Prostarm Info Systems IPO booked nearly 10x on day 2 so far; GMP falls amid strong bidding

The initial public offering (IPO) of Prostarm Info Systems has continued to capture significant investor interest on its second day of bidding. The IPO, which opened on May 27, 2025, witnessed subscriptions exceeding 7.5 times on the very first day, indicating robust demand across all investor categories.

Prostarm Info Systems is offering its shares within a price band of Rs 95-105 each. Investors are required to apply for a minimum of 142 shares and in multiples thereafter. The company aims to raise Rs 169 crore through this IPO, which involves a fresh issue of up to 1,60,00,000 equity shares.

According to the data, the investors made bids for 11,07,87,548 equity shares, or 9.89 times, compared to the 1,12,00,000 equity shares offered for the subscription by 2.50 pm on Tuesday, May 28, 2025. The bidding for the issue shall continue for three-days and shall close on Thursday, May 29.

The allocation for non-institutional investors (NIIs) was subscribed 19.50 times, while the portion reserved for retail investors saw a subscription of 11 times. However, the quota set aside for qualified institutional bidders (QIBs) was booked 94 per cent as of the same time.

Established in 2008 and based in Navi-Mumbai, Prostarm Info Systems specialises in energy storage and power conditioning equipment. The firm designs and manufactures a range of products, including UPS systems, inverter systems, solar hybrid inverters, lithium-ion battery packs, and voltage stabilisers.

The IPO allocation is strategically reserved, with 50% designated for qualified institutional bidders (QIBs), 15% for non-institutional investors (NIIs), and 35% for retail investors. Choice Capital Advisors is the book-running lead manager for the issue, and Kfin Technologiesis the registrar. The share allotment is anticipated to be finalised by Friday, May 30, 2025, with a potential listing on the BSE and NSE on Tuesday, June 3.

In the grey market, Prostarm Info Systems has been commanding a premium of Rs 19 per share, indicating a potential 18% listing gain for investors. This premium has taken a hit despite a sustained interest in the IPO. The grey market premium (GMP) stood at Rs 25 a day ago.

Market analysts have expressed positive sentiments towards the IPO, highlighting the company's experienced management, diversified portfolio, extensive geographical reach, and substantial growth prospects. However, they note aggressive pricing and potential supply chain disruptions as concerns for the company.

Prostarm Info product portfolio finds applications across diverse industries such as data centers, renewable energy storage systems, power backup systems across commercial buildings, hospitals, airports and inverter systems for elevators. Its revenue, Ebitda and PAT have grown at a CAGR of 23 per cent, 49 per cent and 43 per cent over FY22-FY24, respectively, said SBI Securities.

"Growth in FY25E also appears robust based on the annualized numbers. At the upper price band of Rs 105, the stock is likely to trade at 20.2 times annualized FY25E EPS. The valuation appears decent when compared to peers. We recommend Subscribing to the Issue," it added.

For the nine months ending December 31, 2024, Prostarm Info Systems reported a net profit of Rs 22.11 crore and revenue of Rs 270.27 crore. This financial performance follows a net profit of Rs 22.80 crore and revenue of Rs 259.23 crore for the fiscal year ending March 31, 2024.

Prostarm Info Systems boasts a diverse and continually evolving range of products, product verticals, and a broad customer base. They have built a wide customer base across diverse industries by offering products with varied applications and remain focused on strengthening their relationships with domestic customers across all product verticals, said Anand Rathi.

"The issue is valued at 27.1 times its FY24 EPS. Its market cap-to-sales ratio stands at 2.4 times based on its FY24 earnings. They intend to explore opportunities to invest in additional facilities and expand their production capabilities, with a focus on designing, customizing, and integrating automation technologies into their operations," it said with a 'subscribe for long-term' tag.

Overall, the critical dates for this IPO include the open date on May 27, close date, allotment finalisation by May 30, and listing expected on June 3. Investors are advised to confirm UPI mandates by the designated cut-off time to ensure their applications are processed smoothly.