Prostarm Info Systems IPO: Powering Profits or Overcharged Valuation?

Introduction

India’s energy reliability is improving, but power disruptions still threaten industries that rely on continuous operations. That’s where Prostarm Info Systems Limited IPO steps in. Since 2008, the company has provided power continuity solutions—ranging from UPS systems and inverters to lithium-ion batteries and solar hybrid units—serving essential sectors like defence, aviation, IT, and healthcare.

Now, Prostarm is entering the public market with a ₹168 crore IPO, aiming to scale further, reduce debt, and expand its working capital. The company has grown consistently, built a pan-India service network, and secured long-term government contracts.

But here’s the real question: Is this IPO a high-potential energy play or just another mid-cap priced for perfection?

Let’s decode the numbers and the narrative.

IPO Details

Prostarm Info Systems plans to raise ₹168 crore through a 100% fresh issue of 1.6 crore equity shares. The IPO opens on May 27, 2025, and will close on May 29, 2025. Shares will be listed on both BSE and NSE, with a tentative listing date set for June 3, 2025.

Here’s what you need to know:

Key Metrics	Details
IPO Price Band	₹95 to ₹105 per share
Face Value	₹10 per share
Lot Size	142 shares
Retail Min Investment	₹14,910
Total Issue Size	₹168 crore
Fresh Issue Only	1.6 crore shares
Pre-Issue Shareholding	100%
Post-Issue	To be updated
Lead Manager	Choice Capital Advisors Pvt Ltd
Registrar	KFin Technologies Ltd

Reservation Split

Category	Allocation
QIB	Not more than 50% of the net issue
NII (HNI)	Not less than 15% of the net issue
Retail	Not less than 35% of the net issue

With a competitive pricing band and no offer-for-sale dilution, this IPO aims to attract both institutional and retail attention. However, the ultimate investor response will depend on growth visibility and financial strength—both of which we’ll explore next.

Important Dates

Investors planning to participate in the Prostarm Info Systems IPO should take note of the following key dates. The company has a fast turnaround time between allotment and listing, which is common for well-structured book-built IPOs.

Event	Date
IPO Opens	Tuesday, May 27, 2025
IPO Closes	Thursday, May 29, 2025
UPI Mandate Cut-off	5 PM on May 29, 2025
Allotment Finalization	Friday, May 30, 2025
Refunds Initiated	Monday, June 2, 2025
Shares Credited to Demat	Monday, June 2, 2025
Listing on BSE & NSE	Tuesday, June 3, 2025

By confirming the UPI mandate on time and placing bids at the cut-off price, retail investors can maximize their chances in case of oversubscription.

IPO Objectives

Prostarm Info Systems is raising capital primarily to support its operational expansion and balance sheet optimization. The company has identified three key objectives for deploying the IPO proceeds:

1. Working Capital Requirements – ₹72.5 Cr

Prostarm operates in a capital-intensive industry where it needs to manage inventory, project execution, and vendor payments. The majority of the funds will go towards meeting these short-term needs, enabling the company to take on larger orders across sectors.

2. Debt Repayment – ₹17.96 Cr

The company plans to reduce its reliance on borrowed capital by prepaying or repaying existing loans. This move will strengthen its financial structure and improve its debt-to-equity ratio.

3. Strategic Growth and Acquisitions

A portion of the funds will support future acquisitions or joint ventures, allowing the company to scale up its technological capabilities or market presence. The remaining amount will be used for general corporate purposes.

This allocation indicates that Prostarm isn’t just looking for stability—it’s planning for growth and market consolidation in the long run.

Company Business: Powering India’s Energy Continuity

Prostarm Info Systems Limited has built a solid reputation over 16 years by delivering power conditioning and energy storage solutions tailored to India’s critical sectors. The company designs, manufactures, assembles, and sells a wide range of products such as UPS systems, inverters, voltage stabilisers, lithium-ion battery packs, and solar hybrid systems.

In addition to in-house manufacturing, Prostarm leverages contract manufacturing arrangements in India and China to meet growing demand efficiently. This dual approach helps the company maintain flexibility, manage costs, and quickly adapt to evolving technology requirements.

