As India’s BFSI (Banking, Financial Services, and Insurance) sector undergoes rapid digital transformation, all eyes are on Virtual Galaxy Infotech, a seasoned tech provider preparing to go public. The upcoming Initial Public Offering (IPO) of Virtual Galaxy, scheduled from 9 May to 14 May 2025, presents investors with a unique opportunity to participate in a SaaS-focused company with over two decades of operational experience, a strong product suite, and robust financial metrics. Here’s an in-depth look at what makes the Virtual Galaxy IPO Review stand out from an investor’s lens.
Table of Contents
Virtual Galaxy IPO Review: Offer Details
- Price Band: INR 135 to INR 142 per share
- Lot Size: 1,000 shares, requiring a minimum investment of INR 1,42,000
- Issue Type: Fresh Issue – 65.70 lakh shares, raising INR 88.70 to INR 93.29 crore
- Retail Investor Quota: 35%
- Listing Exchange: NSE EMERGE
- IPO Timeline:
- Allotment: 15 May 2025
- Refunds: 16 May 2025
- Listing Date: 19 May 2025
Grey market sentiment as of 8 May 2025 shows a GMP (Grey Market Premium) of INR 12, indicating modest positive sentiment, with Subject to Sauda trades around INR 10,000.
Virtual Galaxy IPO Review: Business Overview
Founded in 1997 in Nagpur, Virtual Galaxy offers a comprehensive suite of software solutions primarily for the BFSI, ERP, and e-governance sectors. With clients across 15 Indian states and international markets including Tanzania and Malawi, the company serves banks, NBFCs, SACCOs, APMCs, and state departments.
Flagship Products:
- E-Banker: A core banking software for banks and NBFCs, offered both on-premise and via SaaS.
- IBS-ERP: ERP for SMEs in sectors like sugar, fertilizer, and education.
- V-Pay: A digital payment platform supporting UPI, Aadhaar Pay, BBPS, and more.
- E-APMC: E-governance platform for agricultural market committees.
- V-SOC & E-Autopsy: Network security and post-mortem automation software.
With over 329 employees and ISO 9001:2015, ISO/IEC 27001:2013, and other certifications, Virtual Galaxy delivers secure, scalable, and regulation-compliant technology.
Virtual Galaxy IPO Analysis: Financial Performance
Virtual Galaxy’s financials present a compelling growth trajectory:
| FY 2022 | FY 2023 | FY 2024 | 9M FY 2025 | |
| Revenue | 42.62 | 58.48 | 61.46 | 101.25 |
| EBITDA | 10.09 | 13.01 | 30.97 | 45.50 |
| Net Income | 1.26 | 1.79 | 16.30 | 27.42 |
| Margin (%) | 2.96 | 3.06 | 26.52 | 27.08 |
| RONW (%) | 2.00 | 3.52 | 39.95 | – |
| EBITDA (%) | 23.67 | 22.26 | 50.38 | 44.94 |
| ROCE | 7.71 | 9.95 | 31.68 | 33.39 |
| Debt-to-Equity | 1.77 | 1.90 | 0.93 | 0.39 |
The jump in profitability and margins, especially from FY23 to FY24, reflects not just top-line growth but substantial improvements in operational efficiency.
Virtual Galaxy IPO Review: Revenue Model
Virtual Galaxy’s revenues stem from a balanced mix of SaaS subscriptions (44.7%), software product sales and services (43.7%), and hardware-related income (11.6%). A majority of the revenue is annuity-based, from long-standing clients, ensuring cash flow visibility. As of December 2024, recurring revenue from existing clients contributed over INR 69.13 crore, with newer business adding INR 32.12 crore.
Their order book stands at INR 47.29 crore, across BFSI and ERP domains, spread over Maharashtra, Goa, Telangana, Karnataka, and Rajasthan, along with nine export projects.
Virtual Galaxy IPO Review: Comparison with Listed Peers
When compared with listed industry peers, Virtual Galaxy Infotech stands out for its strong return on net worth (RoNW) of 39.82%, significantly outperforming Veefin Solutions (6.95%) and even the more established Trust Fintech (34.58%). With a net asset value (NAV) per share of INR 24.81, it demonstrates healthy fundamentals relative to its expected IPO pricing of INR 135–142.
While its earnings per share (EPS) of INR 9.88 puts it behind Network People Services Technologies (EPS of INR 13.78), Virtual Galaxy’s potential price-to-earnings (P/E) ratio in the range of 13.47–14.17 offers a far more attractive valuation, especially compared to peers trading at lofty P/E multiples over 200. This suggests the IPO may be fairly priced and provides upside potential for value-conscious investors.
Virtual Galaxy IPO Analysis: Strength
1. Proven Product-Market Fit in BFSI
E-Banker alone is handling millions of transactions daily across banks in India and Africa. The integrated solutions support regulatory compliance and a wide range of banking services – from RTGS to EKYC to Mobile Banking – providing real-world utility and adoption.
2. Robust Intellectual Property Base
Virtual Galaxy owns IP for several products including E-Banker, IBS-ERP, V-Pay, and E-Autopsy. These assets are monetized via licensing and SaaS models, enabling margin expansion and scale.
3. Strong Promoter Leadership
With over 26 years of sectoral experience, co-founders Avinash Narayanrao Shende and Sachin Purushottam Pande have guided the company through multiple technology cycles, maintaining relevance and profitability.
4. Impressive Financial Turnaround
From modest margins in FY22 to EBITDA margins of nearly 50% and PAT margins above 26%, Virtual Galaxy has significantly strengthened its bottom line. A low debt-equity ratio (0.39x) further adds to financial stability.
5. Strategic Expansion Plans
Proceeds from the IPO will fund a new Mihan SEZ facility, server infrastructure, and hiring, enabling the company to grow its 329-strong workforce to 500 and increase global delivery capacity.
Virtual Galaxy IPO Review: Risks & Considerations
- Revenue Concentration:Â Most of the revenue comes from Core Banking software, E-Banker. Single product line exposure to competitive, technological or market risks.
- Geographic Concentration: Most of the revenue comes from Maharashtra customers. Any regional economic, political or regulatory issues may impact the company’s operations and financials.
- Pending Litigations:Â Company is involved in various tax related litigations of INR 17.96 crore. Unfavorable outcome may impact financials and reputation.
- Litigation against Key Management:Â Promoters, Directors and other key management are also involved in tax related proceedings of over INR 4 crore which may raise governance and regulatory concerns.
- Callable Debt:Â Company has unsecured loans of INR 16.84 crore which are repayable on demand. Any sudden repayment may lead to liquidity crunch and operational disruption.
- Negative Investing Cash Flows:Â Company has been experiencing negative cash flows from investing activities for last few years. Sustained negative flows may constrain growth and increase dependence on external funding.
- Unprovided Contingent Liabilities: As of 31 December 2024, the company has contingent liabilities of over INR 50 crore including tax claims and bank guarantees. If crystallized, may impact the company’s financials.
- Operational and Regulatory Risks:Â Company may face legal claims from employees, customers or regulatory bodies in the normal course of business which may lead to investigations, fines or reputation damage.
Virtual Galaxy IPO Analysis: Conclusion
With a clear focus on mission-critical software for financial institutions, a diversified revenue stream, and solid financials, Virtual Galaxy Infotech positions itself as a dependable digital transformation partner in India’s rapidly evolving fintech landscape.
The IPO offers a chance to invest in a profitable, fast-growing, and niche player within the SME segment. While the high entry cost may limit participation, long-term investors looking for exposure to India’s BFSI tech backbone may find this IPO a worthy addition to their watchlist. For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.