VL E-Governance & IT Solutions Reports No Deviation in Rs. 400.99 Crore Preferential Issue Fund Utilization

VL E-Governance & IT Solutions Limited has reported no deviation from stated objectives in its preferential issue fund utilization for the quarter ended September 30, 2025, according to the monitoring agency report submitted by Care Ratings Limited.

Key Highlights

The company raised Rs. 400.99 crore through share warrants to non-promoter investors, down from the originally planned Rs. 630 crore due to undersubscription.
As of September 30, 2025, Rs. 111.08 crore had been utilized, with Rs. 3.23 crore remaining unutilized and deployed in fixed deposits.
The company's share price stood at Rs. 27.07, significantly below the warrant exercise price of Rs. 75.

Fund Allocation and Utilization

The funds raised through the preferential issue have been allocated across six objectives:

Objective	Revised Allocation (Rs. Crore)	Amount Utilized (Rs. Crore)
Large-scale e-governance projects	30.00	0.00
Business expansion	50.00	40.00
Strategic investment	75.00	0.00
Existing/new projects	75.99	0.00
Loan repayment	70.00	67.21
General corporate purposes	100.00	3.87
Total	400.99	111.08

Unutilized Funds Deployment

The remaining unutilized funds of Rs. 3.23 crore have been deployed as follows:

Rs. 3.00 crore in Fixed Deposits with Union Bank of India, maturing on April 21, 2026, at a 7.30% interest rate.
Rs. 0.23 crore in a monitoring account with Union Bank of India.

Shareholding and Share Price Impact

The preferential issue has led to changes in the company's shareholding pattern:

Promoter shareholding decreased from 33.16% (pre-preferential issue) to 23.24% as of September 30, 2025.
Post-warrant conversion, promoter holding is expected to further decrease to 15.81%.

The company's share price has experienced significant volatility:

A 58% decline since the preferential issue announcement.
An 86% drop from its peak price.
The current share price of Rs. 27.07 is substantially lower than the warrant exercise price of Rs. 75.

Potential Challenges

The monitoring agency has highlighted that the undersubscription in the issue and the current share price being below the exercise price may affect the viability of the stated objectives. The delay in receiving the remaining 71.32% of the subscribed warrant amount could impact the implementation of the company's plans.

Conclusion

While VL E-Governance & IT Solutions Limited reports no deviation from its stated objectives in fund utilization, the undersubscription of the preferential issue and the current market price of its shares pose potential challenges. Investors should closely monitor the company's ability to execute its plans and the potential impact on future warrant conversions.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-5.04%	-16.09%	-26.30%	-61.49%	-87.47%	-31.59%

VL E-Governance & IT Solutions Limited has reported a mixed financial performance for Q2 FY2025-26, with increased revenue on a half-yearly basis despite a temporary decline in quarterly results. The company has also made significant strides in expanding its business portfolio through strategic partnerships and acquisitions.

Financial Performance

VL E-Governance's financial results for Q2 FY2025-26 show a nuanced picture of the company's performance:

Particulars (₹ in Lakhs)	Q2 FY2025-26	Q2 FY2024-25	YoY Change	H1 FY2025-26	H1 FY2024-25	YoY Change
Total Income	330.63	811.32	-59.25%	1,192.05	1,065.51	+11.88%
Total Expenses	382.37	730.12	-47.63%	1,173.71	923.00	+27.16%
EBIDTA	-48.31	81.23	-159.47%	25.12	142.57	-82.38%
Profit after Tax (PAT)	-52.38	81.19	-164.51%	17.04	142.49	-88.04%

While the company experienced a decline in quarterly performance, the half-yearly results show a positive trend with an 11.88% increase in total income. The company maintains its debt-free status, providing a strong financial foundation for future growth initiatives.

Strategic Expansion

VL E-Governance has made significant moves to expand its business portfolio:

Sankalp Industrial Smart City Project

The company signed an MoU with Ekansh Concepts to act as the EPC Partner for this project. Phase I covers 494 acres with an estimated EPC contract value of approximately ₹800 crores.

Acquisition in Defense Sector

VL E-Governance signed a binding term sheet to acquire a 40% equity stake in HAL-Edgewood Technologies Private Limited (HETL), a joint venture of Hindustan Aeronautics Limited. This move marks the company's expansion into high-tech sectors such as aviation, aerospace, defense, and satellite technology.

Future Outlook

The company is actively exploring new business opportunities in various government e-Governance initiatives, including:

Unique Land Parcel Identification Number (ULPIN)
Aadhaar Integration with Land Records
PM e-Drive EV Charging Station Operator (CPO)
Solar Power Project Implementation

VL E-Governance aims to leverage its experience in executing large-scale field-level government projects to bid for these upcoming initiatives.

Management Changes

In a separate announcement, the company appointed Mr. Parth Solanki as the new Company Secretary and Compliance Officer, effective October 31, 2025.

VL E-Governance's strategic moves into defense and smart city projects, coupled with its focus on e-governance initiatives, position the company for potential growth in diverse sectors. However, the recent quarterly financial performance suggests that the company may face short-term challenges as it navigates these expansions and new ventures.