Manufacturing Infrastructure

The company operates three manufacturing units, all located in Maharashtra:

• Unit I & II – Pisoli, Pune (Unit II is under subsidiary Prostarm Energy Systems Pvt Ltd)
• Unit III – Mahape, Navi Mumbai

These facilities handle design, assembly, value engineering, and product customisation. Over the past three years, Prostarm has ramped up its “Make in India” focus, aiming to exercise greater control over its supply chain while increasing localisation.

Business Segments & Revenue Breakdown

Prostarm operates across four verticals. Here’s how revenue is distributed:

Segment	Dec 2024 (%)	FY24 (%)	FY23 (%)	FY22 (%)
Manufactured Power Products	28.56%	55.93%	39.09%	39.62%
Third-Party Products & Services	63.46%	30.37%	54.20%	56.23%
Solar EPC Contracts	6.21%	9.18%	3.94%	1.11%
Value-Added Services (AMC, etc.)	1.77%	4.51%	2.77%	3.04%

Notably, the company earns a significant share from third-party product sales, but has gradually increased its share of in-house and contract-manufactured products, reflecting a strategic move towards higher-margin and brand-owned offerings.

Customer Base & Retention

Prostarm served over 700 customers in FY24, spanning critical sectors such as:

• Healthcare
• Defence
• Aviation
• IT
• Railways
• BFSI
• Education
• Renewable Energy

Public sector clients include the Airports Authority of India, RailTel Corporation, NTPC Vidyut Vyapar Nigam, and multiple state-level government departments. Customer stickiness is high—40% of clients in FY24 had been associated for three or more years, and this segment contributed the same percentage to annual revenue.

This long-term association speaks to the company’s reliability and continued relevance in high-stakes operations.

Supply Chain & Contract Manufacturing

While Prostarm sources most of its components from India and China, it maintains strong ties with five key contract manufacturers located in Delhi, Ahmedabad, and China. These partners supply custom-designed UPS systems, SCVS units, lift inverter systems, and isolation transformers based on Prostarm’s specifications.

Additionally, the company customises and value-engineers products to meet specific customer requirements—helping it compete not only on price but also on technical precision.

Financials: Solid Performance Backed by Growth and Efficiency

Prostarm Info Systems has shown a consistent financial growth trajectory over the last three years. The company’s revenue and profitability have improved steadily, driven by its expansion into high-demand sectors and a balanced mix of in-house and outsourced manufacturing.

Let’s break down the numbers.

Consolidated Financial Performance (₹ in Crore)

Particulars	FY22	FY23	FY24	9M FY25 (Dec 2024)
Revenue	172.05	232.35	259.23	270.27
PAT	10.87	19.35	22.80	22.11
Total Assets	98.03	155.39	203.05	230.04
Net Worth	40.95	61.00	84.30	107.24
Borrowings	3.21	24.85	43.47	60.37

Key Metrics (As of FY24 and 9M FY25)

Metric	Value	Comment
PAT Margin	8.85%	Healthy margins for a mid-scale electronics firm
ROE	31.41%	Excellent return on equity
ROCE	32.41%	Strong capital efficiency across business operations
Debt-to-Equity	0.51	Moderate and manageable leverage
RoNW	32.09%	Indicates sustainable growth backed by internal accruals
P/BV (Post-Issue)	5.34	Reasonable for a consistently profitable company

Interpretation

• Revenue Growth: Revenue has grown at a CAGR of over 22% from FY22 to FY24. Even more impressively, the company has already surpassed FY24 revenue within the first 9 months of FY25.
• Profitability: PAT nearly doubled in two years, and margins remain stable. This reflects pricing discipline and operational efficiency.
• Balance Sheet Strength: Borrowing has risen to support growth, but debt levels are well under control with a 0.51 debt/equity ratio.
• Capital Efficiency: With ROE and ROCE both above 30%, Prostarm demonstrates strong capital utilisation—a rare feat in the mid-cap hardware space.

Prostarm’s numbers suggest a well-managed, profitable business that’s scaling responsibly without overextending its balance sheet.

Valuation: Reasonably Priced with Superior Efficiency

At the upper end of the price band (₹105 per share), Prostarm Info Systems is seeking a market capitalisation of ₹618.18 crore. Based on its post-issue EPS of ₹5.01, the implied P/E ratio stands at 20.97x, making it one of the more reasonably priced companies in its segment.

