The underlying prowess of Protean lies in its strategic approach. Technology-centric operations form the backbone of their framework, translating into remarkable operational efficiency. Their operational margins, have been consistently robust. Moreover, Protean’s nimble approach has enabled it to enhance its tech offerings without the business needing heavy capital expenditure. 

On the business front, Protean has the advantage of being a near monopoly in much of its lines of business. “We were given the mandate to create the tax information network in 2003, affirms Sethi. “Subsequently, in 2009, we became the central record-keeping agency for the national pension scheme for the PFRDA. Today, we hold 97 per cent of the pension and in the Atal Pension Yojana, which operates on the same platform, we manage 100 per cent of the business”.

Such achievements are not limited to the pension domain. Protean’s foray into the identity space, under a service agency license from UIDAI, shows it adaptability and prowess. “Other than pensions, we have done extensive work in the identity sector, offering E-sign, E-KYC, and E-Authentication services”, notes Sethi, emphasising the company’ robust market presence with a staggering 70 per cent market share.

“The company has a unique business model with 98-100 per cent market share in the NPS/APY,” adds the SBICAP Securities note. “The company has posted constant profitability, positive cash flow over the last three financial years. It is poised to grow with the rising number of PAN card and is expected to allot 50-60 million annually till 2026-27”.

Next level

Building upon its impressive legacy, Protean continues to fortify its position in India’s digital landscape. Particularly noteworthy is the company’s substantial work in the realm of identity. “Under a service agency licence from UIDAI, we have been providing E-sign, E-KYC, and E-Authentication services” informs Sethi, highlighting Protean’s dominant role with a commanding 70 per cent market share in this space. 

Protean, established by three foundational institutions (the National Stock Exchange, IDBI, and UTI Mutual Fund), has seen its shareholder base expand to include a multitude of private sector banks and global custodians. “By 2016, shareholders had equal stakes. Today, we proudly count around 15 marquee shareholders, including NSE Investments Limited”, adds Sethi.

Yet, it is not just about the past; Protean’s gaze is firmly set on the future. This was when it decided to undergo a transformative rebranding. “We undertook some strategic diversifications, venturing into new business lines,” says Sethi, elaborating on this decision. “A comprehensive study of customers, stakeholders, and emerging market segments revealed a need for a distinct identity”. 

But the change was not just about adopting just a new moniker; it was about reflecting the core essence of the company. Sethi adds: “Agility was a theme we wanted to emphasise, even in our name. That’s why we chose Protean, symbolising our agility, multi-faceted nature, and adaptability to changing times.” This change culminated in a revamped Protean E-Governance Technologies, a name that aptly embodies its spirit and vision.

Building on its legacy of adaptability and innovation, Protean is proactively fortifying its leadership core. As a vanguard in population-scale Digital Public Infrastructure & Regulatory Tech, the need for bolstering its leadership roster showcases ambitious growth plans ahead for Protean. The company’s extensive reach, spanning domains like tax infrastructure, pension infrastructure, Digital IDs, Data Stack, and beyond, signals a company in momentum, preparing for its next evolutionary phase.

Protean’s recent inductions include industry stalwarts, such as Bertram Dsouza, donning the mantle of chief product & innovation officer; Sudeep Bhatia, taking over as chief financial officer; Gaurav Ramdev, spearheading marketing efforts as chief marketing officer; and Metesh Bhati, driving digital initiatives, as chief digital officer. The collective expertise of these recent additions, together boasting over a century of diverse experience from sectors such as banking, start-ups, FMCGs and technology set-ups, accentuates Protean’s dedication to pushing the boundaries of innovation.

But this leadership transition is more than just a change in personnel; it signifies a shift in strategy and approach. Protean is evolving -- from a key contributor in digital public infrastructure to a hub of innovative prowess. The objective is clear: empower the next billion users through strategic leadership and progressive ideas. With an enhanced board architecture providing strategic oversight, Protean is not just adapting; it’s pioneering, ready to chart new territories in the realm of Digital Public Infrastructure.

