Pace Digitek, a leading integrated solutions provider in the telecom passive infrastructure space, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its upcoming IPO. The issue will consist of fresh issue of equity shares of up to INR 900 crore. There is no Offer for Sale (OFS) in the issue.
Pace Digitek IPO – Offer Details and Objectives
IPO Type: Fresh Issue only
Issue Size: Up to INR 900 crore
Face Value: INR 2 per share
Listing Exchanges: BSE and NSE
Book Running Lead Manager: Unistone Capital Private Limited
Registrar to the Issue: MUFG Intime India Private Limited
Out of the total amount, INR 630 crore will be used for capital expenditure and balance for general corporate purposes subject to the finalization of the issue price.
Pace Digitek IPO – Company Overview
Founded with a focus on manufacturing passive electrical equipment, Pace Digitek has evolved into a multi-disciplinary telecom and energy solutions provider with operations across India and select international markets, including Myanmar and Africa. Its services range from telecom tower infrastructure and solar energy projects to ICT services like surveillance systems and smart classrooms.
The company operates under three main verticals:
- Telecom: End-to-end solutions, including tower infrastructure, optical fibre networks, and O&M services.
- Energy: Solar energy and rural electrification projects, including lithium-ion battery systems.
- ICT: Smart technology solutions for education and agriculture.
A notable milestone was its acquisition of GE Power Electronics India’s business and the rights to the ‘Lineage Power’ brand in Fiscal 2014, enhancing its presence in the power management segment.
Pace Digitek IPO – Industry Outlook
The Indian telecom passive infrastructure market is expected to be INR 1.65 – 1.70 lakh crore between FY20 and FY24 and INR 2.0 – 2.10 lakh crore by FY28 as per CRISIL report. Optical fibre EPC industry is INR 8,400 crore in FY24 and is expected to grow to INR 13,500 – 14,000 crore by FY28 which is a CAGR of 12.5-13.5%.
Pace Digitek is well positioned to benefit from this sectoral growth especially with its end to end offerings—manufacturing and services to project execution.
Pace Digitek IPO – Financial Performance
Pace Digitek has demonstrated remarkable growth over the last three fiscal years. From FY22 to FY24, revenue from operations has grown from INR 405.70 crore to INR 2,434.49 crore, a CAGR of 144.96%. Profit after tax (PAT) has also grown significantly from INR 11.50 crore in FY22 to INR 229.87 crore in FY24, a CAGR of 285.08%. EBITDA margin has improved from 9.05% in FY22 to 17.41% in FY24.
As of 30 September 2024, the company reported:
- Revenue from operations: INR 1,188.35 crore
- EBITDA: INR 300.14 crore
- PAT: INR 152.04 crore
- EPS: INR 9.19
- ROE: 13.93%
- ROCE: 18.72%
Pace Digitek IPO – Operational Capacity and Infrastructure
Pace Digitek has 3 manufacturing facilities in Karnataka through its subsidiary Lineage Power Private Limited. 2 are operational—Manufacturing Facility 1 (Passive Infra equipment) and Facility 2 (lithium-ion battery systems)—while Manufacturing Facility 3 for battery energy storage systems (BESS) will start by April 2025. These facilities spread over 2,00,000 square feet and are ISO and CMMi Level 3 certified.
As of 31st March 2024, Pace Digitek’s manufacturing facility for passive equipment had an installed capacity of 10,944 units. In the fiscal year, the company produced 6,126 units, which is 55.98% of the installed capacity. So, more than half of the installed capacity is being utilized to meet the production demand.
Pace Digitek IPO – Customer Base
The company has long-standing relationships with major telecom operators, state-owned corporations and ICT clients. Top 10 customers contributed 99.45% of the revenue in FY24, a clear indication of client consolidation and trust.
Conclusion
Pace Digitek’s IPO is a strategic move to capitalize on its growth story and the expanding telecom and energy infrastructure space. With strong financials, a diversified business model, and a strong manufacturing backbone, the company is poised for long-term growth. Investors and industry watchers will be watching out for the final issue price and listing date in the coming weeks.
For more details related to IPO GMP and Live Subscription stay tuned to IPO Central.