Desco Infratech, a prominent player in India's infrastructure development sector, is set to launch its IPO in 2025. Specializing in City Gas Distribution, Renewable Energy, Water, and Power sectors, the company provides key services including laying MDPE and steel pipelines and constructing vital infrastructure across these sectors. The company aims to raise ₹30.75 crores through this Book Built Issue, consisting solely of a Fresh Issue of 20.50 Lakh shares.

IPO Details and Subscription Period

• IPO Opening Date: March 24, 2025

• IPO Closing Date: March 26, 2025

• Allotment Date: March 27, 2025

• Listing Date (Tentative): April 1, 2025

The IPO will be listed on the BSE SME, and the price band is set at ₹147 to ₹150 per equity share. The lot size is 1,000 shares, with a minimum investment required for retail investors at ₹1,50,000. High-net-worth individuals (HNIs) will need to invest a minimum of ₹3,00,000 (2 lots). The IPO's market capitalization at the upper price band of ₹150 per share is ₹115.14 crores.

Grey Market Premium (GMP) and Live Subscription Status
As of March 26, 2025, the Grey Market Premium (GMP) of the Desco Infratech IPO is ₹0, indicating no expected price premium. The GMP reflects the supply-demand scenario in the unorganized market, which may not be indicative of future stock performance post-listing. The live subscription status shows that the IPO has been subscribed 77.74 times on its final day of subscription, reflecting strong investor interest in the issue.

Anchor Investors Report
Desco Infratech has raised ₹8.65 crores from anchor investors, who have been allocated 5,77,000 shares at ₹150 per share. This demonstrates the confidence of institutional investors in the company.

Objectives of the IPO
The funds raised through this IPO will be utilized for the following purposes:

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

2. ₹168.04 Lakhs for purchasing machinery.

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

4. General corporate purposes.

Financial Performance and Key Metrics
The company has demonstrated steady growth over the years. For the fiscal year 2024, Desco Infratech recorded revenues of ₹2,274.50 lakh, a slight decline from ₹2,949.47 lakh in 2023. However, its EBITDA for FY 2024 stood at ₹496.77 lakh, marking significant improvement over previous years. Profit after tax (PAT) for FY 2024 was ₹338.07 lakh, further indicating the company’s consistent growth trajectory.

Valuation and Investment Outlook
Desco Infratech's pre-issue Earnings Per Share (EPS) stands at ₹6.95, while the post-issue EPS is expected to be ₹4.50. With a pre-issue Price-to-Earnings (P/E) ratio of 21.58x and a post-issue P/E ratio of 33.30x, the IPO is priced above the industry average P/E ratio of 13x. The company’s Return on Capital Employed (ROCE) and Return on Equity (ROE) for FY 2024 are both strong at 39.52% and 40.61%, respectively. However, considering the premium valuation and the absence of any listing gains reflected in the GMP, investors may choose to approach this IPO with caution, as it may not provide immediate listing gains.

Conclusion
Desco Infratech’s IPO offers a promising opportunity for investors interested in the growing infrastructure sector, but its high valuation may be a concern for those seeking quick returns. Investors should carefully assess the company's financial performance, the valuation, and the overall market conditions before making their investment decisions.

The Current active IPO are Aten Papers & Foam Limited, Infonative Solutions Limited,Spinaroo Commercial Limited,Retaggio Industries Limited.

The Closed IPOs are  Identixweb Limited, ATC Energies System Limited, Shri Ahimsa Naturals Limited, Desco Infratech Limited.

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