Protean also boasts of professional management since inception. “We have been professionally managed,” says Sethi. “And, we do not have any promoters. Bhave was our first CEO, and since his tenure, the company has branched out into numerous e-governance projects. This underscores Protean’s ethos -- a blend of innovation rooted in the traditions and values of a ‘more growth’ organisation”.

Broadening horizons

One major shift for the firm is its move towards creating comprehensive on-boarding journeys on its foundational IT services stack. The goal is to provide a holistic solution similar to what fintechs offer in collaboration with banks. Besides, this segment has a lot of potential. Over 2020-21 and 2025-26, Crisil Research expects domestic IT services’ revenue to log a CAGR of 6-8 per cent. “The growth will be led by technology and platform upgradation, and e-governance initiatives of the central and state governments,” says Crisil Research.

With an account aggregator licence in hand, Protean is gearing up to delve deeper into data analytics, supporting financial institutions with credit scoring, monitoring, and lending processes. Another significant push is towards operating the open digital ecosystem (ODE). Sethi highlights the company’s proactive approach in this domain. “After the establishment of Aadhar in India, the government has envisioned similar public infrastructures for sectors like digital commerce, health, and agriculture,” he informs. “Recognising this potential, we have decided to nurture in-house expertise in open-source standards and today, we are actively involved in five new ODEs. In fact, Protean stands as the tech powerhouse behind platforms like the digital ONDC stack and has been instrumental in connecting demand with supply in various sectors”.

The company is also betting big on cloud and infotech consulting, leveraging its extensive experience in managing national databases. “With 28 years under our belt, managing secure and compliant databases, it was a natural progression for us to venture into the cloud business, offering our services on a private cloud,” Sethi remarks.

Sethi has unveiled plans of a global outreach, aiming to introduce their suite of services to international markets. “We are targeting countries interested in setting up infrastructures for national identification, taxation and social security. Currently, we are engaged with numerous countries in Africa and southeast Asia, showcasing the prowess of the India Stack”.

Solid foundations

In the volatile world of business, a company’s financial health often speaks volumes of its strategies, operations, and the trust it garners among its stakeholders. For Protean eGov Technologies, this resounds with robustness and reliability. The company has consistently showcased stellar financial performance, a feat that has been driven by its technologically advanced operations, and low operational costs.

Perhaps one of the most striking aspects of Protean’s financial acumen is its self-reliance. Since 1998, the company has funded its operations entirely through internal accruals, with no external debt. The firm’s commitment to its stakeholders is evident in its consistent dividend declarations and payments, a practice upheld since Fiscal 2001. CFO Bhatia sheds light on the company’s current financial landscape: “We are a cash-generating, profitable company that do not need external funding to grow”. 

Still, no other company matches Protean’s network and it will be difficult for other business ventures to duplicate the network. In fact, the firm boasts a comprehensive service network that stretches across the length and breadth of India.

One thing is for certain, Protean’s business is a steady cash generating business, and the industry that the firm operates in has good growth prospects. “Domestic IT services revenue is set to log a compounded annual growth rate of 6-8 per cent. The growth will be led by technology and platform upgradation, and e-governance initiatives of the central and state governments. E-governance aims to make interactions between government and citizens, government and business enterprises, and inter-agency relationships more friendly, convenient, transparent, and economical,” says Crisil Research.

 Demand trajectory

Demand for basic proofs such as PAN card is set to grow. “PAN card allotment is expected to be driven by expansion in taxpayer base, growth in financial inclusion, thereby mandating the usage of PAN cards, working age population, GDP growth, and increasing contribution of the formal economy. Considering the past growth trend in the number of allotments and the demographic and economic scenario of India, total PAN card allotment is expected to reach 880-900 million by 2026-27,” says the SBICAP Securities report.

Digital e-learning and healthcare initiatives are some of the new growth areas that will see substantial growth, including the development of ODE. Building on the projected growth in sectors like e-learning, healthcare and, particularly with the rising demand for PAN cards in rural areas, due to increasing internet penetration, Protean eGov Technologies is strategically poised for its next major financial maneuver.

“We aim for more diversification in the future,” affirms Sethi. “Every core area we develop opens up opportunities in other segments”. For the new investors, this means not just long-term growth and returns but also a stake in a company that’s shaping the future of digital governance in India and beyond.