Desco Infratech is a dynamic force in India's infrastructure sector, tackling complex challenges across City Gas Distribution, Renewable Energy, Water, and Power sectors. As a significant player in the industry, the company has expanded its expertise, focusing on critical infrastructure such as MDPE and steel pipelines, water infrastructure, and power distribution networks.

The upcoming Desco Infratech IPO, with an issue size of ₹30.75 crores, comprises a fresh issue of 20.50 lakh shares. The IPO subscription opens on March 24, 2025, and closes on March 26, 2025. The shares will be listed on the BSE SME on or about April 1, 2025. The IPO price band is set between ₹147 to ₹150 per share, with a market capitalization of ₹115.14 crores at the upper price band.

Investors looking to participate in the Desco Infratech IPO need to keep in mind the lot size of 1,000 shares. Retail investors must invest a minimum of ₹1,50,000, while High-Net-Worth Individuals (HNIs) are required to invest ₹3,00,000 (2 lots). Smart Horizon Capital Advisors Private Limited acts as the book running lead manager, while BIGSHARE SERVICES PRIVATE LIMITED serves as the registrar. Rikhav Securities Limited is the designated Market Maker for the IPO.

Desco Infratech IPO GMP Today: The Grey Market Premium (GMP) of the Desco Infratech IPO is currently ₹0. This suggests no significant price discovery in the grey market, and investors should refrain from relying on GMP as a trading indicator. It's essential to consider that the GMP fluctuates based on market demand and supply, but it doesn’t offer a clear reflection of the actual listing performance.

Desco Infratech IPO Subscription Status: Desco Infratech IPO is open for subscription on March 24, 2025, and the live subscription status can be checked on the registrar's website once it goes live. For those who have already subscribed, the IPO allotment will be finalized on March 27, 2025, with shares expected to list on April 1, 2025.

Desco Infratech IPO Anchor Investors Report: The company has already raised ₹8.65 crores from anchor investors, allocating 5.77 lakh equity shares at ₹150 per share. The anchor investor portion is allocated from the Qualified Institutional Buyers (QIBs) reservation.

Desco Infratech IPO Objectives: The company intends to use the proceeds from the IPO for:

1. Funding the capital expenditure required to set up a corporate office in Surat, Gujarat (₹104.29 lakhs).
2. Purchasing essential machinery (₹168.04 lakhs).
3. Funding working capital requirements (₹1,800 lakhs).
4. General corporate purposes.

Financial Performance: Desco Infratech has shown a steady growth trajectory in its financials, with revenue increasing over the years. For the period ending September 30, 2024, revenues reached ₹2,274.50 lakh, up from ₹2,928.21 lakh in FY 2023. The EBITDA margin has been consistent, and the company’s profit after tax (PAT) for FY 2024 was ₹338.07 lakh.

Valuation and IPO Review: The pre-issue earnings per share (EPS) stands at ₹6.95, while the post-issue EPS is ₹4.50. The price-to-earnings (P/E) ratio at the upper band of ₹150 is 33.30x, significantly higher than the industry average of 13x. This suggests that the IPO is priced at a premium, and investors should consider the high valuation in their investment decision.

Given the company’s strong sectoral presence and growth, but considering the higher P/E ratio, it’s advisable for potential investors to carefully evaluate their investment horizon and risk tolerance before subscribing to the Desco Infratech IPO. The IPO seems fully priced at present, and investors seeking immediate listing gains might not find the IPO an attractive choice at this point.

The Upcoming IPOs in this week and coming weeks are Arisinfra Solutions Limited,Rapid Fleet Management Services, Active Infrastructures Limited, Desco Infratech Limited, ATC Energies System Limited, Shri Ahimsa Naturals Limited.

The Current active IPO are Grand Continental Hotels.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst