Prostarm Info Systems IPO Opens: Plans to Raise ₹168 Crore

27 May 2025 , 09:44 AM

Prostarm Info Systems Limited is engaged in the manufacturer of power products and provision of power solutions in India. Its products include UPS systems, inverters, solar hybrid inverters, lithium-ion battery packs, and servo-controlled voltage stabilizers. In addition, Prostarm Info Systems Limited provides other value-added services including installation, rent services, after-sales services and AMC (annual maintenance contract).

The company has a pan-India presence with its 21 branch offices and 2 storage facilities. They are spread across 19 States/UT across India. Prostarm Info Systems Limited counts among its customers several government and private sector organizations. Over the years, it has developed strong links with a number of marquee customers across different industries.

The company’s offerings are meant to address the increasing need for reliable and efficient power solutions in India. Prostarm Info Systems Limited has a focus on R&D. Its engineering team is focused on developing new products and improving existing ones.  The company has also set up a strong quality control system to guarantee the high quality of products and good services. With an extensive penetration in Indian market and a focus on product innovation and quality, Prostarm Info Systems Limited aims to capitalize on the growing need for power solutions and products in India.

Offer Details:

The company is tapping the primary market to raise funds through fresh issue of shares. There is no offer for sale and none of the promoters are selling their stake.

Fresh Issue:

The IPO is of 16,00,000 equity shares with face value of ₹10 aggregating up to INR 1,680 m.

BRLMs (Book Running Lead Managers):

The BRLMs for this issue are:

• Choice Capital

Objectives of the IPO:

IPO proceeds will be used to (1) support its working capital, (2) to deleverage, and (3) for general corporate purposes, including possible acquisitions of businesses or assets.

Working Capital Needs

The company intends to use INR 7,250 lakhs of the net proceeds to finance its working capital requirements.

Deleveraging

The company plans to use INR 1,796 of the net proceeds for full or partial repayment/prepayment of all or a part of the company’s certain outstanding borrowings.

M&A

The firm intends to use a part of the net proceeds for its inorganic growth. However, the targets haven’t been determined yet.

 

Power Backup Solutions – A Growing Need

A Brief History:

The power backup market had its roots in the early 1900s out of the development of the first Uninterruptible Power Supply (UPS) systems. These were used for critical power backups for hospitals and data centers. Since then, industry has been growing to serve the needs for uninterrupted power supply to a range of areas such as IT, Healthcare, Manufacturing etc.

The Rise of Power Backup Solutions in India

The power backup solutions sector in India has experienced a significant growth over the past few years owing to the country’s robust economic growth and increasing utilization of technology. This has led to a growing supply gap that is being fulfilled by the power backup systems players. From a niche market, the industry has evolved into a multi-billion-dollar industry.

The UPS systems are divided into 3 major categories by the type of UPS configuration. They are online, line-interactive and offline. These systems are defined by how power moves through the unit.

Online UPS: UPS takes the incoming AC current, converts it into DC using a rectifier and feeds it to the battery and connected load via the inverter. This type of UPS protects the critical load from all power disturbances and hence is used for protecting large data centers, critical machinery, medical equipment, etc.

Line Interactive UPS: It is generally used in areas where outrages are rare, but power fluctuation is common. In the line-interactive system, the inverter is a part of the output and is always on. The inverter operates in reverse to charge the battery while AC input is normal and switches to battery power when input fails which provides filtering and voltage regulations. Advantages of a line interactive UPS are high efficiency, small size, low cost and high reliability, and voltage conditioning.

Offline UPS: Offline UPS is also called as standby or battery backup. When there is a continuous energy flow from the socket, the UPS system will be bypassed but if the UPS identifies an abnormality the offline power supply switches to the internal battery backup The offline UPS is not as high-grade as the online UPS, but they are functional and cost-effective option for domestic purpose. Its main advantages are that it is small in size, low cost and high efficiency.

