Desco Infratech Limited, a company specializing in infrastructure development, is ready to go public with its IPO. The company operates in critical sectors such as City Gas Distribution, Renewable Energy, Water, and Power. Desco Infratech provides services like laying MDPE and steel pipelines, and constructing robust water and power distribution networks. The IPO will allow investors to participate in a rapidly growing sector that is crucial for India’s infrastructure development.

Desco Infratech IPO Details
Desco Infratech is launching a Book Built Issue amounting to ₹30.75 Crores, comprising a fresh issue of 20.50 lakh shares. The IPO will open for subscription on March 24, 2025, and close on March 26, 2025. The share price band is set at ₹147 to ₹150 per equity share, and the IPO’s market capitalisation at the upper price band of ₹150 per share is ₹115.14 Crores. The shares are expected to list on the BSE SME on or around April 01, 2025. The IPO lot size is 1,000 shares, requiring retail investors to invest a minimum of ₹1,50,000. High-Net-Worth Individuals (HNIs) need to invest in a minimum of two lots, totaling ₹3,00,000.

Desco Infratech IPO Subscription Status and Grey Market Premium (GMP)
As of March 26, 2025, the IPO subscription status shows a staggering subscription rate of 77.74 times on its final day. The Grey Market Premium (GMP) for the Desco Infratech IPO is reported to be ₹0, indicating no premium and potentially no immediate listing gain. It's important to note that GMP is highly volatile and should not be relied upon as a definitive indicator for investment decisions.

Desco Infratech IPO Anchor Investors
Desco Infratech has raised ₹8.65 Crores from anchor investors, with 5,77,000 equity shares allotted at ₹150 per share. The funds raised from anchor investors show confidence in the IPO, though the IPO is still considered fully priced based on its P/E ratio of 33.30x, significantly higher than the industry P/E ratio of 13x.

Desco Infratech IPO Allotment Process
The IPO allotment is expected to be finalized by March 27, 2025. Investors can check their allotment status on the registrar’s website after the allotment date. To check the status, they will need their application number, PAN, or DP Client ID.

Objectives of Desco Infratech IPO
The net proceeds from the IPO will be utilized for:

1. Funding Capital Expenditure: ₹104.29 Lakhs will be used for setting up a corporate office in Surat, Gujarat.

2. Purchase of Machinery: ₹168.04 Lakhs will go toward the acquisition of new machinery.

3. Working Capital Requirements: ₹1,800.00 Lakhs will support working capital needs.

4. General Corporate Purposes: The remaining funds will be used for general corporate activities.

Desco Infratech IPO Financial Performance
Desco Infratech has shown steady growth in its financial performance. For the fiscal year ending September 30, 2024, the company reported revenues of ₹2,274.50 Lakh and a profit after tax of ₹338.07 Lakh. The company’s EBITDA margin improved over the years, and its profit after tax showed consistent growth from ₹82.51 Lakh in FY 2022 to ₹345.80 Lakh in FY 2023.

The company’s return on equity (ROE) for FY24 stands at an impressive 40.61%, which reflects strong profitability. Despite these strong financials, the company’s high P/E ratio and the lack of any Grey Market Premium may signal a lack of immediate listing gains, which might make it less attractive for investors looking for short-term gains.

Desco Infratech IPO Review
Desco Infratech’s IPO appears to be fully priced, with the post-issue P/E ratio standing at 33.30x, much higher than the industry P/E ratio of 13x. However, the company's solid growth trajectory and its operations in critical sectors like City Gas Distribution and Renewable Energy make it a potentially strong player in India's infrastructure development market.

While the IPO is expected to be fully subscribed and the company shows a solid financial performance, the lack of Grey Market Premium and the fully priced nature of the IPO may make it less appealing for listing gain investors. We recommend cautious evaluation for those looking to invest in this IPO, particularly for long-term growth potential.

Key Takeaways

• Subscription Status: The IPO has been subscribed 77.74 times on its final day of subscription.

• IPO Price Band and Market Capitalisation: ₹147-₹150 per share with a market cap of ₹115.14 Crores.

• Financial Metrics: Strong financials with a profit after tax growth, but a high P/E ratio might limit short-term listing gains.

In conclusion, Desco Infratech presents a unique opportunity for investors interested in infrastructure development. However, based on the current metrics and market sentiment, it might be wise to consider long-term investment rather than immediate listing gains.

The Upcoming IPOs in this week and coming weeks are Arisinfra Solutions Limited, Infonative Solutions Limited,Spinaroo Commercial Limited,Aten Papers & Foam Limited.

The Current active IPO are Retaggio Industries Limited,Identixweb Limited, ATC Energies System Limited, Shri Ahimsa Naturals Limited.

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