Today marked an exciting milestone for Desco Infratech as its shares made a promising entrance on the BSE SME platform. The company’s stock opened at ₹160, reflecting a 6.67% increase from its initial offering price of ₹150. This anticipated debut follows a successful initial public offering (IPO) that opened for subscriptions on March 24 and closed on March 26, attracting considerable investor interest.
Desco Infratech IPO Highlights
The Desco Infratech IPO was priced within a range of ₹147 to ₹150 per equity share, with a face value of ₹10 each. Investors had the opportunity to place bids for a minimum of 1,000 shares, with increments also available in multiples of 1,000 shares. On the final day of bidding, the IPO saw a remarkable subscription rate of 83.75 times, underscoring strong demand.
Company Overview and Operations
Established in January 2011, Desco Infratech Limited is at the forefront of infrastructure development, specializing in Engineering, Planning, and Construction. The company’s expertise spans various sectors, including:
- City Gas Distribution (CGD)
- Renewable Energy
- Water Management
- Power Infrastructure
With operations extending to over 55 cities across 14 states, the company has successfully laid down more than 4,000 kilometers of Medium-Density Polyethylene (MDPE) pipelines and delivered over 200,000 piped natural gas connections to residential, industrial, and commercial clients. Desco Infratech also provides comprehensive infrastructure services, focusing on the design and construction of water distribution systems, open wells, sump wells, and overhead tanks.
Competitive Landscape
According to the Red Herring Prospectus (RHP), Desco Infratech faces competition from publicly listed companies like Rudra Gas Enterprise Ltd (P/E of 10.17) and Likhita Infrastructure Ltd (P/E of 15.72), highlighting the competitive nature of the industry.
Funding and Future Plans
The Desco Infratech IPO consists of a fresh issue of 20,50,000 equity shares, totaling approximately ₹30.75 crore. Notably, there is no Offer for Sale (OFS) component involved. Proceeds from this IPO are earmarked for crucial initiatives, including:
- Establishing a new corporate office in Surat, Gujarat
- Acquiring advanced machinery
- Meeting working capital needs
- Covering general corporate expenses
Smart Horizon Capital Advisors Private Limited is the lead manager for this IPO, while Bigshare Services Pvt Ltd acts as the registrar.
Grey Market Activity
As of today, the Grey Market Premium (GMP) for Desco Infratech stands at +5.5, indicating that shares are trading at a premium of ₹5.5 above the IPO price, according to investorgain.com. This suggests an estimated listing price of ₹155.5, which is 3.67% higher than the IPO price. However, recent trends in the grey market reveal a fluctuating GMP, with a minimum recorded at ₹0.00 and a peak at ₹20.00, signaling cautious optimism among investors.
In conclusion, with its strong market debut and promising infrastructure projects, Desco Infratech is poised for growth in an ever-evolving industry. For more insights, stay tuned for updates on upcoming IPOs and investment opportunities.