Let’s compare it with similar listed entities:

Peer Comparison (As of March 31, 2024)

Company	EPS (₹)	P/E (x)	RoNW (%)	P/BV Ratio
Prostarm Info Systems	5.44	20.97	32.09	5.34
Servotech Power Systems Ltd.	0.55	243.00	10.50	12.6
Sungarner Energies Ltd.	5.22	55.00	16.78	10.95

Interpretation:

• P/E Comfort: With a P/E of just 20.97x, Prostarm is priced far more attractively than peers like Servotech (243x) and Sungarner (55x). This provides a cushion for value-conscious investors.
• Superior RoNW: Prostarm’s RoNW of 32.09% is significantly higher than both listed peers, indicating better capital efficiency and internal return generation.
• Balanced Valuation: Despite a strong RoNW and stable growth, the company has not gone overboard with pricing. The P/BV ratio of 5.34 also suggests that investors aren’t overpaying for its book value.

Bottom Line

Prostarm offers one of the most attractive valuation profiles in the energy storage and power solutions segment. While its peers trade at aggressive multiples with lower returns, Prostarm combines reasonable pricing with high profitability, making it stand out in a niche yet growing industry.

Prostarm Info Systems IPO GMP Trend (Day-Wise)

Here’s the recent GMP (Grey Market Premium) movement for the Prostarm Info Systems IPO. It reflects how the unofficial market expects the stock to list, based on demand from investors before listing day:

Date	IPO Price	GMP	Estimated Listing Price	Estimated Profit
27-May-2025	₹105.00	₹25	₹130 (23.81%)	₹3,550
26-May-2025	₹105.00	₹25	₹130 (23.81%)	₹3,550
25-May-2025	₹105.00	₹0	₹105 (0.00%)	₹0

💡 Insight:
Prostarm Info Systems IPO GMP saw a sudden surge from ₹0 to ₹25 on 26-May and has held steady. A listing gain of nearly 24% is currently being anticipated in the grey market, signaling strong demand and renewed interest after a flat start.

Conclusion: Prostarm Info Systems IPO

Prostarm Info Systems operates in a mission-critical industry—power continuity—and does so with notable financial discipline and operational breadth. It’s profitable, capital-efficient, and growing steadily without over-leveraging itself. With a product lineup spanning UPS systems, battery packs, inverters, and solar EPC, the company caters to essential infrastructure and institutional clients across India.

Key Positives:

• Strong RoNW of 32.09% and stable 3-year profitability
• Reasonable P/E valuation (20.97x) compared to overvalued peers
• Pan-India presence with 700+ clients and growing repeat business
• Dual strategy of manufacturing + contract sourcing for scale flexibility
• Government clientele adds credibility and revenue visibility

Potential Risks:

• Revenue concentration in third-party products could pressure margins
• Heavy dependence on Indian and Chinese suppliers
• Small-scale operations compared to sector leaders

Listing Gain View:

Positive. The small issue size and attractive valuation make this IPO a strong candidate for listing gains, especially if investor interest spikes in the final days.

Long-Term View:

Constructive. With expansion plans, stable financials, and sector relevance, Prostarm has the potential to deliver steady compounding returns over the next 3–5 years. Its focus on “Make in India,” contract flexibility, and recurring AMC/service income position it well for long-term sustainability.

Verdict: A well-priced, growth-ready power solutions company that deserves a close look—not just for listing pop, but also for long-term portfolio inclusion.

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FAQs: Prostarm Info Systems IPO

What is the Prostarm Info Systems IPO date?

The IPO opens on May 27, 2025, and closes on May 29, 2025.

What is the IPO size and structure?

It is a ₹168 crore IPO, consisting entirely of a fresh issue of 1.6 crore shares.

What is Prostarm Info Systems’ business?

The company provides power backup and energy storage solutions like UPS, inverters, lithium-ion battery packs, and solar EPC contracts.

How are the company’s financials?

Prostarm is profitable, with FY24 revenue of ₹259.23 Cr, PAT of ₹22.8 Cr, and an RoNW of 32.09%. It has shown consistent year-on-year growth.

Is Prostarm IPO good for listing gains?

Yes, the small issue size, low P/E, and strong financials make it a likely candidate for listing gains.

What is the Prostarm IPO GMP?

GMP is yet to start, but a strong retail and HNI response is expected.

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