Prostarm Info Systems shares expected to list at premium on June 3; experts recommend 'booking partial profits'

Prostarm Info Systems IPO was subscribed 97.20 times.

Shares of Prostarm Info Systems Ltd are expected to list at a premium on the exchanges on June 3, following strong investor demand for the company’s maiden public issue, analysts said.

The Rs 168-crore initial public offering (IPO) of the integrated power solutions firm Prostarm Info Systems was subscribed a robust 97.20 times at close on Thursday, supported by overwhelming interest from institutional investors. The issue comprised a fresh sale of 1.6 crore equity shares with a price band of Rs 95-105 apiece.

Analysts tracking the IPO said Prostarm’s fundamentals, combined with positive sectoral tailwinds and reasonable valuations, have driven demand. The company is expected to list at a premium of 12-16 percent over the issue price, according to market estimates.

"Prostarm is valued at 27.1 times its FY24 earnings at the upper price band," said Narendra Solanki, Head – Fundamental Research (Investment Services), Anand Rathi Wealth Ltd. "Post-issue, the company’s market capitalisation stands at around Rs 618 crore with a market cap-to-sales ratio of 2.4 based on FY24 revenues."

Solanki noted the company’s plans to expand its production capacity and focus on integrating automation technologies. "Investors may consider booking partial profits on listing or continue to hold for the long term, depending on their risk appetite," he said.

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Mahesh M. Ojha, AVP – Research and Business Development, Hensex Securities, echoed similar views. "Prostarm has evolved from a system installer into an integrated manufacturer of power conditioning and energy storage solutions. The company is reasonably valued at 14.72 times its annualised 9MFY25 earnings, and the growth outlook for the sector remains strong," he said.

According to Ojha, the uninterruptible power supply (UPS) market in India is projected to grow at a compound annual growth rate (CAGR) of 8.22 percent till FY30, while the lithium-ion battery market is expected to expand at a CAGR of 19.67 percent. "These trends align well with Prostarm’s product portfolio. Investors can expect moderate listing gains and may consider holding the stock for medium to long term," he added.

Prostarm Info Systems designs and manufactures a wide range of power solution products under the Prostarm brand, including UPS systems, inverter systems, lift inverter systems, solar hybrid inverter systems, lithium-ion battery packs, servo-controlled voltage stabilisers and isolation transformers. The company caters to diverse sectors such as healthcare, aviation, BFSI, defence, education, IT, and renewable energy.

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