Pace Digitek Limited IPO

29 Sep 2025 , 11:06 AM

Pace Digitek Limited is a Bengaluru-based company operating across three core verticals: telecommunications infrastructure, power-generation and renewable-energy solutions, and information-communication-technology (ICT) services. It provides end-to-end engineering, procurement, construction, and operation-and-maintenance (EPC-O&M) services for telecom towers, solar-plus-storage projects, and hybrid power-management systems. In addition to its nationwide presence, the company also undertakes projects in neighboring countries.

Offer Details of the IPO

• Total Offer Size –INR 819.15 crore. The issue comprises a fresh issue of equity shares worth up to INR 819.15 crore, with no offer for sale.
• Usage of Proceeds: The bulk of the net proceeds will be invested in Pace Renewable Energies Private Ltd, the Company’s subsidiary, to set up Battery Energy Storage Systems (BESS) for the project awarded by the Maharashtra State Electricity Distribution Company Limited (MSEDCL).

Price Band: INR 208 to INR 219 per Equity Share

Book‑Running Lead Manager (BRLM)

• Unistone Capital Private Limited

Indian Telecom & Renewable Energy Sector – An Overview

India’s tele‑infrastructure & clean‑energy ecosystem is the backbone of the company’s three business verticals (Telecom, Energy and ICT).  The ecosystem can be split into four closely‑linked segments:

Table: Key segments

Segment	Core Activities	Key Drivers
Telecom‑tower & passive infrastructure	Design, manufacture and supply of power‑management equipment, tower‑erection, O&M, and turnkey tower‑plus‑OFC projects.	• Massive 4G/5G roll‑out and spectrum‑auction spending (≈ ₹ 1.5 trn in 2022). • Government‑mandated “fibre-to-the-tower” and green‑tower programmes. • High‑capex nature of tower assets (capex ≈ 30 % of revenue).
Optical‑Fibre‑Cable (OFC) EPC	Laying, splicing, trenching, aerial deployment and network‑integration of fibre for mobile, broadband, smart‑city, defence and rail applications.	• Digital‑India, Bharat‑Net and FTTH targets. • 5G data‑traffic surge demanding back‑haul capacity.
Solar & Renewable‑Energy Projects	EPC of solar PV plants, solar‑isation of telecom towers, rural electrification, and build‑‑own‑‑operate (BOO) solar assets.	• Government incentives (DDUGJY, Saubhagya, RDSS). • Declining PV‑module cost and higher‑efficiency panels.
Battery‑Energy‑Storage‑Systems (BESS) & Li‑ion Batteries	Manufacture of containerised BESS, large‑format Li‑ion racks, power‑conversion‑systems (PCS) and energy‑management‑software (EMS); turnkey storage projects coupled with solar or stand‑alone.	• NEP‑2023 & PLI schemes for storage. • Rapid renewable‑capacity addition (target ≈ 50 % of total generation by 2029). • Growing need for grid stability and off‑grid power.

Source: RHP

Table: Growth‑Rate Snapshot

Segment	Historical CAGR (FY 2020‑24)	Projected CAGR (FY 2024‑28)	Comment
Telecom‑tower maintenance & passive infra (cumulative market size)	≈ 15.6 % (₹ 1.65‑1.70 trn)	≈ 10‑10.5 % (₹ 2.00‑2.10 trn)	Growth is moderating as tower additions slow, but the market remains large because of ongoing O&M spend and green‑tower upgrades.
Optical‑Fibre‑Cable EPC	≈ 12.5‑13.5 % (₹ 84 bn in FY 2024)	≈ 12.5‑13.5 % (₹ 135‑140 bn by FY 2028)	Strong demand from 5G back‑haul, Bharat‑Net and smart‑city projects sustains a double‑digit expansion.
Solar‑PV capacity addition (national)	≈ 55‑60 GW added FY 2019‑24 (≈ 10 % YoY)	≈ 137‑142 GW expected FY 2025‑29 (≈ 18‑20 % YoY)	Policy push, falling module cost and corporate‑PPAs accelerate capacity growth; the segment will more than double in the next five years.
BESS market (India)	≈ 20‑22 % (₹ 8‑9 bn in FY 2022)	≈ 25‑27 % (₹ 20‑22 bn by FY 2028)	Storage is becoming a prerequisite for renewable integration; the NEP‑2023 targets and PLI incentives drive a steep upward trajectory.
Li‑ion battery systems (for telecom & utility)	≈ 18 % (₹ 3.5 bn in FY 2023)	≈ 22‑24 % (₹ 7‑8 bn by FY 2027)	Telecom‑tower solarisation and EV‑charging infrastructure boost demand for high‑efficiency, long‑life cells.

