Desco Infratech Limited is a well-established player in India's infrastructure sector. The company is deeply involved in the development of vital infrastructure in sectors such as City Gas Distribution, Renewable Energy, Water, and Power. With a robust portfolio, the company specializes in laying MDPE (Medium-Density Polyethylene) and steel pipelines, constructing essential water infrastructure, and building resilient power distribution networks. Their role in the infrastructure industry has earned them recognition for tackling complex challenges with innovative solutions.

The Desco Infratech IPO is a Book Built Issue amounting to ₹30.75 Crores, consisting of a Fresh Issue of 20.50 Lakh Shares. The IPO subscription period opens on March 24, 2025, and closes on March 26, 2025. The allotment date is expected to be finalized on March 27, 2025, and the listing date is projected to be on April 1, 2025, on the BSE SME segment.

IPO Price Band & Market Capitalization

The share price band for the Desco Infratech IPO is set between ₹147 and ₹150 per equity share. At the upper price of ₹150, the market capitalization of Desco Infratech Limited will be ₹115.14 Crores. The lot size is 1,000 shares, requiring a minimum investment of ₹1,50,000 for retail investors. High-Net-Worth Individuals (HNIs) are required to invest for 2 lots, amounting to ₹3,00,000.

Subscription and Allotment Details

As of 10:30 AM on March 26, 2025, the Desco Infratech IPO subscription status indicates that the IPO has been subscribed 11.05 times on its final day. The Grey Market Premium (GMP) for this IPO is ₹0, indicating no significant trading or price discovery in the grey market. It is important to note that GMP is not a reliable indicator for IPO performance, as it is based on demand and supply in the unorganized market.

Anchor Investors and IPO Allotment Process

Desco Infratech has successfully raised ₹8.65 Crores from Anchor Investors at ₹150 per share, with 5,77,000 equity shares allocated to them. The IPO allotment date is March 27, 2025. Investors can check their allotment status by navigating to the registrar’s website and submitting their application number, PAN, or DP Client ID.

Objectives of the IPO

The primary objectives of the Desco Infratech IPO are as follows:

1. ₹104.29 Lakhs for setting up a corporate office in Surat, Gujarat.

2. ₹168.04 Lakhs to fund the purchase of new machinery.

3. ₹1,800.00 Lakhs for working capital requirements.

4. General corporate purposes.

Desco Infratech IPO Review

Desco Infratech Limited operates in a growing infrastructure sector and has a strong leadership team, including Mr. Pankaj Pruthu Desai, Mr. Malhar P Desai, and Mr. Samarth Pankaj Desai. Their combined expertise has been instrumental in the company’s growth in sectors like City Gas Distribution and Pipeline Construction.

The company has shown steady growth in its financial performance, with revenues of ₹2,274.50 Lakhs for the period ending September 30, 2024. The EBITDA for FY24 was ₹496.77 Lakhs, and the Profit After Tax (PAT) for the same period was ₹338.07 Lakhs. The pre-issue EPS is ₹6.95, and the post-issue EPS is ₹4.50, indicating good financial health.

Key performance metrics include a pre-issue P/E ratio of 21.58x and a post-issue P/E ratio of 33.30x, compared to an industry P/E of 13x. With an ROCE of 39.52% and an ROE of 40.61%, the company demonstrates high efficiency and strong returns.

GMP Analysis and Conclusion

Despite the positive growth in revenue and profitability, the Grey Market Premium (GMP) for this IPO is ₹0, which could indicate weak investor sentiment or concerns regarding valuation. With a P/E ratio higher than the industry average, investors should consider avoiding the IPO for listing gains, especially if they are looking for short-term price appreciation.

In conclusion, while Desco Infratech's long-term potential in the infrastructure sector remains strong, the IPO appears fully priced for investors seeking immediate returns. Therefore, we recommend exercising caution before committing to this IPO.

The Upcoming IPOs in this week and coming weeks are Arisinfra Solutions Limited, Identixweb Limited, Retaggio Industries Limited, Infonative Solutions Limited.

The Current active IPO are ATC Energies System Limited, Shri Ahimsa Naturals Limited, Desco Infratech Limited, Rapid Fleet Management Services, Active Infrastructures Limited.

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