Digilogic Systems IPO Makes Dismal Debut with 20% Discount, Lists at ₹83.20 Against Poor 1.10x Subscription

Digilogic Systems Ltd, a Hyderabad-based company incorporated in 2011 engaged in design, development, integration, manufacturing, supply, and support of Automated Test Equipment (ATE) systems, radar and Electronic Warfare simulators, application software, and embedded signal processing solutions for defence and aerospace engineering sector with offerings organised into three segments including Test Systems comprising ATE, checkout systems, and radar/EW simulators, Application Software comprising data acquisition platforms and IP cores, and Services covering system integration, upgrades, and lifecycle support, made a dismal debut on BSE SME on Wednesday, January 28, 2026. After closing its IPO bidding between January 20-22, 2026, the company commenced trading with a steep decline of 20% opening at ₹83.20 and hit lower circuit at ₹79.05 (down 23.99% from issue price).

Digilogic Systems Listing Details

Digilogic Systems launched its IPO at ₹104 per share with minimum investment of 2,400 shares costing ₹2,49,600. The IPO barely scraped through with subscription of only 1.10 times - individual investors at 1.08 times, QIB at 1.60 times, NII severely undersubscribed at 0.42 times.

First-Day Trading Performance

Listing Price: Digilogic Systems opened at ₹83.20 representing steep decline of 20% from issue price of ₹104.00, quickly hit lower circuit at ₹79.05 (down 23.99%), with VWAP at ₹80.14, reflecting extremely negative market sentiment with severe opening discount followed by immediate lower circuit hit creating massive investor losses with market capitalisation declining to ₹228.86 crore against pre-IPO market cap of ₹301.10 crore and turnover of only ₹54.81 lakh with only sell-side interest visible in order book.

Growth Drivers and Challenges

Growth Drivers:

Defence and Aerospace Expertise: Experience in delivering defence and aerospace systems with end-to-end solution capabilities spanning entire project lifecycle from concept development to deployment and maintenance for test, simulation, and embedded systems.

Strong Industry Relationships: International collaborations and strong industry relationships with reusable engineering platforms enabling efficient delivery of specialised solutions to defence and aerospace clients.

Professional Leadership: Experienced leadership team with technical and industry expertise guiding company's operations in niche defence technology segment.

Financial Performance FY25: Revenue of ₹72.19 crore in FY25, strong PAT of ₹8.11 crore, ROE of 34.57%, ROCE of 34.27%, healthy EBITDA margin of 18.60%, PAT margin of 11.26%.

Challenges:

Severe Market Rejection: IPO barely subscribed at 1.10 times with bNII at dismal 0.20 times and only 1,333 applications, opening decline of 20% followed by lower circuit at 23.99% down.

Exorbitant Pricing: Analyst categorically states issue appears exorbitantly priced at post-IPO P/E of 93.36x with bumper FY25 profits raising eyebrows and concerns over sustainability going forward.

Inconsistent Performance: Company reported inconsistency in top and bottom lines across reported periods with setback in FY24 revenue to ₹51.71 crore from ₹56.12 crore in FY23, H1 FY26 revenue of only ₹18.28 crore.

Small Scale Operations: Small post-IPO equity capital indicating longer gestation for mainboard migration, increased leverage with debt-to-equity rising to 0.63 from 0.40.

Utilisation of IPO Proceeds

New Facility: ₹51.68 crore for capital expenditure towards setting up proposed new facility expanding manufacturing and operational capabilities.

Debt Repayment: ₹8.00 crore for prepayment/repayment of certain outstanding borrowings strengthening balance sheet.

General Corporate Purpose: ₹4.18 crore for general corporate purposes.

Financial Performance

Revenue: ₹18.28 crore for H1 FY26, ₹72.19 crore for FY25, growth from ₹51.71 crore in FY24, reflecting expanding defence and aerospace technology operations though H1 FY26.

Net Profit: ₹1.61 crore in H1 FY26, ₹8.11 crore in FY25, growth from ₹2.40 crore in FY24, demonstrating profitability improvement though sustainability concerns persist with post-IPO EPS of ₹1.11 and P/E of 93.36x.