 

Market Size and Growth

The Indian UPS Market has been showcasing an upward trend generating revenues of INR 96,432 m in FY24 while it was at INR 89,713 m in FY23. Further, the Indian power backup solutions market is estimated to grow to a market size of INR 155 bn FY30.

The industry has a CAGR growth rate of 4.03% for the period FY19–FY24 is estimated to accelerate and grow at 8.22% during FY24–FY30.

 

Market Size by Type:

Online UPS systems have the largest market share owing to high performance output and protection from input voltage spikes and distortions. Offline UPS is widely used as a power backup for computers in various IT industries.

Online UPS system forms the majority part of the UPS market with 72.85% share in FY24. Even in future years, the trend is expected to continue with Online UPS system leading with 74.40% market share followed by offline UPS market system. The market share of line interactive is declining. From 8.97% in FY24 it is expected to go down to 8.44% in FY30.

 

Market Size by Application:

As of FY2024, the Uninterruptible Power Supply (UPS) market in India is segmented primarily across four key applications: Commercial, Industrial, Government, and Residential. The Commercial segment held a market share of 42.7%, industrial at 29.7% and government at 18%. The market landscape is expected to shift modestly by FY2030. Forecasts indicate that the Commercial segment will continue to dominate, capturing approximately 43.98% of the market, followed by the Industrial segment at 28.81%, and the Government segment at 18.51%. This evolution reflects a growing demand for reliable power infrastructure across commercial and industrial sectors, driven by increased digitalization, manufacturing expansion, and infrastructure development initiatives.

 

Prostarm Info Systems Limited: The Emerging leader in Power Solutions
Origin Story:

Prostarm Info Systems Limited (Formerly known as Prostar Micronova Power Systems Private Limited) was established on 11th January 2008, is a popular Indian company registered under company Act 1956. Over the years the Company has undergone significant transformation. It has expanded its range of products and services to become a major player in the power solution products industry.

Evolution and Growth

Prostarm started as a seller of third-party products. Over the years, it has evolved into design/manufacturing/assembly/sale of Energy Storage Equipment and Power Conditioning Equipment. The company has also forayed into the engineering, procurement and construction (EPC) business, with a focus on installing rooftop solar photovoltaic (PV) systems throughout India. This strategic growth has allowed Prostarm to be a key player in the power solutions sector.

Competitive Landscape

The business is highly competitive with several major and minor competitors. The major players in this market are Servotech Renewable Power System Limited, Hitachi Ltd, Schneider Electric SE and ABB Ltd.

Major Competitors

• Servotech Renewable Power System Limited: Servotech Renewable Power is a leading competitor in the power solutions segment, with a revenue of ₹ 3,537 million for FY24 and EBITDA margin of 10.5%.
• Hitachi Ltd: The Japanese conglomerate has business interests across IT, green energy, construction machinery, and more.
• Schneider Electric SE: A French multi-national corporation, known for critical products power, solar and ESS, medium voltage distribution and CA, and for industrial/building automation.
• ABB Ltd: A Swedish Swiss multinational corporation that operates in electrification, industrial automation, motion, and robotics and discrete automation.

Competitive Positioning

• Financial Performance: Prostarm has the highest EBITDA Margin and PAT Margin among peers.
• Strengths: High EBITDA margin, high PAT margin, high return on capital employed.
• Weaknesses: Debt-to-equity ratio higher than some peers.
• Opportunities: Rising requirement of storage and power backup, rising attention to renewables and energy efficiency.

