Prostarm Info Systems has filed DRHP for an IPO

Leading Indian power electronics manufacturer ProstarM is committed to providing power electronics solutions that are economical, dependable, clean, and suitable for Indian companies of all sizes and industries. We maintain regional sales offices in 20 states, a corporate office in Mumbai, a registered office in Pune, and a robust network of engineers spread throughout the nation’s major towns and cities. Our UPS solutions have been successfully implemented in a variety of industries over the past 16 years, including banking finance, and hospitals, where uninterrupted power supply is essential. Prolonged expansion in an intensely competitive industry is evidence of our accomplishment in providing Indian clients with top-notch technology at reasonable costs.

Prostarm Info Systems IPO:

In an effort to raise capital through an initial public offering (IPO), Prostarm Info Systems, a power solutions company based in Maharashtra, has filed a draft red herring prospectus (DRHP) to SEBI, the capital markets regulator. The IPO consists of the company issuing 1.6 crore equity shares in a completely new offering.

The manufacturer of energy storage and power conditioning equipment has three manufacturing facilities and is an approved vendor for the Airports Authority of India, Central Public Works Department, Patna Bihar; Public Works Department, New Delhi; West Bengal Public Health Engineering Department; West Bengal Electronic Industry Development Corporation; Telangana State Technology Services; Railtel Corporation of India; and NTPC Vidyut Vyapar and Nigam. Before initiating the public offering, the company may also consider issuing 10 lakh equity shares in a pre-IPO placement; if the company is successful in raising money through this avenue, the amount will be deducted from the new issue.

Prostarm Info Systems will utilize Rs 72.5 crore out of the net fresh issue proceeds for its working capital requirements and Rs 18 crore for repaying debt. Further, Rs 9 crore will be used for the acquisition of further stakes in the subsidiary to make it a wholly owned subsidiary, and the remaining funds will be used for inorganic growth and general corporate purposes. The Agarwal family-owned power electronics solutions compete with listed peers like Servotech Power System and Sungarner Energies. 

Financial performance of Prostarm Info Systems:

According to the reported prior years in the draft papers, the financial performance thus far has been strong. From Rs 19.3 crore in the previous year to Rs 22.8 crore in the fiscal 2024, the net profit increased by 18%. The year-end March 2024 saw a 29.8% increase in EBITDA (earnings before interest, tax, depreciation, and amortisation) to Rs 35.3 crore and a 190 basis point increase in margin to 13.7% from the previous fiscal year 2023. Meanwhile, revenue from operations increased by 12% to Rs 257.9 crore during the same period. All of the issue’s merchant bankers are Choice Capital Advisors.

Conclusion: Like other businesses, Prostarm Info Systems is also raising money through an initial public offering (IPO) to settle debt and use a portion of the proceeds as working capital for acquisition and other purposes.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions