Prostarm Info Systems IPO subscribed 3.5x on Day 1; NII portion booked 7x: Check latest GMP

Prostarm Info Systems

The Rs 168-crore IPO of Prostarm Info Systems has been subscribed 3.54 times its offer size on its first day of public bidding (May 27). The public issue of the Maharashtra-based power solution products maker received bids for nearly 3.97 crore shares, as against the offer size of 1.12 crore share.

Non Institutional Investors (NII) took the lead in the subscription rally, by booking their reserved portion 6.82 times. Retail investors closely followed, subscribing the portion kept for them nearly 4.14 times. The IPO however has so far seen muted response from Qualified Institutional Buyers (QIBs), who have booked nearly 5 percent of their reserved portion.

The inverter-maker’s IPO entirely comprises a fresh issue of 1.6 crore equity shares at a price band of Rs 95-105 per share. The issue will remain open for public bidding between May 27 to May 29. Investors can apply for a minimum of 142 shares, with a minimum investment of Rs 14,910, and in multiples thereafter.

The company intends to utilise IPO proceeds for working capital requirements, repayment of debt, and inorganic growth through unidentified acquisitions.

Prostarm Info Systems GMP:

Ahead of their listing, the unlisted shares of the company were trading at Rs 130 apiece in the grey market, according to Investorgain. This implies a grey market premium (GMP) of 23.81 percent (Rs 25) over the IPO price of Rs 105 apiece.

According to IPO Watch, the unlisted shares of the company were trading with a grey market premium of Rs 27 over the IPO price at Rs 132 apiece.

Should you apply?

Gaurav Garg from Lemonn Markets Desk advised investors to subscribe to the IPO with a medium to long-term investment horizon, citing promising industry outlook, well-established operations, and reasonable pricing. "The company is well-poised to benefit from structural tailwinds in energy storage and green energy solutions, backed by solid execution and a growing customer base," he said.

"The company combines a strong financial track record, scalable business model, diversified offerings, and robust return ratios with a valuation that appears attractive relative to peers," Garg further said.

Bajaj Broking meanwhile advised investors to subscribe to the public issue for long term. "The sudden boost in its bottom lines from FY23 onward is on account of its ability to provide all related services under one roof. Based on its financial data, the IPO appears fully priced. Investors may lap it up for long term," the brokerage said.

Anchor Book:

The UPS and inverter maker raised Rs 50.4 crore via anchor book on May 26, a day before the IPO opening. Prostarm Info Systems in its filing to exchanges said it has finalised allocation of 48 lakh equity shares to anchor investors at a price of Rs 105 per equity share.

Chattisgarh Investment, Astrone Capital, Steptrade Revolution Fund, Abundantia Capital, and Swyom India Alpha Fund were amongst eight institutional investors participated in the anchor book.

Choice Capital Advisors is acting as the book running lead manager to Prostarm Info Systems IPO.

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