing out on the high-stakes PAN 2.0 contract, analysts believe Protean eGov will need to aggressively pursue other digital transformation projects to retain investor confidence. The stock may remain under pressure in the near term given weak technicals and the emotional impact on retail investors who form a large part of its shareholder base.