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PremiumQuadrant Future Tek IPO Day 3 Updates: The Initial Public Offering for Quadrant Future Tek Limited saw a subscription rate of 186.66 times by the third day, which was the final day of bidding. The Retail Portion and the Non-Institutional Investors Portion were subscribed at rates of 246.94 times and 254.71 times, respectively, while the Qualified Institutional Buyer Portion experienced a subscription rate of 132.54 times.
Quadrant Future Tek IPO saw a subscription rate of 48.99 times by the second day of the share sale on Wednesday. The segment for Retail Individual Investors (RIIs) attracted a subscription rate of 137.21 times, while the non-institutional investors' quota was subscribed 87.22 times.
The Qualified Institutional Buyers (QIBs) portion experienced a 46 percent subscription rate. Quadrant Future Tek IPO was fully subscribed within moments of its opening for share sale on Tuesday, finishing the day with a subscription rate of 15.84 times.
Quadrant Future Tek Ltd launched its public subscription on Tuesday, January 7. The company has established a price range between ₹275 and ₹290 per equity share for its ₹290-crore initial public offering, which will be open until Thursday, January 9. On Monday, Quadrant Future Tek revealed that it had raised over ₹130 crore from anchor investors just a day before the public share sale commenced. The total ₹290-crore initial public offering consists entirely of a new issue, with no portion allocated for an offer for sale.
The funds generated from this issuance will be allocated to meet long-term working capital requirements. The proceeds from the IPO will also be used for capital expenditures associated with the development of the electronic interlocking system, debt repayment, and the remaining funds will be applied to general corporate purposes.
Quadrant is a research-oriented company dedicated to developing advanced train control and signaling systems as part of the Indian Railways’ KAVACH initiative, which ensures maximum safety and reliability for rail passengers. Furthermore, the company runs a specialized cable manufacturing facility that features an electron beam irradiation center, producing cables that serve both railway rolling stock and the naval defense industry.
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The initial public offer of Quadrant Future Tek IPO has been subscribed 186.66 times on the third day of subscription today, as per BSE data.
The initial share sale received bid for 1,08,26,32,500 shares against 57,99,999 shares on offer, according to BSE.
The portion for retail investors received 246.94 times subscription while the quota for non-institutional investors got subscribed 254.71 times. The qualified institutional buyers (QIBs) part is booked 132.54 times.
The initial public offer of Quadrant Future Tek IPO has been subscribed 185.64 times on the third day of subscription today, at 16:54 IST, as per BSE data.
The initial share sale received bid for 1,07,67,26,000 shares against 57,99,999 shares on offer, according to BSE.
The portion for retail investors received 242.26 times subscription while the quota for non-institutional investors got subscribed 254.10 times. The qualified institutional buyers (QIBs) part is booked 132.54 times.
The company primarily generates revenue through its specialty cable division, as revenue from Train Control & Signaling Division is yet to materialize. On an average, Top five customer and Top customer contributes over 75% and 49% of its revenue respectively. Agreements with any of its customers are not long term in nature, and orders secured are subject to termination. Any delay, cancellation or failure to secure orders in the future could adversely impact business performance.
With a manufacturing facility in Basma, Punjab, and design centres in Bengaluru and Hyderabad, the company caters to railways, naval defense, solar energy, and electric vehicle (EV) sectors.
Cable is a conductor used for transmitting electric power or telecommunication signals from one place to another. A regular power cable can be used for standard applications which are compatible with most equipment and setups. Sometimes, these regular power cables cannot quite fit the requirements of special applications. Engineers and Designers often need to meet the specific requirements which are well suited by specialty power cables. Specialty cables have unique properties and special structures which are specifically designed for more industrial applications like railways, defence, automobiles etc.
Quadrant has developed expertise in Train Control and Signaling Systems, integrating four essential components: ontrack, trackside, indoor, and onboard equipment. It excels in safety-critical system engineering, adhering to stringent global standards like SIL-4. The company combines its team's deep knowledge of railway operations with robust product engineering skills to meet safety and performance benchmarks.
The initial public offer of Quadrant Future Tek IPO has been subscribed 153.94 times on the third day of subscription today, at 15:05 IST, as per BSE data.
The initial share sale received bid for 89,28,22,650 shares against 57,99,999 shares on offer, according to BSE.
The portion for retail investors received 221.91 times subscription while the quota for non-institutional investors got subscribed 237.39 times. The qualified institutional buyers (QIBs) part is booked 89.55 times.
The company's listed peers are Kernex Micro Systems Ltd, HBL Power Systems Ltd (with a P/E of 61.59), Apar Industries Ltd (with a P/E of 49.11), and Polycab India Ltd (with a P/E of 64.85).
With a PE ratio of 79x and an EV/EBITDA of 34x, Quadrant Future Tek Limited's valuation is notably higher than some of its peers, justified by its strong market position, robust growth prospects and solid financial performance, evidenced by a robust ROE of 33%. The premium valuation is further underpinned by its large addressable market and significant project wins, specifically in KAVACH, which enhances its growth potential and ensures sustainable growth prospects. Given these factors, we assign a ‘SUBSCRIBE’ rating.
The initial public offer of Quadrant Future Tek IPO has been subscribed 108.79 times on the third day of subscription today, at 14:00 IST, as per BSE data.
The initial share sale received bid for 63,09,94,450 shares against 57,99,999 shares on offer, according to BSE.
The portion for retail investors received 204.12 times subscription while the quota for non-institutional investors got subscribed 192.69 times. The qualified institutional buyers (QIBs) part is booked 35.07 times.
