Pace Digitek IPO: GMP, Order Book, Valuation, Risks & All You Need to Know

Pace Digitek Limited, a telecom and energy solutions company, is set to hit Dalal Street with its ₹819.15 crore IPO, which opened on September 26 and will close on September 30, 2025. The price band is fixed between ₹208 and ₹219 per share, with a lot size of 68 shares. Shares will tentatively list on October 6. According to market trackers, its GMP is ₹23, translating to a 10.5% gain over the issue price. This shows moderate demand and steady investor interest, though not euphoric.

In this blog, we will break down Pace Digitek’s business model, what it plans to do with the IPO money, its key strengths and risks, how it compares with peers, who’s leading the company, and the overall sector view.

IPO Overview

• IPO Date: September 26 to September 30, 2025
• Total Issue Size: ₹819.15 crore
• Price Band: ₹208 to ₹219 per share
• Lot Size: 68 Shares
• Tentative Allotment Date: October 1, 2025
• Listing Date: October 6, 2025 (Tentative)
• GMP: The GMP for Pace Digitek IPO is ₹23, reflecting a 10.50% gain over the issue price, according to Chittorgarh.com (as of September 25).
  Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

Pace Digitek Business Model

Pace Digitek is basically a backbone player in telecom and energy infrastructure. Imagine the towers that enable your mobile signal or the fibre cables that carry internet; this company helps build them, install them, and then maintain them. It also manufactures intelligent power management systems through its subsidiary. Most of its income (97% in FY25) comes from executing large projects like tower building or fibre cable networks, while its newer focus is on energy, especially Battery Energy Storage Systems (BESS). In simple words, this is a company that builds critical digital and energy infrastructure and aims to diversify into renewable energy systems for the future.

Objectives of the IPO

Pace Digitek will use the IPO funds mainly for:

• Investing ₹630 crore in subsidiary Pace Renewable Energies to set up a Battery Energy Storage Systems (BESS) project in Maharashtra.
• Out of this, around ₹544 crore will be used to buy plant and machinery.

Strengths:

• Strong financial growth: Revenue grew from ₹503 crore in FY23 to ₹2,439 crore in FY25, a jump of over 4x in just two years. Profits rose even faster, from ₹17 crore to ₹279 crore.
• Healthy profitability: In FY25, for every ₹100 earned, Pace made ₹21 as operating profit and ₹11 as net profit. Its EBITDA margin at 20.7% is higher than competitors.
• Low debt: Its debt-to-equity ratio fell to 0.13 times in FY25, showing a stronger balance sheet than peers.
• Large order book: ₹7,633 crore worth of confirmed projects in hand (more than 3x its annual revenue), giving visibility of future business.
• Energy diversification: Over half its order book now comes from energy (53% in FY25), showing it is preparing for growth in the renewable space.

Risks:

• Customer concentration: 96% revenue comes from just 10 clients; losing even one can hurt results sharply.
• Heavy dependence on government tenders: Nearly all FY25 revenue (96%) is from PSU clients. Bids are highly competitive, and margins can shrink.
• Cash flow mismatch: Despite profits, operating cash flow was negative in FY23 and FY25, raising execution concerns.
• Warranty costs rising: Warranty claims shot up to ₹38 crore in FY25 from zero two years ago, showing higher liability risks.
• CSR and compliance lapses: Faced penalties for not transferring CSR funds on time for four years.
• High past borrowing costs: Took loans at 50% annual interest in FY24 to fund a project; though repaid, this raises concerns about cash flow planning.

For detailed information, visit Pace Digitek’s IPO page.

Peer Comparison

The company competes with HFCL, Exicom Tele-Systems, and Bondada Engineering.

• Profitability: Pace leads peers with 20.7% EBITDA margin. HFCL has 12.5% and Bondada has 11.7%. Exicom is loss-making.
• ROE: Pace earns ₹23 on every ₹100 shareholders invested, close to Bondada ₹24, much above HFCL ₹4.
• Debt position: Lowest leverage at 0.13x vs peers ranging 0.33–0.74.
• Scale: Smaller than HFCL by revenue but bigger than Bondada and Exicom.

Source: RHP, internal calculation

IPO Valuation

At the upper price of ₹219, Pace Digitek’s post-issue market cap is estimated at ₹4,727 crore. Its IPO is priced at a P/E ratio of 16.9 times, which is materially cheaper than HFCL (60x) and Bondada (38x). The sector average is nearly 49x. This means the IPO is valued at a discount, making it attractive compared to listed peers, provided the growth momentum continues.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

The People Behind Pace Digitek

Pace Digitek is run by the Maddisetty family. Chairman and MD Maddisetty Venugopal Rao has more than two decades of experience in telecom and energy infrastructure. He is known as a technocrat promoter, holding engineering, business, and doctoral qualifications. His wife, Padma Venugopal Maddisetty, is also a Whole-Time Director focusing on HR matters. Their son, Rajiv Maddisetty, is another Whole-Time Director with an MBA from the University of Delaware and previous association with PwC, adding a new-generation perspective. The promoter family holds over 84% stake pre-issue.

Beyond the family, the top management team has professionals like CFO P. Rajavendhan, a qualified CA with stints in Sterlite and Vedanta, and independent directors such as Prabhakar Reddy (ex-SEBI expert in financial regulation) and Om Prakash Mishra (former SBI banker). This mix of promoter-driven leadership with external professionals gives Pace both sector continuity and industry checks.

Industry Outlook

India’s digital push and energy shift are dual growth engines for companies like Pace Digitek. Telecom tower and fibre markets remain essential for 5G rollout, while energy storage systems are critical for renewable power adoption. The Indian optical fibre EPC market is expected to grow from ₹8,400 crore in FY24 to nearly ₹14,000 crore by FY28. At the same time, BESS installations are projected to expand 8,640 MW between 2022 and 2030. Declining lithium-ion battery costs are making such projects more viable. The opportunity size is big, but competition, tendering delays, and policy dependency will play a deciding role.

Analyst View

Pace Digitek has shown dazzling growth numbers and improvement in profitability, plus a strong shift toward renewable energy solutions. The low debt, high order book, and attractive IPO valuation compared to peers add to its strengths. However, dependence on a handful of PSU clients, negative cash flows despite profits, and compliance lapses should not be ignored.

For investors, this IPO offers both opportunity and risk. On one side, it’s a high-growth infrastructure play with a discounted valuation relative to peers. On the other side, its cash flow weakness, cost risks, and public tender dependency keep the business highly sensitive.

How to Apply for an IPO on INDmoney?

1. Download the INDmoney app and complete your KYC.
2. Go to INDstocks → IPO, or just search “IPO”.
3. Tap on an IPO from the list of live IPOs.
4. View key details like price band, lot size, and dates.
5. Tap Apply Now and choose the number of lots.
6. Use INDpay UPI for instant mandate tracking.
7. Your funds will be blocked until the share allotment is finalized.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Pace Digitek's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.