Nagpur-based IT services firm Virtual Galaxy Infotech has announced a memorandum of understanding (MoU) with Xangars Infratech Solutions for the deployment of 1,00,000 UPI- and QR-based sound boxes, marking a significant expansion in its fintech and digital payments play.
Virtual Galaxy-Xangars Deal Structure & Financial Impact
Virtual Galaxy-Xangars MoU outlines a phased rollout of 1 lakh sound boxes over three years, with an expected topline addition of INR 69 crore plus applicable taxes. These sound boxes, which provide real-time voice confirmations of UPI/QR transactions, are increasingly becoming an essential touchpoint for merchants in both Tier-1 cities and smaller towns.
For Virtual Galaxy, whose FY24 revenue stood at INR 63.50 crore with a net profit of INR 16.54 crore, this deal represents a revenue pipeline that is larger than its most recent annual sales. While execution will be staggered, the order strengthens its positioning in India’s fast-growing digital payments infrastructure market.
Market Context: Riding India’s Digital Payment Boom
India’s merchant-acquiring landscape has seen fierce competition between payment players such as Paytm, PhonePe, BharatPe, and Pine Labs, all of whom have aggressively deployed sound boxes. By tying up with Xangars Infratech, Virtual Galaxy is positioning itself as a B2B technology enabler for this ecosystem rather than competing directly with consumer-facing payment brands.
Analysts note that the INR 69 crore order, though not transformative in absolute terms for large-cap fintech firms, is highly material for a newly listed SME IT company. It enhances revenue visibility while signaling strong credibility in handling scale-oriented digital payment projects.
Virtual Galaxy IPO Journey
Virtual Galaxy-Xangars Infratech MoU comes just months after Virtual Galaxy Infotech’s successful IPO.
- The company raised INR 93.29 crore via a public issue of 65.7 lakh shares at INR 142 apiece in May 2025.
- The IPO was oversubscribed by a staggering 231x, attracting bids worth more than INR 14,400 crore against the INR 93 crore offer size.
- On listing, shares opened at INR 180, a 26% premium, reinforcing strong investor appetite.
Proceeds from the issue are earmarked for:
- Setting up an additional development facility in Nagpur’s MIHAN-SEZ (INR 34 crore capex planned).
- Enhancing and maintaining existing products.
- Repaying INR 3 crore in debt.
- Purchasing GPU, server, and storage systems.
- Business development and marketing expansion.
Strategic Outlook and Regional Pride
Promoters Avinash Shende and Sachin Pandey, both from Nagpur, have positioned the company as a rising IT services and consulting player with fintech as a strategic growth vector. Maharashtra Chief Minister Devendra Fadnavis lauded the IPO success, highlighting its role in creating 1,000 jobs over two years and strengthening Nagpur’s IT ecosystem.
Industry watchers see the Virtual Galaxy-Xangars partnership as a validation of the company’s ability to secure repeat, high-visibility orders in digital payments infrastructure. The firm’s SME listing success, combined with post-IPO announcements, reflects a “growth-through-scale-execution” story.
Stock Market Reaction
Following the announcement of the MoU, Virtual Galaxy’s shares rose 1.72% to INR 189.75 on 9 September 2025, signaling investor optimism about the revenue visibility from the contract.
Given its modest valuation of ~INR 350 crore at IPO and strong order inflow momentum, the stock remains on analysts’ radar as a potential small-cap fintech enabler play, albeit with execution risks tied to rollout timelines and competitive pricing pressures in the payments device space.
Conclusion
Virtual Galaxy Infotech’s MoU with Xangars Infratech is more than just order—it is a proof of concept that the company can transition from being a regional IT services firm to a credible digital payments infrastructure provider at scale. With its IPO proceeds funding capacity expansion and new partnerships fueling growth visibility, the company is carving out a niche in India’s rapidly evolving fintech ecosystem.
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