 

Comments from RHP On Market Opportunity:

• The Indian UPS Market has been showcasing an upward trend generating revenues of ₹96,432 million in FY24 while it was at ₹89,713 million in FY23. The market is further expected to grow at a CAGR of 8.22% till FY30.
• The Indian Solar Hybrid Inverter market in India was recorded at ₹ 5,242 million in FY24 and grew at a CAGR of 9.21% between FY19 and FY24. Further, going ahead the market is expected to grow at a 18.60% till FY30. It is forecasted to reach Rs 13,938 million by FY30. This growth is expected to be driven by the rising demand for renewable energy as India transits from fossil fuels to more sustainable energy sources to combat climate change and improve energy security.
• The India Lift Inverter Market was valued at ₹164,292.82 million in FY24 and is projected to exhibit a CAGR of 8.28%.
• The Indian Servo Stabilizer market has reached ₹13,455 million in FY24 and is expected to reach ₹23,137 million in FY30 growing at CAGR 9.46%.
• The India Isolation Transformers (Non- Distribution Transformers) Market was valued at ₹15,843 million in FY24 which grew at CAGR of 3.5% from ₹13,357 million in FY19 and is projected to exhibit a CAGR of 7.3% during the forecast period from FY25 TO FY30.
• The Solar EPC market was recorded at ₹135,464 million in FY24 and has grown at a CAGR of 4.97% between FY19 and FY24. It is further expected to reach ₹2,22,112 million by FY30. The growth of solar parks in several states presents a sizable market for Solar EPC companies.
• The Indian Lithium – Ion battery market in India was recorded at ₹5,58,078 million in FY24 and grew at a CAGR of 7.66% between FY19 and FY24. Further, going ahead the market is expected to grow at a 19.67% till FY30. It is forecasted to reach ₹16,39,090 million by FY30. The Indian Lithium-Ion Battery Market is growing rapidly, driven by the surging demand for energy storage solutions in various sectors, including automotive, consumer electronics, and renewable energy.

 

Strengths & Weaknesses

Prostarm’s key strength is its above-peer financial metrics and well diversified revenue stream. Its stated EBITDA and PAT margin are higher than peers. So, is its RoCE. This indicates a high level of operational high level of operational efficiency and effective cost management.

While the company does well with their financials, their debt-to-equity is a bit higher in comparison to some of their competitors. This may impair its ability to remain invested and grow during market downturns.

 

 

Brief Discussion on Financials:

Prostarm witnessed a sharp growth in FY23 followed by a healthy/normalized growth in FY24. In FY23, revenue witnessed a 34.5% growth followed by a 12% YoY growth in FY24. A similar trend was visible in its PAT. PAT witnessed a 78% increase in FY23, followed by an 18% increase in FY24.

The strong growth in FY23 was underpinned by the company’s expansion into newer product lines. Solar Hybrid Inverter Systems and Lithium-Ion Battery Packs were the key contributors to the growth. In addition, the company has also forayed into solar EPC business. This had also contributed materially to FY23.

In FY24, while the company continued to witness robust growth, it focused away from the sale of third-party products. As such, the related business experienced a sharp decline in sales and offset some of the growth in the overall business.

Figure: Brief Financial Profile

Metric	As of March 31, 2022	As of March 31, 2023	As of March 31, 2024	As of December 31, 2024
Revenue from Operations	17,205	23,235	25,923	27,027
Net Income	1,497	2,619	3,095	2,957
PAT (Profit After Tax)	1,087	1,935	2,280	2,211

Source: RHP

Figure: Peer Comparison – Financial Metrics (9M FY24, in INR Lakhs; * – FY24)

Company	Revenue from Operations	EBITDA Margin	Net Profit Margin	Return on Net Worth	Return on Capital Employed
Prostarm Info Systems Limited	26,863	13.36%	8.23%	23.95%	22.95%
Sungarner Energies Limited*	1,769	11.92%	6.06%	16.78%	17.12%
Servotech Power System Limited	52,815	8.44%	4.72%	10.50%*	11.40%*

Source: RHP

 

Figure: Peer Comparison – Valuation

Company	P/E Ratio	NAV per Equity Share
Prostarm Info Systems Limited		19.66
Sungarner Energies Limited	55	41.32
Servotech Power System Limited	243	6.54

Source: RHP