Protean eGov shares tumble 31% in 2 days after I-T Dept rejects bid for PAN 2.0 project; should you still buy?

Shares of Protean eGov Technologies Ltd extended their sharp decline on Tuesday as the market reacted negatively to the company’s exclusion from the next phase of the Income Tax Department’s PAN 2.0 project. The stock has lost over 31 percent in just two trading sessions, dragging valuations near their 52-week lows.

Protean eGov, which had submitted a proposal for the role of managed service provider (MSP) in the ambitious PAN 2.0 project, said the Income Tax Department has not considered its bid favourably for the next round of selection. In an exchange filing, the company clarified that this development is not expected to materially impact its ongoing PAN issuance and processing operations under the current agreement.

"We were informed by the Income Tax department that we have not been considered favourably for the next round of RFP selection process," the company noted, adding that any further updates will be communicated as required. It further explained that PAN 2.0 involves a broader technological revamp of the system, while its existing PAN services remain unaffected for now.

"In our understanding this is a project for Technology revamp which include Design, Development, Implementation, Operations and Maintenance of PAN systems at I-T department and at present, it appears to have limited or minimal impact on our ongoing PAN processing and issuance services under the existing mandate with the tax dept," Protean added.

Analysts Cautious on Revenue Outlook

Brokerage house Equirus Securities downgraded the stock to sell from add, slashing its price target to ₹900 for March 2026—21 percent below Monday’s closing price. The firm said the failure to secure the PAN 2.0 contract poses a significant risk to Protean’s topline, as PAN services currently account for around 50 percent of revenue.

“This is a material negative,” the brokerage said. “While FY26 impact may be muted, we expect a 75-100 percent collapse in this revenue stream over the next 2-3 years.”

Anand Rathi, however, offered a more tempered view. While it acknowledged the development as sentimentally negative, it highlighted that Protean’s core PAN operations remain unaffected and the financial impact may be limited in the near-term.

Veteran Investors Among Shareholders

The company counts some prominent investors among its public shareholders. Veteran investor Ramesh Damani held a 1.05 percent stake at the end of the March 2025 quarter, while Ajay Aggarwal owned 1.12 percent. Though the company does not have a promoter group, several state-owned and private banks are key stakeholders. These include Canara Bank (1.23%), Bank of Baroda (1.54%), Punjab National Bank (2.25%), Axis Bank (3.18%) and State Bank of India (4.93%).

Stock price trend

Despite the company’s attempt to assuage concerns, the market reacted with steep selling. The stock extended its decline on Tuesday, plunging as much as 14.12 percent to hit an intra-day low of ₹981.55. This followed a steep 20 percent drop in the previous trading session, bringing the total loss to over 31 percent across just two sessions.

At current levels, the stock is trading nearly 56 percent below its 52-week high of ₹2,225.00, which it had touched in August 2024. It now hovers just 5.5 percent above its 52-week low of ₹930.00, recorded in June 2024.

Over the past one year, the stock has declined more than 4 percent. On a monthly basis, it has shed close to 20 percent in May alone, after a 2.4 percent dip in April. In March, it posted a modest gain of 1.7 percent. However, that was preceded by a 13 percent fall in February and a sharper 21.5 percent correction in January.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.