Desco Infratech Limited is a civil infrastructure services company planning to launch its shares on the BSE SME platform. Desco Infratech Limited established its operations in 2011 to deliver essential Engineering, Procurement, and Construction (EPC) services for City Gas Distribution (CGD). It is done alongside renewable energy, water supply, and power sectors. The extensive pipeline project experience of Desco Infratech has enabled it to complete major operations in around 55 cities at 14 locations across India. The raised funds from the IPO will enable Desco Infratech to boost its operational capacity and equipment standards and create additional funds.

Desco Infratech Listing Details

The IPO of Desco Infratech accessed the BSE SME platform during the subscription period from March 24 to March 26, 2025. The IPO contains 20.50 lakh fresh equity shares worth ₹30.75 crore, constituting a 100% fresh issue. It aims to leverage India’s infrastructure expansion to drive long-term value.

• Listing Price: Desco Infratech made a positive debut on April 1, 2025, listing at ₹160 per share on the BSE SME, reflecting a gain of over 6% from its issue price of ₹150. The strong oversubscription translated into a modest premium upon listing.
• Investor Sentiment: The IPO received impressive investor participation as investors subscribed to the shares 83.75 times. During the IPO process, Non-Institutional Investors contributed 233.26 times subscriptions, exceeding Retail at 50.62 times, while Qualified Institutional Buyers submitted 28.76 times subscriptions. Before its March 21, 2025 listing date, Anchor investors acquired 5.77 lakh shares, which amounted to ₹8.66 crore.
   

First-Day Trading Performance of Desco Infratech

BSE SME platform will welcome Desco Infratech to its trading list on April 1, 2025, yet the market anticipates a mild share price movement. The high subscription rates and extensive participation from HNIs demonstrate market confidence about the company’s enduring business potential.

Retail investors’ high initial IPO demand might lead to a conservative opening trading period because potential investors are worried about valuation. Expert analysts predict that the stock will maintain its issue price of ₹150, with listing day movement likely determined by institutional support and investor perception of growth visibility for FY25 and beyond.
 

Market Sentiment and Analysis

The IPO arrives when India heavily invests in infrastructure, with increased spending in CGD, renewable energy, and water networks. Desco Infratech is strategically positioned to ride this momentum, aligning operations with national infrastructure goals.

• Positive Investor Response: The positive investor response demonstrates that HNIs and QIBs believe that Desco will successfully execute its projects and grow further. The company has successfully delivered more than 4,000 kilometers of MDPE pipelines together with over 2 lakh PNG connections because of its proven track record and clear visibility.
• Anticipated Listing Performance: Given the lack of GMP and sector-specific competition, listing performance is expected to hover around the issue price. However, long-term investors are expected to focus on revenue visibility and execution performance in upcoming quarters.

Growth Drivers and Challenges

The main business operations of Desco Infratech focus on city gas infrastructure while the company generates revenue through multiple services. These include renewable energy, water, and power distribution sectors. Its in-house execution capabilities and strategic alliances drive operational excellence.

Growth Drivers:

• Established Operations: The company has operated highly established CGD and pipeline projects in more than 55 cities spanning over 10 years.
• Diversified Services: The company performs diverse service operations, extending to roads, bridges, CGD systems, water distribution, and power infrastructure.
• Order Book Visibility: Gujarat Gas, GAIL, BPCL, Adani Total, and several other partners ensure Desco receives regular project revenue streams due to their order book visibility.
• Geographical Reach: The company can leverage its Pan-India business presence to benefit from infrastructure prospects across different regions.
• Efficient Execution: Through 234 skilled employees and institutional standard operating procedures (SOPs), the company maintains project compliance and secure delivery while ensuring safety practices.
   

Challenges:

• Financial Dependency: The organization produces stable financial performance with a modest debt-equity ratio (0.34), but its operations depend mostly on working capital resources.
• Policy-Linked Projects: Delays with state-level approvals and fund delivery from authorities result in project execution delays for policy-linked projects.
• Retail Price Sensitivity: Fundamentals cannot stop retail investors from participating because the IPO price is perceived as too expensive to warrant their investment.
• Execution Risk: Like all infra projects, delays may occur due to land, weather, or supply chain disruptions.
• Market Fragmentation: Desco’s competitive segment faces market fragmentation that puts the company at risk as larger contractors and regional competitors challenge its operations.

Utilisation of IPO Proceeds 

The funds obtained from the IPO will serve Desco Infratech in its expansion plans to grow operations and enhance operational performance:

• Working Capital: The company aims to utilize ₹18 crores for project implementation, maintenance of operations, and payment of suppliers.
• Machinery Purchase: The company plans to use ₹16.80 crore to purchase new equipment to build internal construction capabilities.
• Corporate Office Setup: Surat will host a corporate office of Desco Infratech through a funding allocation of ₹10.43 crore.
• General Corporate Purposes: Future business development and the establishment of contingency funds will receive the allocated remaining resources under this category.

Financial Performance of Grand Continent Hotels

Desco Infratech maintains consistent revenue levels combined with exceptional increases in business profitability metrics throughout its latest fiscal performance years.

• Revenue: Revenue reached ₹29.49 crore during FY24, which showed the same amount as FY23’s results, and H1 FY25 reached ₹22.75 crore.
• Net Profit: ₹3.46 crore in FY24 (₹1.23 crore in FY23); ₹3.38 crore already achieved in H1 FY25, indicating strong growth.
• Net Worth: The company’s equity gained substantial strength throughout FY23 and FY24 as its net worth increased from ₹5.04 crore to ₹11.99 crore.
• Return on Equity (ROE): The financial indicators for Return on Equity (ROE) amount to 40.61%, RoNW at 28.83%, PAT Margin at 11.76%, and Price-to-Book ratio at 6.22x.

The company achieved a major accomplishment when it secured entry into the market through the BSE SME platform. Financial data and operational success records of the organization show stable financial performance. Widespread investor subscriptions across all categories have overshadowed the IPO’s pricing concerns as people believe the company will grow successfully. Desco benefits from India’s expanding energy and urban development schemes thanks to its Phase 1 focus on infrastructure and utility services. The company expects listing visibility to boost its scalability by gaining better access to capital and building credibility while gaining operational independence.