Source: RHP

All four segments are projected to stay in double‑digit growth territory through FY 2028, with the solar‑PV and BESS sub‑segments showing the highest acceleration. This macro‑trend underpins the company’s strategic shift from a pure telecom‑equipment manufacturer to an integrated, solutions provider.

Pace Digitek Limited – Company Overview

Pace Digitek Limited was founded in 2007 as Pace Power Systems Private Limited in Bengaluru, Karnataka. Founding family owns ~85% of the company and holds the key managerial positions.

Core Business & Operating Segments

• Telecom – EPC and O&M of telecom towers, optical‑fibre deployment, and turnkey solutions. Geographic footprint: India (Maharashtra, Gujarat, Karnataka, Andhra Pradesh, Jammu & Kashmir, Uttarakhand, Northeast states).
• Energy – Solar PV and Battery Energy Storage Systems (BESS), renewable‑energy EPC, and power‑plant operation & maintenance. Geographic footprint: India, Myanmar, and select African markets.
• Other / ICT – Digital‑infrastructure services, hybrid solutions, and remote‑monitoring platforms. Geographic footprint: India.

Competitive Positioning

Strengths

• Diversified Verticals – Presence in telecom, renewable energy, and ICT offers cross‑selling opportunities and reduces dependence on a single market.
• Geographic Spread – Operations across more than 15 Indian states, along with projects in Myanmar and Africa, providing exposure to emerging-market growth.
• Strong Government-Client Base – Contracts with BSNL, Tamil Nadu Fibernet, PVVNL, ITI Limited, etc., which are typically long-term and credit-worthy.
• Integrated EPC & O&M Capabilities – Ability to design, build, commission, and maintain infrastructure under one roof, enhancing margins and client retention.
• Experienced Founding Team – Long-standing leadership by the Maddisetty family with deep industry contacts and proven project execution track record.

Weaknesses

• Customer Concentration – A single external client contributed over ₹ 20 bn in FY 2024; loss of this contract could materially impact revenue.
• Capital-Intensive Business – Large borrowings, lease liabilities, and pledged inventory may create cash-flow pressure if project delays occur.
• Regulatory & Execution Risk – EPC contracts are subject to change orders, liquidated damages, and government approvals; adverse changes can erode margins.

Financial Profile

Robust Revenue Growth: Pace Digitek witnessed a revenue CAGR of ≈120% over FY 2023–25, driven by new telecom and renewable-energy contracts, one-off related-party sales, and a few large external clients. While the FY 2024 surge was exceptional (+383.8% YoY) on a large public sector deal, FY 2025 growth was largely flat (+0.2% YoY) as the previous year’s pipeline was absorbed, reflecting stabilisation on a higher base.

Better Profitability: PAT margin expanded from roughly 5% in FY 2024 to about 6% in FY 2025, with EBITDA margins were above 15%. The effective tax rate remained near 25%, supporting PAT growth relative to pre-tax profit.

Table: Peers Comparison

Name of the Company	Revenue from operations (₹ in Millions)	Basic EPS (₹)	Diluted EPS (₹)	P/E	NAV per Equity Share (₹)
Pace Digitek Limited	24,387.80	16.30	16.30	13.44	71.24
HFCL Limited	40,645.20	1.23	1.23	60.07	28.28
Exicom Tele-Systems Limited	8,676.06	(9.11)	(9.11)	NA	64.35
Bondada Engineering Limited	15,713.77	10.33	10.28	37.76	41.24

