Pace Digitek IPO: Check IPO Date, Lot Size, Price & Details

Overview

Pace Digitek Ltd is a telecom infrastructure solutions provider with a strong presence in telecom towers and optical fibre cables. It began as an electrical equipment manufacturer for the telecom industry and has expanded into a multidisciplinary solutions provider across telecom, energy, and information and communication technology (ICT) verticals. Its offerings span manufacturing, installation, commissioning, and operation & maintenance (O&M) of telecom sites, providing turnkey solutions.

The company operates in Maharashtra, Gujarat, Karnataka, Andhra Pradesh, Jammu & Kashmir, Uttarakhand, Assam, and the northeastern states of India. It also has foreign activities in Myanmar and Africa.

The telecom vertical forms the backbone of the business, contributing over 90% of revenue. In this segment, the company manufactures power management systems, hybrid DC power systems, inverters, and lithium-ion batteries, while also providing operations and maintenance (O&M) services for towers and fibre networks. It executes turnkey projects that include tower erection and optical fibre cable laying, catering to telecom operators and state enterprises.

In the energy vertical, the company focuses on solarisation of telecom towers through the supply and installation of solar modules, lithium-ion batteries, and related systems. It has entered the Battery Energy Storage System (BESS) space with both standalone and solar-coupled formats. The company also undertakes rural electrification projects under the EPC model, leveraging its expertise in energy storage and distributed energy solutions.

The Information, Communication, and Technology vertical, though smaller in scale, provides customised solutions in surveillance, smart classrooms, and agricultural kiosks, supporting the digital infrastructure ecosystem.

Through its recently acquired subsidiary Lineage Power, the company has achieved backward integration in its supply chain and expanded its capabilities in energy management. Lineage Power manufactures lithium-ion batteries, energy storage containers, and power conversion systems, supported by advanced Energy Management Systems (EMS). This integration enhances the company’s competitiveness in energy and telecom solutions.

The company operates three manufacturing facilities in Karnataka, collectively spread over ~200,000 sq. ft. These facilities are accredited with multiple global standards and CMMi Level 3 certifications, underscoring their commitment to quality, reliability, and process excellence.

Over the years, the company has diversified from being a telecom equipment manufacturer into a comprehensive telecom and energy infrastructure solutions provider. Its operations span the lifecycle of telecom and energy projects, from design and manufacturing to implementation and maintenance, while also addressing emerging opportunities in renewable energy and ICT applications. Its international presence in Myanmar and Africa complements its strong base in India, providing access to high-growth developing markets.

Overall, the company has positioned itself as an integrated infrastructure solutions provider with capabilities across telecom networks, renewable energy, and ICT, backed by manufacturing strength and technological integration.

IPO Details

Object of the Issue

• Funding its Subsidiary's Capex requirements for the installation of battery energy storage systems for a project awarded by Maharashtra State Electricity Distribution Company Ltd.
• General Corporate Purpose

Key Strengths

• Diversified business segments with a strong order book
  The Company has expanded from a telecom equipment manufacturer into a diversified solutions provider across telecom infrastructure, energy, and ICT. This diversification is reflected in its healthy order book of ₹7,633.6 crore as of March 31, 2025, compared to ₹6,341.3 crore in FY24. The telecom segment remains the largest contributor with ₹3,570.0 crore in FY25, while the energy vertical has grown rapidly to ₹4,063.6 crore, led by Battery Energy Storage Systems (BESS) and solar projects. ICT adds further breadth with orders of ₹156.7 crore. Backward integration through subsidiary Lineage and entry into new verticals like solar and ICT provide stability and growth visibility.

• Experienced Leadership Supported by Technically Skilled Workforce
  The Company is guided by an experienced Board of Directors and senior management, led by the Promoter, Maddisetty Venugopal Rao, who brings over 20 years of experience in the telecom and energy sectors. The leadership is supported by a technically skilled workforce of 1,513 employees holding qualifications such as B.Tech, M.Tech, B.Eng, MSc, and Ph.D. This team drives in-house R&D, system design, and end-to-end project execution, ensuring timely delivery, high-quality outcomes, and the ability to meet the evolving technical demands of the telecom, energy, and ICT sectors.

Key Risks

• Customer Concentration
  The Company’s business is significantly dependent on a few key customers. In Fiscal 2025, Fiscal 2024, and Fiscal 2023, the top 10 customers contributed 96.25%, 99.45%, and 92.16% of revenue, respectively. The top 3 and top 5 customers together account for ₹2,169.8 crore (88.97%) and ₹2,291.8 crore (93.97%) of revenue in FY25. While the Company has maintained long-term relationships with top customers associated for an average of 10 years, any loss or reduction of business from these key clients could materially affect revenue, cash flows, and financial performance.

• Dependence on Public Sector Clients
  A significant portion of the Company’s revenue comes from public sector customers, accounting for 96.17% in FY25 and 92.08% in FY24. The Company’s performance depends on its ability to successfully bid for these contracts, compete with larger players, and meet stringent technical requirements.
  A major contributor is the 4G Saturation Project awarded in March 2023 by a public sector telecom company, valued at ₹7,568.3 crore, covering supply, installation, and O&M of 9,595 telecom sites for 5 years (extendable by another 5 years). While such projects drive revenue growth, the reliance on government tenders exposes the Company to competitive bidding pressures and potential delays or reductions in contract awards, impacting revenue and profitability.

• Regional Revenue Concentration Risk
  The Company’s revenue is concentrated in a few states, primarily Maharashtra, Karnataka, Jammu & Kashmir, Andhra Pradesh, and Tamil Nadu. In FY25, the Western region contributed ₹1,122.9 crore (46.05%), South ₹460.6 crore (18.89%), and North ₹434.9 crore (17.83%) of total revenue. While the Company has established a strong presence in these regions, such geographical concentration exposes it to operational, regulatory, and market risks specific to these areas. Any disruption, such as changes in local policies, infrastructure challenges, or adverse market conditions, could impact revenue generation and cash flows. Expanding operations to other regions could help mitigate this risk over time.

Financial Snapshots

KPI Comparison

Conclusion

Pace Digitek Ltd has evolved into a diversified telecom and energy infrastructure solutions provider with strong margins and profitability. However, its business model carries significant uncertainty. Revenue growth has been volatile, with FY25 showing negligible top-line expansion (0.18%) despite a large order book, raising concerns about execution and scalability. The company’s extreme reliance on a few large public sector clients (96% of FY25 revenue) and concentration in select states further heighten risk, as any policy change, delay in government projects, or reduction in awards could materially impact financials.

While the company benefits from backward integration, a skilled workforce, and exposure to emerging opportunities in energy storage, the sustainability of growth remains uncertain given its dependence on tender-driven, lumpy projects and limited diversification in clientele and geography. At the proposed valuation, these uncertainties outweigh the positives. Hence, we recommend to avoid on the IPO.