Prostarm Info Systems IPO

• Diversified and Continuously Expanding Product Portfolio

Prostarm Info Systems Limited offers a diverse and evolving product range, catering to industries such as healthcare, aviation, BFSI, defence, IT, and renewable energy. With standardized and customized solutions, it meets varied power storage and conditioning needs. Continuous product upgrades and cross-selling strategies strengthen customer retention, driving expansion across multiple industry segments.

• Strong Customer Relationships and Expanding Client Base

Prostarm Info Systems Limited has built lasting relationships with domestic clients across multiple industries. With over 15 years of experience, it serves PSU banks, Tata Power, L&T, and Bajaj Finance, among others. A significant portion of revenue comes from long-term customers, highlighting strong retention. A customer-centric approach and after-sales support drive continued growth.

• Extensive Geographical Reach and Strong Distribution Network

Prostarm Info Systems Limited operates across 17 states and one union territory in India, supported by 22 branch offices and two storage facilities. A robust distribution network of 478 dealers and distributors enhances product availability and after-sales services. In Fiscal 2024, dealer sales contributed ₹8,204.10 lakhs, accounting for 31.81% of total revenue. This widespread presence ensures rapid market expansion and a competitive edge.

• Strong Financial Performance and Robust Balance Sheet

Prostarm Info Systems Limited has demonstrated steady financial growth, driven by efficiency improvements and cost optimization. Revenue from operations grew at a CAGR of 22.69%, reaching ₹25,787.04 lakhs in Fiscal 2024. EBITDA rose to ₹3,662.35 lakhs, and profit after tax increased to ₹2,282.53 lakhs. The company outperformed peers in EBITDA, PAT margin, return on assets (11.2%), return on equity (26.6%), and return on capital employed (36.3%) in Fiscal 2024. A disciplined financial approach enables continued expansion and strengthens its position in the power solutions sector.

• Experienced Leadership and Committed Workforce

Prostarm Info Systems Limited thrives under experienced leadership, with Promoters boasting 16+ years in power solutions. A skilled senior management team drives strategy, client relations, and market expansion. Prioritizing workforce development, the company employs 222 permanent and 189 contractual staff, ensuring agility and expertise to sustain growth and capitalize on future opportunities.

More About Prostarm Info Systems Limited

Prostarm Info Systems Limited is engaged in designing, manufacturing, assembling, selling, servicing, and supplying Energy Storage Equipment and Power Conditioning Equipment in India. The company provides both customized and standard power solutions through in-house manufacturing and third-party contract manufacturers.

Product Offerings

Manufactured Power Solutions:

• UPS systems

• Inverter systems

• Lift inverter systems

• Solar hybrid inverter systems

• Lithium-ion battery packs

• Servo-controlled voltage stabilizers (SCVS)

• Isolation transformers

• Other power solution products

Additional Services:

• Sale and supply of third-party manufactured batteries

• Reverse logistics and end-of-life disposal for UPS systems and batteries

• Rooftop solar photovoltaic (PV) power plant projects on an EPC basis

• Installation, rental, and after-sales services

• Annual Maintenance Contracts (AMC) including warranty and post-warranty services

Industry Presence

Prostarm has built a reputation for providing reliable and affordable power electronics solutions to businesses across various sectors, ensuring continuous power availability in critical industries such as:

• Banking and Finance (BFSI)

• Healthcare

• Aviation

• Research and Education

• Railways and Defense

• Security and Information Technology

• Renewable Energy and Oil & Gas

Government Empanelment

Prostarm is an approved vendor for multiple government agencies, including:

• Airports Authority of India

• Central Public Works Department, Patna Bihar

• Public Works Department, New Delhi

• West Bengal Public Health Engineering Department

• Telangana State Technology Services Limited

• Railtel Corporation of India Limited

• NTPC Vidyut Vyapar Nigam Limited

Business Growth and Expansion

2008: Incorporated and began operations with the sale and installation of third-party power products.

Post-2008: Expanded into in-house manufacturing, ensuring high-quality standards and the ability to deliver customized solutions.