A day before its initial public offering (IPO) opened for public subscription, Quadrant Future Tek said on Monday that it has raised over ₹130 crore from anchor investors.
According to a circular posted on the BSE website, the investors included, among others, WhiteOak Capital Mutual Fund, Kotak Mutual Fund, LIC Mutual Fund, Bank of India Mutual Fund, Citigroup Global Markets Mauritius, Ashoka WhiteOak ICAV, Bengal Finance and Investments Shubhkam Venture (I) Pvt Ltd, and Capri Global Capital.
Quadrant Future Tek has distributed 45 lakh equity shares to 22 organizations at a price of ₹290 per share, which is the highest price range, according to the circular.
The Government of India has recognized the need to promote domestic manufacturing and has undertaken multiple initiatives to attract investments and enhance existing manufacturing capabilities through programs like “Make in India" and “Atmanirbhar Bharat Abhiyan."
Quadrant Future Tek has received a substantial order of ₹980 crore that they are yet to fulfil. However, before this, the company’s revenue was relatively minor, observed Kejriwal. While the railway order is significant, execution and delivery will be crucial before making any premature conclusions, he said, adding that it remains necessary to monitor performance post-listing and to observe results over one or two quarters.
The initial public offer of Quadrant Future Tek IPO has been subscribed 86.74 times on the third day of subscription today, at 12:57 IST, as per BSE data.
The initial share sale received bid for 50,30,64,450 shares against 57,99,999 shares on offer, according to BSE.
The portion for retail investors received 190.70 times subscription while the quota for non-institutional investors got subscribed 165.71 times. The qualified institutional buyers (QIBs) part is booked 12.60 times.
Mohit Gulati, the CIO and managing partner of ITI Growth Opportunities Fund, believes that Quadrant Future Tek is emerging as a compelling investment in the railway technology sector, with robust financial performance and significant market potential. The KAVACH project, aimed at enhancing passenger safety and reliability, could be a game-changer for the company's revenue streams, justifying its premium valuation at a P/E ratio of around 42x for FY27, Gulati said.
The public issue consists of fresh issue up to ₹290 Cr. Company proposes to utilize the Net
Proceeds towards: - Funding long-term working capital requirements (Specialty Cable Division):- 150 Cr; Capex for development for Electronic Interlocking System :- 24 Cr; Prepayment of outstanding working capital term loan: - 24 Cr.
On May 1st, 2024, company signed a Memorandum of Understanding (MoU) with RailTel Corporation of India Limited to collaborate on KAVACH, an Automatic Train Protection System for railways in India and abroad. This exclusive partnership allows the company to supply KAVACH equipment as an Original Equipment Manufacturer (OEM). RailTel will ensure its partners do not pursue competing offers.
It will lead stakeholder engagements in Indian Railways and other countries, while the company will handle technology maintenance, adhere to RDSO specifications and provide technical expertise for project execution and KAVACH tenders. The MoU remains in effect unless terminated by either party.
The initial public offer of Quadrant Future Tek IPO has been subscribed 62.85 times on the thir day of subscription today, at 11:09 IST, as per BSE data.
The initial share sale received bid for 36,45,14,400 shares against 57,99,999 shares on offer, according to BSE.
The portion for retail investors received 164.77 times subscription while the quota for non-institutional investors got subscribed 119.60 times. The qualified institutional buyers (QIBs) part is booked 50%.
The company demonstrated strong financial results. Revenue for the company reached ₹1,517.56 million in FY24, representing a compound annual growth rate (CAGR) of 20.46% from ₹1,042.58 million in FY22. EBITDA grew at a CAGR of 89.13%, increasing from ₹95.08 million in FY22 to ₹366.68 million in FY24. Profit after tax (PAT) experienced a significant rise, with a CAGR of 180.84%, climbing from ₹18.94 million in FY22 to ₹146.92 million in FY24, highlighting a considerable improvement in profitability.
The industry forecast indicates a robust growth for the Indian Specialty Cable and Train Control System market projected to expand at a CAGR of 9.8% and 12.7% from CY24E-CY30E period. In the industry the company leads with an EBITDA margin of 24.15% in FY24 and its return ratios are equally competitive. Further, the strategic MoU signed with RailTel Corp. to provide KAVACH coupled with recent order win from CLW of ₹9786.06 million, solidifies the company’s position as a premier OEM. Due to these factors, we recommend the investors to subscribe the issue as a long term investment.
The initial public offer of Quadrant Future Tek IPO has been subscribed 55.55 times on the third day of subscription today, at 10:15 IST, as per BSE data.
The initial share sale received bid for 32,21,61,100 shares against 57,99,999 shares on offer, according to BSE.
The portion for retail investors received 149.67 times subscription while the quota for non-institutional investors got subscribed 105.31 times. The qualified institutional buyers (QIBs) part is booked 48%.
Quadrant Future Tek is a research-oriented company, engaged in developing newgeneration Train Control and Signalling Systems under the KAVACH project of the Indian Railways that offers the highest level of safety and reliability to rail passengers.
Quadrant Future Tek IPO GMP today is +210. This indicates Quadrant Future Tek share price was trading at a premium of ₹210 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Quadrant Future Tek share price is indicated at ₹500 apiece, which is 72.41% higher than the IPO price of ₹290.
Grey market activity over the past 11 sessions indicates that today's IPO GMP is positive and anticipates a successful listing. An expert on investorgain.com claims that the lowest GMP is ₹0 and the highest is ₹210.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
