Desco Infratech IPO | Should You Invest in The IPO or Not?

Desco Infratech IPO is a book-built issue of ₹ 30.75 crores. It is a BSE SME IPO consisting entirely of a fresh issue of 20,50,000 shares. Desco Infratech IPO will open for subscription on 24th March 2025, and will close on 26th March 2025. 

The tentative listing date for the Desco Infratech IPO is set on 1st April 2025, with the tentative allotment date of 27th March 2025. Investors can expect refund initiation (if any) and credit of allotted shares in demat accounts on 28th March 2025. 

The price band for the Desco Infratech IPO is set with a floor price of ₹ 147 and a cap price of ₹ 150 per equity share. The minimum lot size for the IPO is 1000 shares aggregating to a minimum investment for the retail segment at ₹ 1,47,000 (floor price * lot size). Whereas on the cutoff price of ₹ 150, the minimum investment would be ₹ 1,50,000. The HNI segment has the minimum lot size of 2 lots (2000 shares) for the Desco Infratech IPO.

The book running lead manager for the public offer of Desco Infratech Limited is Smart Horizon Capital Advisors Private Limited and the registrar is Bigshare Services Pvt Ltd. The market maker for Desco Infratech IPO is Rikhav Securities Limited. 

Desco Infratech IPO Key Information 

Desco Infratech IPO Key Dates

Desco Infratech IPO Lot Size Structure

Desco Infratech IPO Reservation Structure

Desco Infratech IPO is a BSE SME IPO, likely to be listed on the Indian stock exchanges on 28th March 2025. This issue consists of a reservation portion for the qualified institutional buyers (QIB), retail investors and non-institutional buyers (NIB). To know more about the reservation requirements of the Desco Infratech IPO refer to the table below.

Desco Infratech IPO GMP (Grey Market Premium)

Desco Infratech IPO GMP: Grey Market Premium (GMP) refers to the price of an IPO trailing in the grey markets. It represents the difference between the issue price and the grey market price of an IPO.

Desco Infratech IPO GMP Trend

The Desco Infratech IPO GMP of ₹ 20 on 24st Mach 2025 indicates that the IPO is gaining significant interest in the grey market which can lead to a premium listing for Desco Infratech IPO on 01st April 2025. The recently updated GMP of Desco Infratech IPO of ₹ 20 indicates an expected listing price of ₹ 170 with the estimated listing gains of 13.33 %. To stay updated with more upcoming IPOs keep reading Univest Blogs.

Desco Infratech IPO Subscription Status 

Desco Infratech IPO was subscribed 0.01 times as on 24th March 2025. The issue was subscribed 0.02 times by the retail category, followed by NII and QIB category at 0 times of the issue.

*(QIB – Qualified Institutional Buyers, NII – Non Institutional Buyers)

Desco Infratech IPO Objectives 

Desco Infratech IPO is being issued with a price band of ₹ 147 to ₹ 150 at a total IPO size of 30.75 crores. Desco Infratech Limited intends to use the net issue proceeds from the IPO for the following objectives: 

1. Funding of capital expenditure requirements
2. Funding of working capital requirements
3. General corporate purposes

The net issue proceeds (Gross issue proceeds – issue  expenses) from the Desco Infratech IPO will be used for the fulfilment of the objectives mentioned above in the following manner: 

(figures in ₹ lakhs)

*the amount to be utilised for gross proceeds should not exceed 25% of the gross proceeds.

^to be updated in the prospectus prior to the filling with ROC

Desco Infratech IPO Peer Comparison

(Figures in Lakhs except ratios and percentages)

Risks and Strengths in Desco Imfratech IPO 

Strengths 

• Extensive experience in city gas distribution and O&M services. 
• Direct relationship with suppliers. 
• Robust standard operating procedures (SOPs). 
• Increasing PAT and revenue since FY 22. 
• Diversified business across gas distribution, water projects and (O&M) services. 

Risks

• Desco Infratech Limited has some pending litigation cases. 
• High reliance on some key customers for a major portion of revenue.  
• Revenues are subject to seasonal variations. 
• The company has experienced negative cashflow in past years. 

About Desco Infratech Limited

Desco Infratech Limited was originally incorporated as a private limited company on 19th January 2011. Further the company was converted to a public limited company after an extraordinary general meeting held on 1st June 2024. 

Desco Infratech Limited is engaged in the business of infra and maintenance services to city gas distribution division in India. The company’s business involves laying of pipelines, installation, testing, erection and commissioning for Piped Natural Gas. Desco Infratech Limited is also involved in the operation and maintenance services (O&M Services). Under the operations and maintenance services it conducts lock pressure and leak detection tests on MDPE pipes. 

