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PremiumQuality Power IPO Day 1 Highlights: The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 62% on the first day of subscription today, as per BSE data.
The initial share sale received bid for 69,24,684 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 57% subscription while the quota for non-institutional investors has been subscribed 82% and the qualified institutional buyers (QIBs) part has been booked 54%.
Despite experiencing a slow beginning amid a tepid market, it performed reasonably well on its initial bidding day compared to other offerings this week. Arun Kejriwal, the founder of Kejriwal Research and Investment Services, pointed out that while Quality may attract better subscription figures compared to Hexaware, although its valuation is far from inexpensive.
The public subscription for Quality Power Electrical Equipments' initial share-sale commenced on Friday, February 14, and will close on Tuesday, February 18. The provider of high-voltage electrical equipment and solutions has successfully secured ₹386.41 crore from 21 institutional investors through the anchor book on Thursday, February 13.
Quality Power IPO price band has been set between ₹401 and ₹425 per share. The IPO consists of a fresh issuance of equity shares worth up to ₹225 crore, along with an offer-for-sale (OFS) of 1.5 crore equity shares, which is valued at ₹634 crore at the highest end of the price range. This brings the total size of the issue to ₹859 crore. As part of the OFS, promoter Chitra Pandyan will be selling shares of the company. The Pandyan family owns a complete 100 percent stake in Quality Power, which is based in Maharashtra.
Quality Power specializes in essential energy transition equipment operating at voltages up to 765kV and offers power technologies. The company supplies high-voltage electrical equipment and solutions to enhance electrical grid connectivity and facilitate energy transition.
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The initial public offer of Quality Power Electrical Equipments IPO was subscribed 62% on the first day of subscription today, as per BSE data. The portion for retail investors received 57% subscription while the quota for non-institutional investors has been subscribed 82% and the qualified institutional buyers (QIBs) part has been booked 54%.
During this period, the company has seen steady growth in its business, driven by an increase in product sales both in the domestic and international markets. This growth has been primarily supported by higher exports of its products.
The company has experienced steady growth, with total operating revenue reaching Rs. 300.6cr, reflecting a CAGR of 28.3%. This strong growth is driven by higher sales of its products, supported by an increase in export sales.
At the upper price band, QPEEL is demanding a EV/S multiple of 5.9x, which is at discount to peer average. Considering its over two decades of experience in the energy transition sector and wide range of products & solutions, we believe the company is well positioned to benefit from the rising demand of energy transition equipments, which would assist in generating a profitable business growth. Thus, we assign a “SUBSCRIBE" rating for the issue.
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 46% on the first day of subscription today, at 15:57 IST, as per BSE data.
The initial share sale received bid for 51,61,182 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 53% subscription while the quota for non-institutional investors has been subscribed 66% and the qualified institutional buyers (QIBs) part has been booked 34%.
The company serves 143 customers across different segments, including power utilities, renewable energy players, and industries such as automobiles, oil and gas, cement, chemicals, renewables, traction and locomotives, steel and metal, and power utilities. Its clientele includes major business conglomerates listed in the Fortune 500 category.
The global transmission line market is poised for a transformative shift as the energy transition and power technologies sector is moving towards more sustainable and efficient energy sources. With the adoption of HVDC and STATCOM technologies is vital for the green energy transition, as they facilitate power evacuation from renewable sources and the efficient and stable integration of renewables into the power grid and Quality Power product portfolio supports these de-carbonization efforts, sustainability and green initiatives.
The company is valued at a PE ratio of 81.9x on the upper price band based on FY24 earnings, which is lower than its peers. Given its strong financial growth, diverse product portfolio and global customer base, the company is well-positioned to achieve sustained growth within the sector. Therefore, we recommend a “SUBSCRIBE" rating for medium to long-term investment.
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 34% on the first day of subscription today, at 14:09 IST, as per BSE data.
The initial share sale received bid for 37,67,894 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 45% subscription while the quota for non-institutional investors has been subscribed 42% and the qualified institutional buyers (QIBs) part has been booked 26%.
