Desco Infratech IPO: Rs 31 Crore Issue Opens on March 24 – Key Details
Desco Infratech IPO
Desco Infratech IPO: ₹31 Crore Issue Opens on March 24, Offering 20.5 Lakh New Shares – Everything You Need to Know
Desco Infratech, a prominent player in the infrastructure sector, is gearing up for its Initial Public Offering (IPO), which is set to open on March 24, 2025.
The company plans to raise approximately ₹30.75 crore through the issuance of 20.5 lakh new equity shares.
With the IPO closing on March 26, the final allotment will be announced by March 27, 2025. Investors can expect the shares to be listed on the BSE SME (Small and Medium Enterprises) platform on April 1, 2025.
The price band for the IPO has been set at ₹147-150 per share, with a minimum lot size of 1,000 shares.
This means investors will need to invest in multiples of 1,000 shares, with the total investment for one lot ranging from ₹1,47,000 to ₹1,50,000, depending on the final issue price.
The offering is expected to attract a wide range of investors, including qualified institutional buyers (QIBs), retail investors, and non-institutional investors, each of whom will have a dedicated portion of the issue reserved for them.
About Desco Infratech: Company Overview
Desco Infratech operates primarily in the infrastructure sector, with a special focus on engineering, planning, and construction services.
The company’s core competencies lie in providing solutions for city gas distribution, renewable energy, water, and power sectors.
With the increasing demand for infrastructure development and a growing push towards sustainable energy sources, Desco Infratech is well-positioned to capitalize on emerging opportunities in these sectors.
The company has a strong track record of successful projects, reflecting its ability to meet the diverse needs of its clients across multiple industries.
Desco Infratech aims to further expand its operations and strengthen its market position through the proceeds raised from this public offering.
The promoters of the company—Indiraben Pruthubhai Desai, Pankaj Pruthu Desai, Hina Pankaj Desai, Malhar P Desai, and Samarth Pankaj Desai—bring substantial experience and expertise in the infrastructure and engineering sectors. Their leadership has been a key factor in the company’s growth and success.
Key Highlights of the IPO
- Issue Size: ₹30.75 crore
- Shares Offered: 20.5 lakh new equity shares
- Issue Price: ₹147-150 per share
- Lot Size: 1,000 shares (minimum)
- Issue Dates: March 24, 2025, to March 26, 2025
- Listing: BSE SME (Small and Medium Enterprises) platform
- Expected Listing Date: April 1, 2025
The IPO will be open for a brief window of three days, from March 24 to March 26, so interested investors should act quickly to make their bids.
Utilization of IPO Proceeds
The funds raised through this IPO will be used for several critical purposes to support Desco Infratech’s growth strategy. The company intends to use the proceeds to:
- Establish a Corporate Office in Surat, Gujarat: A portion of the IPO funds will be utilized to set up a new corporate office in Surat, which is expected to serve as a hub for the company’s operations in the region. This will help Desco Infratech manage its increasing business needs and strengthen its presence in Gujarat, a key market for infrastructure development.
- Purchase of Machinery: Desco Infratech plans to allocate funds towards purchasing modern machinery and equipment, which will enhance its project execution capabilities. The acquisition of state-of-the-art machinery is essential for maintaining high-quality standards in construction and engineering services, which are critical for successful project completion.
- Working Capital Requirements: A portion of the IPO proceeds will be used to meet the company’s working capital needs. As the company expands its operations and takes on more projects, having sufficient working capital is vital for managing day-to-day business expenses, including labor costs, raw materials, and other operational expenditures.
- General Corporate Purposes: A small portion of the funds will be reserved for general corporate purposes, such as marketing, business development, and other initiatives aimed at enhancing the company’s long-term growth prospects.
IPO Reserved Portions
The Desco Infratech IPO has structured the offering with a clear division of the issue size for different categories of investors:
- 50% for Qualified Institutional Buyers (QIBs): QIBs, which include large institutional investors such as mutual funds, banks, and insurance companies, have been allocated 50% of the total issue size. This allocation reflects the company’s strategy of attracting institutional investors with substantial capital to support the long-term growth of the company.
- 35% for Retail Investors: A significant portion of the offering is reserved for retail investors, providing an opportunity for individual investors to participate in the IPO. Retail investors can bid for a minimum of one lot (1,000 shares) and are expected to be key participants in the offering.
- 15% for Non-Institutional Investors (NIIs): The remaining 15% of the offering is reserved for non-institutional investors, which includes high-net-worth individuals (HNIs) and others who are not classified as QIBs or retail investors.
The structure of the offering is designed to ensure broad-based participation from different types of investors, helping to generate strong demand for the shares.
Financial Performance
Desco Infratech has shown consistent growth in its financial performance, reflecting the strength and stability of its business operations.
The company’s revenue for the financial year 2024 stood at ₹29.49 crore, which is slightly higher than the ₹29.28 crore recorded in FY 2023. Despite the steady revenue, the company’s profitability has shown a significant improvement.
In FY 2024, Desco Infratech reported a net profit of ₹3.46 crore, a remarkable increase from ₹1.23 crore in FY 2023.
This increase in profit indicates the company’s ability to improve its operational efficiency and execute profitable projects.
For the half-year period from April to September 2024, the company recorded a revenue of ₹22.75 crore and a net profit of ₹3.38 crore.
The company’s borrowings at the end of this period stood at ₹6.82 crore, which is relatively manageable given the overall size of its operations.
Final Remarks
Desco Infratech’s IPO presents an attractive investment opportunity for both retail and institutional investors.
With its strong track record in infrastructure development, diverse portfolio in high-growth sectors, and a clear plan for utilizing the IPO proceeds, the company is poised for continued growth in the coming years.
The issue is structured to allow for broad investor participation, with substantial portions of the offering reserved for both retail and institutional buyers.
As Desco Infratech prepares for its market debut, investors should carefully evaluate the company’s financial performance, growth prospects, and sectoral opportunities.
Given the company’s robust business model and solid financial foundation, this IPO could be a strong contender for those seeking exposure to the infrastructure sector.
Investors interested in the offering should ensure they place their bids within the IPO window from March 24 to March 26 and stay updated on the allotment and listing details as the company heads toward its BSE SME listing on April 1, 2025.