Desco Infratech Limited has also started providing services in the power division. Under this segment it focuses on installing, connecting, commissioning and erecting Low Tension and High Tension cables. It further forayed into the water distribution projects offering infra services such as designing and constructing water distribution networks, overhead tanks, sump wells and well systems. 

Desco Infratech Limited Performance Review 

Before investing in a company, it is crucial to analyse its financial health through technical and financial statement analysis. It helps in understanding the profit growth, cash flow, and other risks and strengths for the underlying company. Therefore, to make informed decisions regarding the Desco Infratech IPO, you must take a look at the below financials of the company:

Financial Performance

*Figures in lakhs except percentages

Explanation

Revenue 

Desco Infratech Limited has maintained a decent growth rate in their revenue figures during the period starting from FY 2022 till FY 2024. In the year FY 2022 the company earned a top line of ₹ 1,985.19 lakhs which grew by 47.20% to ₹ 2,922.21 lakhs in FY 2023. In FY 2024 the revenue of Desco Infratech Limited was ₹ 2,939.31 lakhs which was higher than the revenue of FY 2023 by 0.58%.

EBITDA

The Earning Before Interest Tax Depreciation and Amortisation (EBITDA) of Desco Infratech Limited has seen a similar trend like its revenue for the period from FY 2022 to FY 2024. The company’s EBITDA in FY 2022 stood at ₹ 165.77 lakhs whereas in the next fiscal year it was ₹ 219.32 lakhs indicating a growth of 31.30 %. As for the FY 2024 Desco Infratech Limited clocked an EBITDA of ₹ 555.90 lakhs. 

Technical Analysis (KPIs)

D/E – Debt to Equity

ROE – Return on Equity 

P/BV – Price to Book Value

RONW – Return on Net Worth 

ROCE – Return on Capital Employed 

Please note that the Price-To-Earning (PE) and Earning Per Share (EPS) ratio is subject to change after the Desco Infratech IPO listing. Therefore, have a look at the below table that provides pre and post IPO value of PE and EPS of Desco Infratech IPO. 

How To Invest in Desco Infratech IPO

To apply for the Desco Infratech IPO, you simply need to follow the below steps: 

Step 1 – Research the risks, benefits, and key details of the public offer. 

Step 2 – Open a demat account with Univest to know more about the Desco Infratech IPO and invest in it. If you have an old demat account, you can also use it to invest in the public offer. 

Step 3 – To invest in the Desco Infratech IPO as a retail investor, you must place a bid for 1,000 shares for a total amount of ₹ 1,50,000 lakh.

Step 4 – Once the bidding process is completed, you will receive a request for payment initiation using your chosen investment method. Approve the payment request and stay updated with the allotment status for the Desco Infratech IPO.

Snapshot Of Desco Infratech IPO 

• The Desco Infratech IPO is a book-built issue consisting of 20,50,000 equity shares amounting to a total size of 30.75 crores. 
• The price band for the IPO is set between the floor price of ₹ 147 and cap price of ₹ 150. 
• The Desco Infratech IPO consists entirely of a fresh issue component of 20,50,00 shares. 
• The minimum lot size of the Desco Infratech IPO for retail investors is set at 1,000 shares (1 lot) and for the HNI segment it is 2,000 equity shares (2 lot). 

FAQ on Desco Infratech IPO

What is the Desco Infratech IPO price? 

The price of Desco Infratech IPO is set at a price band of ₹ 147 to ₹ 150.

What is the retail lot size in the Desco Infratech IPO? 

The minimum lot size of the retail segment for the Desco Infratech IPO is set at 1,000 shares which amounts to a total of ₹ 1,50,000 per lot. 

How can I check the Desco Infratech IPO allotment status? 

You can check the Desco Infratech IPO allotment status on the official website of the Bombay Stock Exchange (BSE).

What is the Desco Infratech IPO?

Desco Infratech IPO is a book-built offer for 20,50,00 fresh issue shares. Investors can subscribe to the Desco Infratech IPO through a bidding process which will commence on 24th March 2025. 

Note: Univest do not recommend you to invest in the Desco Infratech IPO based on the information provided in the above blog. Before investing in the public offer perform your own research and invest according to your risk tolerance levels. 

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Disclaimer: This is for general information and education purposes only. The Securities quoted (if any) are for illustration only and are not recommendatory. Past performance does not guarantee any future returns. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.