Desco Infratech Limited IPO

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Desco Infratech Limited is a growing infrastructure service provider with a core focus on the City Gas Distribution (CGD) sector in India. The company offers a wide array of infrastructure development and maintenance services, including:

i. Pipeline Laying, Installation & Commissioning: Specialized in laying pipelines for Piped Natural Gas (PNG) used by both domestic and commercial consumers.

ii. Operation and Maintenance (O&M) Services: Desco undertakes O&M services for underground and above-ground gas pipeline networks, covering Carbon Steel and Medium-Density Polyethylene (MDPE) pipelines. This includes:
a. Lock pressure tests                  b. Leak detection tests
c. Emergency response services through dedicated vehicles and rapid action teams

These preventive and corrective actions are vital in ensuring the safe, uninterrupted supply of natural gas, mitigating risks, and enhancing client satisfaction.

Desco Infratech has recently forayed into the power infrastructure segment, offering services for:

i. Installation and commissioning of Low Tension (LT) and High Tension (HT) power cables
ii. Laying of double-walt cables and HDPE pipes for power and connectivity infrastructure

Diversification into Water Distribution Projects :- To further expand its portfolio, the company initiated its first water infrastructure project post FY24, covering end-to-end services including:
i. Design and construction of water distribution networks
ii. Installation of open wells, sump wells, overhead tanks, and water systems
iii. Laying and commissioning of HDPE pipelines

Entry into Renewable Energy Infrastructure :- Desco Infratech is also tapping into the rapidly growing renewable energy sector. It has secured a project in the prestigious Gujarat Hybrid Renewable Energy Park, involving:
i. Erection of RCC (Reinforced Cement Concrete) piles for foundational and structural works
ii. Installation of structures and solar modules for energy generation

Conclusion

With over a decade of experience in core infrastructure services and a strategic expansion into power, water, and renewable energy segments, Desco Infratech Limited is evolving as a comprehensive EPC and O&M solutions provider. Its robust project execution capabilities, domain expertise, and proactive safety and maintenance protocols uniquely position the company to capture opportunities in India’s infrastructure growth story.

Objects of the Desco Infratech Limited IPO:

The Company Desco Infratech IPO proposes to utilise the Net Proceeds from the Issue towards the following objects: i. Funding of capital expenditure requirements towards setting up of corporate office in Surat, Gujarat. ii. Funding of capital expenditure requirements towards purchase of machineries. iii. Funding Working Capital Requirements of the Company. iv. General Corporate Purposes.
DRHP of Desco Infratech Limited IPO
RHP of Desco Infratech Limited IPO

Desco Infratech Limited IPO Details:

Open Date: Mar 24 2025
Close Date: Mar 26 2025
Total Shares: 20,50,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 30.75 Cr.
Lot Size: 1000 Shares
Issue Price: ₹ 147 - 150 Per Equity Share
Listing At: BSE SME
Listing Date: Mar 31 2025

Promoters And Management:

Mr. Pankaj Pruthu Desai, 61, is a Promoter, Chairman, and Managing Director of the Company. A BA (Economics) graduate, he has over 18 years of experience in city gas distribution and pipeline projects. He leads client acquisition, business development, and overall management of the Company. Mr. Malhar P Desai, 31, is a Promoter and Whole-Time Director of the Company. A Business Administration graduate, he has 8 years of experience in city gas pipeline operations. He oversees daily operations, tender acquisitions, HR, and finance functions. Mr. Samarth Pankaj Desai, 26, is a Promoter and Executive Director of the Company. A B.A. LLB. graduate, he has 6 years of experience in gas pipeline connectivity, operations, and management. He handles project operations, vendor management, and business development in new verticals.

Financials of Desco Infratech Limited IPO:

In Cr.
Particulars Sep 30, 2024 March 31, 2024 March 31, 2023 March 31, 2022
Revenue from Operations 22.63 29.39 29.22 19.85
EBITDA 4.85 5.55 2.19 1.65
EBITDA Margins 21.46% 18.91% 7.51% 8.35%
PAT 3.38 3.45 1.22 0.82
PAT Margins 14.94% 11.76% 4.20% 4.16%
ROE 19.51% 40.61% 27.62% 24.53%
D/E Ratio 0.30 0.34 1.15 0.80
CFOA -8.05 -0.27 -1.69 0.34

Comparison With Peers:

Companies Revenue EBITDA Margins PAT Margins D/E Ratio MCap P/E
Desco Infratech      (FY 2024) 29.39 Cr. 18.91% 11.76% 0.34 115.14 Cr. 33.37*
Rudra Gas Enterprise (TTM) 71.71 Cr. 13.44% 6.73% 0.71 58.40 Cr. 12.10
Likhita Infrastructure (TTM) 499 Cr. 20% 14% 0.00 1,137 Cr. 16.10
*Forward PE is 17.03 on the basis of FY 25 PAT.

Recommendation on Desco Infratech Limited IPO:

Review and Recommendation of Desco Infratech IPO by team IZ is 4/10.

Lead Manager of Desco Infratech Limited IPO:

  1. Smart Horizon Capital Advisors Private Limited

Registrar of Desco Infratech Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Desco Infratech Limited A-703, Swastik Universal, Next to Valentine Theatre, Dumas Road, Umra, Phone: +91 7574 999 09 Email: investors@descoinfra.co.in Website: https://www.descoinfra.co.in/

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