2018 Onwards: Entered the EPC segment to cater to the rising demand for renewable energy solutions, focusing on rooftop solar PV power systems. To date, Prostarm has successfully commissioned 7.35 MW of rooftop solar PV power plants across 100+ sites.

Market Reach

With a pan-India sales and service network, Prostarm serves a diverse clientele, including government agencies, private institutions, and corporate customers. The company’s strategic approach in power solutions and renewable energy positions it as a trusted industry leader

Industry Outlook

Rising Demand for Power Backup Systems

The power backup systems market in India is expanding rapidly due to frequent power shortages and technological advancements. The increasing gap between power demand and supply is driving the need for uninterrupted power solutions, particularly in industrial sectors.

Market Performance and Growth Trends

Indian UPS Market

• The Indian UPS market generated revenues of ₹96,432 million in FY24, up from ₹89,713 million in FY23.

• The market is projected to grow at a CAGR of 8.22% till FY30.

• Growth drivers include:

• Increasing reliance on electricity.

• Expanding commercial and industrial sectors.

• Frequent power outages, especially during peak hours.

Solar Hybrid Inverter Market

• The market was valued at ₹5,242 million in FY24, with a CAGR of 9.21% between FY19 and FY24.

• Expected to reach ₹13,938 million by FY30, growing at 18.60% CAGR.

• The surge in demand is driven by India’s transition towards renewable energy to improve energy security and reduce dependence on fossil fuels.
  (Source: CARE Report)

India Lift Inverter Market

• Valued at ₹164,292.82 million in FY24.

• Projected to grow at a CAGR of 8.28%.

Servo Stabilizer Market

• Reached ₹13,455 million in FY24.

• Expected to reach ₹23,137 million by FY30, growing at a CAGR of 9.46%.

• Growth factors include:

• Rising demand from end-user industries.

• Increased R&D investments in new products and equipment.

Isolation Transformers Market (Non-Distribution Transformers)

• Valued at ₹15,843 million in FY24, up from ₹13,357 million in FY19.

• Expected to grow at a CAGR of 7.3% from FY25 to FY30.

Solar EPC Market

• Recorded at ₹135,464 million in FY24, with a CAGR of 4.97% between FY19 and FY24.

• Expected to reach ₹2,22,112 million by FY30.

• Key growth factors:

• Expansion of solar parks across various states.

• Increased demand for rooftop solar systems.

• Integration of energy storage solutions to enhance grid stability.

Indian Lithium-Ion Battery Market

• Valued at ₹5,58,078 million in FY24, with a CAGR of 7.66% between FY19 and FY24.

• Expected to grow at a CAGR of 19.67% till FY30, reaching ₹16,39,090 million.

• Market growth is driven by:

• Rising demand for energy storage in automotive, consumer electronics, and renewable energy sectors

How Will Prostarm Info Systems Limited Benefit

• Expanding UPS Market: Prostarm can capitalise on the growing ₹96,432 million UPS market by offering advanced solutions to industrial and commercial sectors experiencing frequent power outages.

• Solar Hybrid Inverter Demand: With the market projected to grow at 18.60% CAGR, Prostarm can leverage its solar hybrid inverters to support India’s renewable energy transition and increased solar adoption.

• Growing Lift Inverter Market: As the lift inverter market grows at 8.28% CAGR, Prostarm’sexpertise in lift inverters positions it to meet rising demand from high-rise buildings and commercial complexes.

• Rising Need for Servo Stabilizers: With demand expected to reach ₹23,137 million by FY30, Prostarm’s servo-controlled voltage stabilizers can serve industrial sectors requiring voltage regulation for operational efficiency.

• Isolation Transformer Expansion: The ₹15,843 million isolation transformer market offers Prostarm growth opportunities by providing critical power conditioning solutions to industries and commercial sectors.

• Solar EPC Market Growth: Prostarm can expand its EPC solar projects, benefiting from increased rooftop solar installations and grid stability solutions, projected to reach ₹2,22,112 million by FY30.

• Booming Lithium-Ion Battery Market: With an expected market size of ₹16,39,090 million, Prostarm’s lithium-ion battery packs can cater to energy storage needs in automotive, electronics, and renewable energy sectors.

