Prostarm Info Systems share price: The listing premium is higher than the grey market estimates. Ahead of listing, the unlisted shares of the company were trading with a GMP of 11.43% over the IPO price at Rs 117 apiece.

The shares of Prostarm Info Systems were listed on BSE at Rs 125 apiece on June 3. This marks a premium of 19.05 percent over the IPO price of Rs 105 apiece.  The company debuted with a market capitalization of over Rs 707 crore.

On NSE, the shares of the inverter-maker were listed at Rs 120 apiece, marking a premium of 14.29 percent over the IPO price.

Notably, the listing premium is slightly higher than the grey market estimates. Ahead of listing, the unlisted shares of the company were trading with a grey market premium (GMP) of 11.43 percent over the IPO price at Rs 117 apiece, according to data on Investorgain.

The Rs 168-crore IPO of Prostarm Info Systems was subscribed over 97 times from May 27 to May 29. The public issue of the Maharashtra-based power solution products-maker received bids for nearly 109 crore shares, as against the offer size of 1.12 crore shares, according to NSE data. Non Institutional Investors (NII) showed the most interest in the issue, subscribing their reserved portion by a whopping 222 times. Qualified Institutional Buyers (QIBs) followed, subscribing the portion kept for them over 104 times. Retail investors meanwhile subscribed their reserved portion around 39.5 times.

The inverter-maker's IPO entirely comprised a fresh issue of 1.6 crore equity shares at a price band of Rs 95-105 per share. Investors could 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.

Should you buy, sell or hold?

Analysts had expected Prostarm Info Systems to debut at a premium over IPO price, following the strong investor demand. The market experts noted that the company's fundamentals, combined with positive sectoral tailwinds and reasonable valuations, have driven demand.

"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.

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.

Bajaj Broking earlier had advised investors to subscribe to the issue for the 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 the long term," the brokerage said.

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

Anchor Book:

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

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

Choice Capital Advisors was the book-running lead manager to Prostarm Info Systems' IPO.