IPO listed on 3 Jun'25
Prostarm Info Systems Ltd
Minimum Investment
₹ 14,910 / 142 shares
Grey market premium
₹ 12 (11% premium)
Issue price
₹ 105
Listing price
₹ 120
Listing day %
20%
Listing on
June 3, 2025
Our Verdict:
Subscribe
- Prostarm Info Systems Ltd (Prostarm) has shown strong financial growth, backed by industry-leading return ratios and profitability margins. FY25E growth also looks promising based on annualized figures.
- From a valuation perspective, the IPO appears reasonably priced with a price-to-earnings (P/E) ratio of 19x based on FY24 earnings. The grey market premium (GMP) for the IPO further indicates a positive listing on the stock exchanges.
- Given the company’s diversified product portfolio, solid financials and fair valuation, investors may consider subscribing to the IPO with a medium-to-long term perspective.
About the company
Founded in
11 Jan'08
Managing director
Tapan Ghose
- Prostarm specializes in the design, manufacturing, assembly, sale, servicing and supply of energy storage and power conditioning equipment, including UPS systems, inverter systems, lift inverters, solar hybrid inverters, lithium-ion battery packs, servo-controlled voltage stabilizers, etc. It operates 3 manufacturing units located in Maharashtra.
- The company also sells and supplies third-party power solution products, including batteries, reverse logistics and end-of-life products, as well as IT equipment, solar panels and allied products. Additionally, it executes rooftop solar photovoltaic power plant projects on an EPC basis, supported by a network of 21 branch offices and 2 storage facilities spanning 18 states and 1 union territory in India.
STRENGTHS
- Solid Financial Growth: From FY22 to FY24, Prostarm delivered a strong CAGR of 23% in operational revenue, 49% in EBITDA and 45% in net profit.
- Robust Return Metrics: Prostarm demonstrates strong operational efficiency with impressive return metrics— Return on Net Worth (RoNW) at 32.09% and Return on Capital Employed (RoCE) at 32.41% in FY24—surpassing its listed peers.
- Expanding Profit Margins: Profitability has strengthened consistently, with EBITDA margins increasing from 9.67% in FY22 to 14.20% in FY24 and net profit margins rising from 6.35% to 8.84% over the same period.
- Diverse Industry Presence: Prostarm serves a wide range of end-use sectors, including healthcare, aviation, research, BFSI, railways, defence, security, education, renewable energy, IT, oil & gas. Key clients include PSU Banks, L&T, Tata Power and Bajaj Finance. The firm is also an empanelled vendor for prestigious entities such as Airports Authority of India, Telangana State Technology Services, Railtel and NTPC Vidyut Vyapar Nigam.
- Strong Customer Retention: In FY24, Prostarm served 700+ customers, with 40% having a relationship of three or more years. These long-term customers contributed 40% of the operating revenue in FY24, highlighting sustained client loyalty and recurring business.
RISK FACTORS
- Client Concentration: As of December 31, 2024, approximately 72% of Prostarm’s revenue is derived from its top 10 customers. A decline in business from these key customers could adversely affect its operations and results.
- Cash Flow Concerns: Prostarm has reported negative operating cash flow for the nine months ending December 31, 2024, as well as for FY24 and FY23. Persistent negative cash flows may impact business continuity and financial health.
- Legal Risks: Prostarm and its promoters, directors and subsidiaries are currently involved in legal proceedings with outstanding claims totalling ~Rs 30.8 crore. A negative outcome from these legal challenges could harm the company’s reputation, financial health and cash flows.
- Contingent Liabilities: As of December 31, 2024, Prostarm reported contingent liabilities of Rs 25.75 crore, which, if materialized, could adversely affect its financial position.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 168 crore
Fresh Issue
₹ 168 crore
OFS
₹ -
Price range
₹ 95 - 105
Lot size
142 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for:
- Meeting the company’s working capital requirements;
- Repayment or prepayment of certain outstanding borrowings;
- Pursuing inorganic growth through potential acquisitions and strategic initiatives; and
- General corporate purposes.
Dates
Bidding open
27 May'25
Bidding close
29 May'25
Allotment date
30 May'25
Refund date
2 Jun'25
Listing
3 Jun'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.