Peer Group Comparison

Name of the Company	Revenue (₹ in lakhs)	Face Value (₹)	P/E	EPS (Basic) (₹)	RoNW (%)	NAV (₹)
Prostarm Info Systems Limited	25,787.04	10	[●]	5.44	32.12	19.67
Peer Group
Servotech Power System Limited	35,368.35	1	314.55	0.54	10.50	6.54
Sungarner Energies Limited	1,768.92	10	152.68	5.22	16.78	41.32

Key Insights

• Revenue: Prostarm Info Systems Limited reported revenue of ₹25,787.04 lakh, positioning it between its peers. Servotech Power System Limited leads with ₹35,368.35 lakh, indicating a stronger market presence, while Sungarner Energies Limited lags significantly at ₹1,768.92 lakh.

• Face Value of Equity Shares: Both Prostarm and Sungarner have a face value of ₹10 per share, offering uniformity in valuation. However, Servotech’s lower face value of ₹1 suggests a different capital structure, potentially influencing investor perception and trading liquidity.

• Price-to-Earnings (P/E) Ratio: Servotech has an extremely high P/E ratio of 314.55, indicating an overvaluation or high growth expectations. Sungarner’s P/E stands at 152.68, still considerably high. Prostarm’s P/E remains undisclosed, but its financials suggest a more balanced valuation compared to its peers.

• Earnings Per Share (EPS): Prostarm’s EPS of ₹5.44 is slightly higher than Sungarner’s ₹5.22, indicating better profitability per share. Servotech’s EPS is significantly lower at ₹0.54, suggesting lower earnings generation relative to its stock price.

• Return on Net Worth (RoNW): Prostarm leads with a strong RoNW of 32.12%, reflecting high profitability and efficient capital utilization. Sungarner follows with 16.78%, while Servotech lags at 10.50%, indicating weaker returns on shareholder equity.

• Net Asset Value (NAV): Sungarner has the highest NAV per share at ₹41.32, reflecting strong asset backing. Prostarm follows with ₹19.67, suggesting decent financial stability. Servotech’s NAV of ₹6.54 is the lowest, indicating a lower asset base per share.

Objectives of the IPO Proceeds

The Net Proceeds are intended to be utilised as per the details provided in the table below:

Particulars	Amount (in ₹ lakhs)
Funding working capiital requirements	7250
Acquisition of further stake of our Subsidiary to make it a wholly owned subsidiary	900
Pre-payment/ re-payment, in part or full, of certain outstanding borrowings availed by the Company	1800
Achieving inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes	[●]

Note: *To be determined upon finalisation of the Offer Price and updated in the Prospectus prior to filing with the RoC

Prostarm Info Systems Limited Financials (in lakhs)

Particulars	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets	20,304.50	15,538.67	9803.08
Revenue	25,787.04	23,036.32	17,130.73
Profit After Tax	2282.53	1934.55	1087.05
Reserves and Surplus	4145.53	1813.21	3187.41
Total Borrowings	4346.96	2485.15	320.94
Total Liabilities	11,707.68	9221.94	5427.34

Key Strategies for Prostarm Info Systems Limited

• Expansion Through Growth Strategies

Prostarm Info Systems Limited has expanded from third-party sales to in-house manufacturing, operating three units in Maharashtra. Through R&D, technology acquisitions, and increased production capabilities, it aims to enhance efficiency, reduce dependency, and strengthen its market position.

• Expanding Customer Base and Market Reach

Prostarm Info Systems Limited focuses on domestic growth through strategic acquisitions, product innovation, and service expansion. It aims to enter international markets, enhance after-sales services, and strengthen brand recognition through digital marketing, exhibitions, and distributor engagement.

• Optimizing Working Capital and Reducing Debt

Prostarm Info Systems Limited aims to shorten its working capital cycle through improved inventory management and faster client payments. It plans to rationalize borrowings by using proceeds to reduce debt, lower financing costs, and enhance the debt-to-equity ratio.

• Enhancing Operational Efficiency

Prostarm Info Systems Limited aims to optimize manufacturing processes, reduce costs, and drive innovation while maintaining product quality. It plans to acquire full ownership of its subsidiary and strengthen R&D capabilities to improve efficiency, product development, and long-term growth.