Prostarm Info Systems Limited is a technology-driven company engaged in designing manufacturing assembling selling and servicing of Energy Storage Equipment and Power Conditioning Equipment collectively referred to as Power Solution Products. These include UPS systems inverters lift inverter systems solar hybrid inverters lithium-ion battery packs servo-controlled voltage stabilizers SCVS and isolation transformers catering to the growing energy and power stability needs across India.

The company is coming out with an Initial Public Offering IPO through the book-built route. The issue comprises a fresh issue of 160 lakh equity shares aggregating to ₹16800 crores. There is no offer-for-sale OFS component. The subscription window for the IPO will open on May 27 2025 and close on May 29 2025. The basis of allotment is expected by Friday May 30 2025 and the tentative listing date is June 3 2025 on both the BSE and NSE.

The price band for the IPO is set between ₹95 to ₹105 per equity share with a market capitalization of ₹61818 crores at the upper price band. The lot size for retail investors is 142 shares translating to a minimum investment of ₹14910. For High-Net-Worth Individuals HNIs the minimum bid is 14 lots 1988 shares amounting to ₹208740.

The Book Running Lead Manager BRLM for the issue is Choice Capital Advisors Private Limited and KFin Technologies Limited will act as the Registrar.

Financial Overview

Prostarm Info Systems has demonstrated consistent growth in its financials over the past few years

• Revenue from Operations

  • FY2022 ₹1720477 lakh

  • FY2023 ₹2323465 lakh

  • FY2024 ₹2592325 lakh

  • 9M FY2024 ending Dec 31 ₹2702708 lakh

• EBITDA

  • FY2022 ₹165779 lakh

  • FY2023 ₹291479 lakh

  • FY2024 ₹366225 lakh

  • 9M FY2024 ₹358900 lakh

• Profit After Tax PAT

  • FY2022 ₹108705 lakh

  • FY2023 ₹193455 lakh

  • FY2024 ₹227980 lakh

  • 9M FY2024 ₹221076 lakh

The Earnings Per Share EPS for FY24 is ₹544 pre-issue and ₹396 post-issue. At the upper end of the price band the Price to Earnings PE ratio stands at 1930x pre-issue and 2652x post-issue compared to an industry average PE of 149x. This suggests that the IPO is fully priced offering limited margin for error for short-term investors.

Return on Capital Employed ROCE is 3241 percent Return on Equity ROE is 3209 percent and Return on Net Worth RoNW also stands at 3209 percent for FY24. These figures reflect operational efficiency and decent capital returns.

The annualized EPS based on latest financial data is ₹694 translating to a PE ratio of 1511x. This reaffirms the pricing as moderately aggressive which may limit upside for listing day gains.

Market Sentiment and GMP

The Grey Market Premium GMP for Prostarm Info Systems stands at ₹14 indicating a potential listing gain of 1333 percent based on the upper price band. However it is important to note that GMP is unofficial and speculative and it is not regulated or recommended as an investment indicator.

Promoter Experience and Management

The company is led by Ram Agarwal the Founder Promoter Director and CEO who brings over 16 years of experience in the power backup solutions sector. The management team is actively involved in operations contributing to sustainable growth and strategic direction. Their leadership has played a vital role in the companys expansion and technological innovation.

Industry Outlook

With India’s push towards energy efficiency renewable integration and smart infrastructure the demand for power backup inverters and lithium-ion solutions is on the rise. Companies like Prostarm are well-positioned to capitalize on this momentum especially with their hybrid and lithium-based product offerings.

Risk Factors

Despite its robust growth there are a few red flags for cautious investors

• IPO is fully priced reducing upside for listing gains

• GMP-driven hype may not materialize into actual listing returns

• Highly competitive market with larger better-capitalized peers

• Relatively small issue size compared to larger cap IPOs affecting liquidity post-listing

Verdict

Considering the moderate pricing decent financial growth 1333 percent GMP and industry tailwinds the Prostarm Info Systems IPO may appeal to investors with a long-term outlook. However for those looking purely for listing gains the offer appears risky due to the fully priced valuation.

Final Recommendation

Risk-averse investors should avoid Prostarm Info Systems IPO for listing gains while long-term investors with confidence in the energy storage and power conditioning market may consider a small exposure after evaluating overall portfolio risk.

The Upcoming IPOs in this week and coming weeks are Neptune Petrochemicals, Aegis Vopak Terminals, Schloss Bangalore, Astonea Labs, Nikita Papers, Prostarm Info Systems, Victory Electric Vehicles International, Blue Water Logistics, Wagons Learning.

The Current active IPO are Unified Data - Tech Solutions, Dar Credit and Capital, Belrise Industries.

The Closed IPOs are Borana Weaves.