Source: RHP

Table: KPI Comparison

Company	Particulars (Unit)	FY 2023	FY 2024	FY 2025	CAGR
Pace Digitek Limited	Revenue from operations (₹ mn)	5,031.96	24,344.89	24,387.80	123%
	Total Income (₹ mn)	5,146.59	24,602.66	24,622.02	–
	EBITDA (₹ mn)	397.48	4,237.45	5,051.28	296%
	EBITDA Margin (%)	7.90%	17.41%	20.71%	–
	Profit after Tax (₹ mn)	165.33	2,298.71	2,791.02	435%
	PAT Margin (%)	3.29%	9.44%	11.44%	–
	EPS (₹)	0.95	14.63	16.30	–
	Return on Equity (%)	4.93%	40.53%	23.09%	–
	Debt to Equity (in times)	0.57	0.87	0.13	–
	Interest Coverage (in times)	2.84	3.74	4.33	–
	ROCE (%)	6.99%	40.85%	37.89%	–
	Current Ratio (in times)	1.45	1.25	1.72	–
	Net Capital Turnover (in times)	2.43	6.03	2.52	–
	NAV / Book Value (₹)	21.22	35.97	71.24	–
	Return on Net Worth (%)	4.49%	40.67%	22.87%	–
	Telecom towers (Nos.)	Nil	2,305	3,740	–
	OFC Network (kms)	197	11,827	6,619	–
	Telecom Power Equipment (Nos.)	7,109	6,126	4,234	–
	Lithium-Ion Battery Racks (Nos.)	Nil	6,026	3,308	–
HFCL Limited	Revenue from operations (₹ mn)	47,433.10	44,650.50	40,645.20	-7%
	Total Income (₹ mn)	47,904.00	45,665.70	41,226.40	–
	EBITDA (₹ mn)	6,657.70	6,830.60	5,071.10	-13%
	EBITDA Margin (%)	14.04%	15.30%	12.48%	–
	Profit after Tax (₹ mn)	3,177.10	3,375.20	1,732.60	-26%
	PAT Margin (%)	6.70%	7.56%	4.26%	–
	EPS (₹)	2.18	2.33	1.23	–
	Return on Equity (%)	10.10%	8.44%	4.21%	–
	Debt to Equity (in times)	0.24	0.24	0.33	–
	Interest Coverage (in times)	3.83	4.08	2.17	–
	ROCE (%)	15.91%	13.12%	8.16%	–
	Current Ratio (in times)	1.91	2.08	1.86	–
	Net Capital Turnover (in times)	2.45	1.90	1.64	–
	NAV / Book Value (₹)	22.53	27.95	28.28	–
	Return on Net Worth (%)	9.69%	8.34%	4.35%	–
Exicom Tele-Systems Limited	Revenue from operations (₹ mn)	7,079.31	10,195.98	8,676.06	10%
	Total Income (₹ mn)	7,233.99	10,385.01	8,988.00	–
	EBITDA (₹ mn)	677.78	1,309.87	(61.71)	-65%
	EBITDA Margin (%)	9.57%	12.85%	(0.71%)	–
	Profit after Tax (₹ mn)	326.74	639.16	(1,100.32)	-105%
	PAT Margin (%)	4.62%	6.27%	(12.68%)	–
	EPS (₹)	3.55	6.70	(9.11)	–
	Return on Equity (%)	14.08%	8.86%	(17.93%)	–
	Debt to Equity (in times)	0.51	0.04	0.74	–
	Interest Coverage (in times)	2.70	5.85	(1.44)	–
	ROCE (%)	17.45%	15.76%	(9.61%)	–
	Current Ratio (in times)	1.56	3.32	1.74	–
	Net Capital Turnover (in times)	3.45	1.68	2.11	–
	NAV / Book Value (₹)	25.24	75.65	64.35	–
	Return on Net Worth (%)	14.08%	8.86%	(17.93%)	–
Bondada Engineering Limited	Revenue from operations (₹ mn)	3,705.89	8,007.22	15,713.77	101%
	Total Income (₹ mn)	3,710.09	8,037.21	15,797.51	–
	EBITDA (₹ mn)	302.14	714.75	1,833.16	122%
	EBITDA Margin (%)	8.15%	8.93%	11.67%	–
	Profit after Tax (₹ mn)	171.34	463.06	1,153.68	126%
	PAT Margin (%)	4.62%	5.78%	7.34%	–
	EPS (₹)	1.73	4.63	10.33	–
	Return on Equity (%)	20.79%	27.58%	24.19%	–
	Debt to Equity (in times)	1.02	0.37	0.38	–
	Interest Coverage (in times)	5.08	7.96	7.23	–
	ROCE (%)	17.19%	30.75%	27.35%	–
	Current Ratio (in times)	1.40	1.42	1.46	–
	Net Capital Turnover (in times)	5.67	6.01	5.01	–
	NAV / Book Value (₹)	8.11	16.80	41.24	–
	Return on Net Worth (%)	21.36%	27.55%	25.05%	–

Source: RHP