Hi Pavan,
Principal propagation is a must to consume backend apps from the launchpad without having to sign in again. It si required even if you don't use IPS for the role synchronisation.
If you want to setup IPS for the role synchronisation, you'll will have to configure IAS (Identity Authentication Service) too and establish the trust between IAS and your BTP sub-account. In this IAS application configuration you'll set up the subject identifier and you'll have to choose the same as you defined in your SAP Cloud connector for PP (either email or UUID, depending on your. configuration). Here is the dependant configuration point with PP in IAS but there is no relation between IAS/IPS and PP.
I hope this clarify a bit, the best is to experience it by yourself with a mockup.
Pierre
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