Pace Digitek IPO: Full Details & Analysis
Pace Digitek Limited, a rapidly growing solutions provider in the telecom passive infrastructure space, is launching its IPO (fresh issue) to raise over ₹ 800-900 crore. Pace Digitek IPO opens for subscription on Sept 26, 2025, and closes Sept 30, 2025. The company is aiming to capitalise on the booming telecom, optical fibre, and renewable energy sectors in India, particularly through Battery Energy Storage Systems (BESS). With strong past financial growth and a large order book, the IPO is being watched closely by both institutional and retail investors.
Pace Digitek IPO Key Details
| Parameter | Detail |
|---|---|
| Issue Size | Approximately ₹ 819.15 crore (fresh issue) |
| Earlier DRHP Proposed Size | Up to ₹ 900 crore according to DRHP; may include pre-IPO placement of up to ₹ 180 crore. |
| Fresh Issue Only (no Offer for Sale) | Entire issue is fresh equity shares. |
| Price Band | ₹ 208 to ₹ 219 per share |
| Lot Size for Retail | 68 shares per lot. Minimum investment for retail (at upper band) ~ ₹ 14,892 |
| Opening / Closing Dates | IPO opens for subscription Sept 26, 2025 and closes Sept 30, 2025. |
| Allotment / Listing Dates (Tentative) | Basis of allotment around 1-Oct-2025; listing expected on both NSE & BSE around Oct 6, 2025. |
| Usage of Proceeds | ~ ₹ 630 crore will be used for capital expenditure, especially for setting up battery energy storage systems via subsidiary (Pace Renewable Energies) for a project awarded by Maharashtra State Electricity Distribution Co. Ltd (MSEDCL). The rest will go towards general corporate purposes. |
| Order Book | Around ₹ 7,633.6 crore as of recent filings; majority from public sector clients. |
Financial Performance (Recent Years)
| Period | Revenue from Operations | Profit After Tax (PAT) | Key Ratios / Margins |
|---|---|---|---|
| FY 2023 | ~ ₹ 503.20 crore | ~ ₹ 16.53 crore | Lower margins; smaller scale |
| FY 2024 | ~ ₹ 2,434.48 crore (≈ 383.8% growth vs FY23) | ~ ₹ 229.87 crore PAT (≈ 1290% growth) | Substantial margin improvement |
| Six months ending Sept 30, 2024 | ~ ₹ 1,188.35 crore | ~ ₹ 152.04 crore PAT | |
| Recent (FY25 interim / trailing year) | Revenue remained roughly flat from FY24 to FY25 (~ ₹ 2,438.8 crore) but PAT rose by ~21.4% to ~ ₹ 279.1 crore. |
Other useful metrics from latest filings include improving Ebitda margin, increasing operating leverage, and good returns on equity (ROE) and capital employed (ROCE) in recent periods.
Business Model & Operations
- Verticals / Segments: The company operates in three main verticals:
- Telecom: Passive infrastructure, optical fibre cable projects, telecom tower infrastructure, operations & maintenance.
- Energy: Solar energy projects, battery energy storage systems, power management and telecom power equipment.
- ICT: Information & Communication Technology services, smart classrooms, surveillance, etc.
- Geographical Presence: Pan-India operations, with projects and revenues from many states like Maharashtra, Karnataka, Gujarat, Andhra Pradesh, Jammu & Kashmir, etc. Also some operations in Myanmar and Africa.
- Manufacturing & Infrastructure:
- Several manufacturing facilities (through its subsidiary Lineage Power) in Karnataka, producing telecom passive infra equipment, lithium-ion battery racks.
- Facility for Battery Energy Storage Systems (BESS) being set up – one facility to become operational (or started) by April 2025.
Future Plans
- Expansion in BESS / Renewable Energy: A major portion of IPO capital (₹ 630 crore) is earmarked for energy storage systems and boosting renewable energy operations, especially under the subsidiary Pace Renewable Energies.
- Diversification of Revenue Sources: While telecom is currently a large contributor, the company plans to increase its revenue from energy and related infrastructure to balance exposure.
- Capacity Utilization & Manufacturing Scale-Up: Increasing utilization of installed capacity, improving operating margins, investing in manufacturing, especially for BESS.
- Serving Public Sector / Large Contracts: Much of the order book is from public sector clients. The strategy likely includes leveraging these relationships to drive stable revenue streams.
Strengths & Risks
Strengths
- Strong Growth Track Record: Spectacular growth in revenue and profits in FY23-24, with orders in hand.
- Large Order Book / Public Sector Contracts: Ensures visibility for future revenue.
- Strategic Move into Energy Storage: With global energy trends, demand for BESS is rising. This can open high-margin growth.
- Diversified Solutions Provider: Not just manufacturing, also services, ICT, O&M, project execution helps hedge risk.
- Manufacturing Presence & Infrastructure Assets: Existing facilities help in scaling up.
Risks
- Client Concentration: Heavy dependency on telecom clients and a relatively small number of major clients could pose risk if contracts or demand change.
- Margin Volatility in Energy / BESS: Renewable / energy storage tends to have fluctuations in margins due to input costs (battery, components, raw materials) and regulatory / policy challenges.
- Execution Risk: Scaling up BESS projects, setting up new facilities, adhering to timelines, cost overruns and quality issues are potential concerns.
- Competition: There are many players in telecom infra, battery storage, and renewable energy. Competing on price, technology, and reliability will be essential.
- Regulatory & Policy Risk: Changing policies, subsidies, import duties on components, clean energy regulations can affect cost structure.
Impact / Investor Outlook
- Listing Gains Potential: Given the strong anchor investor interest (₹ 245.14 crore raised from anchors at top end price of ₹ 219/share) and strong financials, there may be listing premium.
- Long-Term Value Dependent on Execution: Success will hinge on BESS project performance, scaling up renewable energy vertical, and reducing dependency on telecom.
- Valuation Consideration: The IPO price band implies certain valuation multiples (P/E, EV/EBITDA) that may look rich compared to peers unless future growth and margin expansion are delivered.
- Risk-Reward: For investors with tolerance for infrastructure / energy sector risks, this could be attractive. For conservative investors, potential volatility and dependency risk suggests cautious exposure.
