Prostarm Info Systems IPO has made a strong entry into the primary market this May, with its initial public offering (IPO) opening on May 27 and set to close on May 28. The IPO comes amid a flurry of market activity, with four other IPOs launching just last week. One of the most notable aspects of the Prostarm IPO is the 23% surge in its grey market premium (GMP), which currently stands at ₹25 above the issue price, hinting at a potential listing price of ₹130.
The Prostarm Info Systems IPO is a book-built issue with a total size of ₹168 crore, comprising entirely of fresh shares. This means all the funds raised will be directed towards the company’s growth initiatives. The price band has been set between ₹95 and ₹105 per equity share. The final allotment is likely to be confirmed by May 30, with the stock expected to be listed on the exchanges on June 3.
Investor Demand and IPO Structure
Investor interest in the Prostarm Info Systems IPO was evident from the start, with the initial public offering (IPO) being fully subscribed within the initial hours of Day 1. The overall subscription stood at 1.48 times, with the retail category oversubscribed at 1.95 times and non-institutional investors (NII) showing strong interest with a 2.36 times subscription. Qualified Institutional Buyers (QIBs), however, are yet to participate in a significant way.
Retail investors are required to apply for at least one lot of 142 shares, amounting to an investment between ₹13,490 and ₹14,910, depending on the bid price. Small NIIs need to bid for 14 lots, equating to 1,988 shares or around ₹2.08 lakh, while large NIIs must place a minimum bid for 68 lots or 9,656 shares, translating to approximately ₹10.13 lakh.
Funds raised through the Prostarm Info Systems IPO will be primarily used to pay off outstanding borrowings (₹72.5 crore), fund capital expenditures (₹18 crore), and support inorganic growth through acquisitions and strategic initiatives, according to the company’s Draft Red Herring Prospectus (DRHP).
Market Sentiment and Company Background
Prostarm Info Systems has been garnering attention not just from investors but also from market analysts. Bajaj Broking, in its IPO note, highlighted that the company has shown consistent growth in both revenue and profits. The significant jump in profitability since FY23 is attributed to the firm’s ability to offer a comprehensive range of services under one umbrella. While the brokerage considers the IPO fully priced based on current financials, it recommends the offering for long-term investors.
Founded in the energy solutions sector, Prostarm Info Systems designs, manufactures, and supplies a wide array of power management products. These include uninterruptible power supply (UPS) systems, lift inverters, solar hybrid systems, lithium-ion battery packs, voltage stabilisers, and more.
The Prostarm Info Systems IPO is being managed by Choice Capital Advisors as the lead book-running manager, while Kfin Technologies serves as the registrar. As the closing date nears, investor enthusiasm and market buzz suggest that Prostarm Info Systems IPO could be one of the standout listings in an already crowded IPO season.