Although the company is doing well on financial metrics (Revenue/EBITDA/PAT CAGR of 28.3%/27.8%/14.6% respectively over FY22-FY24) and generates healthy return ratios in the range of 34-36%, we believe the listing gains can be muted due to relatively stretched valuations. Hence, we recommend investors only with long term investment horizon to subscribe to the issue at the cut-off price.
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 15% on the first day of subscription today, at 12:42 IST, as per BSE data.
The initial share sale received bid for 17,15,688 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 38% subscription while the quota for non-institutional investors has been subscribed 32% and the qualified institutional buyers (QIBs) part is yet to be booked.
The firm's product portfolio consists of (a) Power Products, including reactors & line traps, transformers, instrument transformers and (b) Power Quality Systems, including static var compensators (SVC), STATCOM, harmonic filters, capacitor banks, shunt reactor.
The company's listed peers are Transformers & Rectifiers (India) Ltd (with a P/E of 251.51), Hitachi Energy India Ltd (with a P/E of 308.63), and GE Vernova T&D India Ltd (with a P/E of 241.90).
The company has achieved a 28.3% revenue CAGR (FY22-24) with export revenue contributing up to 80.7% (in FY24) and high capital efficiency with ROE of 29.2% and ROCE of 19.2% demonstrating strong market performance.
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 12% on the first day of subscription today, at 11:21 IST, as per BSE data.
The initial share sale received bid for 13,51,792 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 27% subscription while the quota for non-institutional investors has been subscribed 27% and the qualified institutional buyers (QIBs) part is yet to be booked.
The company has a seasoned team which brings extensive industry experience and skilled workforce, enabling the company to capitalize on growth opportunities, acquire companies at strategic pricing driving growth, market expansion and effective project execution to scale stronger growth through its product offerings, unlocks geographical expansion and solidifying leadership in the energy transmission sector in the coming years. Hence, we recommend a SUBSCRIBE to the issue for the long term.
Quality Power's IPO consists of both a fresh issue and an offer for sale (OFS), with the fresh issue valued at ₹225 crore. The OFS portion will include 1.2 crore equity shares offered by promoter Chitra Pandyan.
Based on annualized FY 2025 earnings and fully diluted post –IPO paid up capital, the company is asking for a P/E of 30.6x, which appears reasonable when compared to its listed industry peers. Given its recent strategic growth initiatives like acquisition of Mehru electricals which would allow company to expand its product range especially in 500kV transformers which could strengthens its position in high voltage equipment market, so we believe QPEEL is well-positioned to capitalize on India's evolving energy landscape. Hence, with all attributes we recommend investors to “SUBSCRIBE" the Quality Power Electrical Equipments Ltd IPO for long term perspective.
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 3% on the first day of subscription today, at 10:30 IST, as per BSE data.
The initial share sale received bid for 3,36,258 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 13% subscription while the quota for non-institutional investors has been subscribed 2% and the qualified institutional buyers (QIBs) part is yet to be booked.
The net proceeds from the fresh issue are intended to be used for several purposes, including the payment for acquiring Mehru Electrical and Mechanical Engineers Private Limited; funding the company's capital expenditure for the purchase of plant and machinery; supporting inorganic growth through unspecified acquisitions and other strategic initiatives; as well as covering general corporate needs.
Tentatively, Quality Power IPO's basis of allotment of shares will be finalised on Wednesday, February 19, and the company will initiate refunds on Thursday, February 20, while the shares will be credited to the demat account of allottees on the same day following refund. Quality Power share price is likely to be listed on BSE and NSE on Friday, February 21.
In the IPO, Quality Power has reserved 75% of the shares in the public issue for qualified institutional buyers (QIB), 15% for non-institutional Institutional Investors (NII), and 10% of the offer is reserved for retail investors.
Quality Power IPO GMP today is +14. This indicates Quality Power share price was trading at a premium of ₹14 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 Quality Power share price is indicated at ₹439 apiece, which is 3.29% higher than the IPO price of ₹425.
Grey market activity over the past seven sessions indicates that today's IPO GMP is down and is likely to continue to decline. According to experts on investorgain.com, the lowest GMP is ₹14, and the highest is ₹135.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
