The IPO, which closes on May 29, is planning to raise ₹168 crore through an entirely fresh issue of 1.6 crore equity shares by the company.
Prostarm Info Systems IPO: Price band
The Maharashtra-based power solutions products maker will sell its shares in a fixed price range of ₹95 to ₹105. Investors can bid for a minimum of 142 shares and in multiples thereof.
Prostarm Info Systems IPO: Brokerages view
Bajaj Broking has recommended investors to subscribe to the IPO with a long-term perspective.
In its note, the brokerage said that the company marked growth in its top and bottom lines for the reported periods. The sudden boost in its bottom lines from FY23 onward is on account of its ability to provide all related services under one roof. Based on its financial data, the IPO appears fully priced.
Anand Rathi believes that the issue is fairly priced and recommended ‘Subscribe – Long Term’ rating to the IPO.
According to the brokerage, the company intends to explore opportunities to invest in additional facilities and expand their production capabilities, with a focus on designing, customizing, and integrating automation technologies into their operations.
At the upper end of the price band, the company is valued at 27.1x its FY24 EPS. Following the issuance of equity shares, the company’s market capitalisation stands at ₹618 crore, with a market cap-to-sales ratio of 2.4 based on its FY24 earnings.
Prostarm Info Systems IPO: GMP today
The grey market premium (GMP) for Prostarm Info Systems IPO stood at ₹25 as of the morning of May 27. Based on this, the estimated listing price could be around ₹130 per share, compared to the upper price band of ₹105. This shows a likely gain of 23.81% on listing, if the premium holds.
Prostarm Info Systems IPO: Structure
About 50% of the issue size has been set aside for qualified institutional buyers, 15% for non-institutional investors, and the remaining 35% for retail investors.
Prostarm Info Systems IPO: Objective
The company will use ₹72.5 crore out of the net fresh issue proceeds for its working capital requirements, and ₹18 crore for repaying debt.
Further, ₹9 crore will be used for acquisition of further stake of subsidiary to make it a wholly owned subsidiary, and the remaining funds for inorganic growth, and general corporate purposes.
The Agarwal family-owned power electronics solutions competes with listed peers such as Servotech Power System, and Sungarner Energies.
Company overview
Prostarm Info Systems specialises in designing, manufacturing, and selling Energy Storage and Power Conditioning Equipment, known as “Power Solution Products.”
The company manufactures various Power Solution Products, including UPS systems, inverter systems, solar hybrid inverter systems, lithium-ion battery packs, and voltage stabilisers.
Net profit in the FY24 rose 18% to ₹22.8 crore, compared to ₹19 crore in the previous year. Revenue surged 12% to ₹258 crore during the same period, while EBITDA for the year ended March 2024 climbed 29.8% to ₹35 crore. Margins expanded by 190 basis points to 13.7%, compared to previous fiscal 2023.
Choice Capital Advisors is the book-running lead manager of the Prostarm Info Systems IPO, while Kfin Technologies is the registrar for the issue.
The allotment for the Prostarm Info Systems IPO is expected to be finalised on May 30, while the shares will list on BSE, NSE with a tentative listing date fixed as June 3, 2025.
