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Prostarm Info Systems IPO: Prostarm Info Systems' initial public offering (IPO) is scheduled to kick off for subscription on Tuesday, May 27, and will remain open until Thursday, May 29.

The company aims to raise ₹168 crore through the offering, which is a completely fresh issue of 1.60 crore shares. The IPO price band is set at ₹95 to ₹105 per share. Of the total offering, 50% is reserved for Qualified Institutional Buyers (QIBs), 35% for Non-Institutional Investors (NIIs), and 15% for Retail Investors.

Retail investors can apply for a minimum of 142 shares in one lot and in multiples thereafter. At the upper end of the IPO price band ( ₹105), retail investors are required to make a minimum investment of ₹14,910 per lot.

Let us take a look at some of the key points mentioned in Prostarm Info Systems' RHP:

Prostarm Info Systems, founded in 2008, is a power electronics company specializing in uninterruptible power supply (UPS) systems and energy storage solutions. It primarily caters to mission-critical sectors such as banking, healthcare, telecom, defense, oil and gas, education, and infrastructure.

With a product mix ranging from traditional UPS systems to lithium-ion battery packs and solar-powered inverters, Prostarm positions itself as a reliable partner for organizations needing continuous and clean power. The company’s mission revolves around delivering technologically advanced, cost-effective power backup and conditioning solutions tailored to India’s diverse infrastructure demands.

The primary objectives of the IPO are geared toward fueling the company’s expansion and strengthening its financial position. A major portion of the proceeds— ₹7,250 lakh—will be used to meet increasing working capital needs.

Additionally, ₹1,795.83 lakh is earmarked for prepayment or repayment of certain borrowings, helping reduce interest burden and improve leverage ratios. The rest of the funds will go toward inorganic growth opportunities, such as strategic acquisitions and partnerships, enabling Prostarm to strengthen its technological capabilities and market presence.

Prostarm operates two manufacturing units—one in Navi Mumbai and another in Pune—and has recently expanded its lithium-ion battery pack production capacity. The company maintains a network of 12 regional sales offices and over 100 service touchpoints across more than 20 Indian states. In-house design and engineering capabilities further strengthen Prostarm’s ability to tailor solutions for a diverse set of clients, ranging from small enterprises to large public sector undertakings.

The company has built a diversified and evolving product suite that includes online and line-interactive UPS systems (ranging from 1 KVA to 4800 KVA), servo voltage stabilizers, solar hybrid inverters, battery monitoring systems, and lithium-ion battery packs.

It also offers integrated solar photovoltaic (PV) systems for industrial and institutional clients. Through its wholly owned subsidiary—Prostarm Energy Systems—it also caters to customized power electronic solutions for niche sectors.

Its revenue from operations increased from ₹171.31 crore in Fiscal 2022 to ₹257.87 crore in Fiscal 2024, representing a Compounded Annual Growth Rate (CAGR) of 22.69%. Similarly, our profit for the year rose from ₹10.87 crore in Fiscal 2022 to ₹22.83 crore in Fiscal 2024, reflecting a strong CAGR of 44.91%.

According to the CARE Report, Prostarm's revenue from operations for fiscal 2024 ranked second among its peer group companies, following Servotech Renewable Power System Limited. In terms of EBITDA, it reported the highest figure in fiscal 2024 among its peers and recorded an impressive year-on-year EBITDA growth of 29.8% over the last three fiscal years.

The company also stated that it achieved the highest PAT margin among its peer group. Regarding Return on Assets (RoA), Prostarm reported the highest figure in FY24 at 11.2%, significantly above the peer average of 5.6%.

Similarly, in terms of return on equity (RoE), the company claimed the highest performance in FY24 at 26.6%, exceeding the peer average of 13.5%. For Return on Capital Employed (RoCE), it also achieved the highest return in FY24 at 36.3%, compared to the peer average of 21.7%.

Prostarm operates in high-growth segments like energy storage systems, power backup, and renewable-integrated UPS. According to the industry report commissioned from CareEdge, the solar-powered UPS market alone is projected to grow at a CAGR of 16.83% till FY30. Growth in sectors like telecom, healthcare, and digital banking will further drive demand for robust and uninterrupted power solutions.

Moreover, government incentives under the Production-Linked Incentive (PLI) schemes and the push for renewable adoption will enhance the demand for lithium-ion storage and integrated energy systems.

While Prostarm's business fundamentals and growing demand for energy storage sets are attractive, investors should note key risk factors. The company operates in a working capital-intensive environment, requiring significant inventory and receivables management.

Any delay in payments from large clients could stretch cash flows. Additionally, a portion of its revenue is derived from government tenders and PSU orders, which may expose the company to regulatory or policy-driven delays.

Technology obsolescence and increasing competition, particularly from global players entering India’s energy market, could also pose long-term threats to market share and pricing power.

Choice Capital Advisors Private limited has been appointed as the book running lead manager (BRLM) to the issue, while the Registrar to the issue is KFin Technologies limited.

The allotment of shares for the Prostarm Info Systems is expected to be finalised on Friday, May 30, 2025. Tentative listing on both the BSE and NSE is scheduled for Monday, June 03, 2025.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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