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PremiumQuality Power IPO Day 2 Highlights: Quality Power Electrical Equipments Ltd's initial public offering received an 83 per cent subscription on its second day of bidding on Monday. The non-institutional investors' category saw a 1.10x subscription rate, while the Retail Individual Investors (RIIs) quota was subscribed 1.07x. The portion for Qualified Institutional Buyers (QIBs) achieved a 62 per cent subscription.
The company, specialising in energy transmission equipment and technologies, raised over ₹386 crore from anchor investors. Quality Power Electrical Equipments IPO, valued at ₹859 crore, is set to close on February 18. The share price is in the range of ₹401-425 each.
The IPO includes a fresh issue of equity shares totaling up to ₹225 crore, in addition to an offer-for-sale (OFS) of 1.5 crore shares estimated at ₹634 crore based on the upper price limit. This brings the total size of the issue to ₹859 crore.
As part of the OFS, promoter Chitra Pandyan is set to sell shares of the company. Pantomath Capital Advisors acts as the sole book running lead manager for the offering.
Stay tuned for more updates
Quality Power IPO Day 2 Live Updates: The IPO of Quality Power was subscribed 87% at the end of the second day of the bidding process on Monday. In the QIB category, the public offer was subscribed 62%. Meawnhile, HNI and retail investor portions sailed through today, garnering 1.10 times and 1.07 times bids, respectively.
Thalavaidurai Pandyan – Chairman and Managing Director, one of the Promoters, has been with the Company since its inception. He holds a diploma in electrical engineering and has 39 years of experience, previously working with Hind Rectifiers Limited and PS Electricals (P) Limited.
Bharanidharan Pandyan – Joint Managing and Whole-time Director, one of the Promoters, with 22 years of experience. He holds a postgraduate degree in family-managed business from S.P. Jain Institute of Management.
Chitra Pandyan – Whole-time Director and one of the Promoters, with 22 years of experience in the Company. She completed her education up to matriculation.
Mahesh Vitthal Saralaya – Whole-time Director, with 18 years of experience. He holds a bachelor’s degree in electrical engineering and previously worked with Shakti Capacitors Private Limited.
Shailesh Kumar Mishra – Independent Director, with 38 years of experience. He holds a degree in electrical engineering and has worked with Solar Energy Corporation of India and Power Grid Corporation of India.
Pournima Suresh Kulkarni – Independent Director, with 17 years of experience. She holds a degree in commerce and is a chartered accountant, previously associated with several co-operative banks.
Rajendra Sheshadri Iyer – Independent Director, with over 24 years of experience. He holds an engineering degree and has worked with ABB, GE Corporate UK, and Gridpro Ventures Private Limited.
Sadayandi Ramesh – Independent Director, with over 40 years of experience in the textiles business. He is the promoter of Pothys Textiles.
Thalavaidurai Pandyan, Chitra Pandyan, Bharanidharan Pandyanand Pandyan Family Trustare the Promoters of our Company. As on the date of this Red Herring Prospectus, our Promoters, together hold 72,149,960Equity Shares, representing 99.99% of the issued, subscribed and paid-up equity share capital of our Company.
2001: Incorporation as a private limited company under the name “Quality Power Electrical Equipments Private Limited".
2011: Acquisition of Endoks Enerji Anonim Şirketi, Turkey, by one of our subsidiaries, i.e., Quality Power Engineering Projects Private Limited.
2019: Acquisition of S&S Transformers & Accessories Private Limited.
2022: Takeover of the business of Electrical Power Equipment Company, Bangalore.
Investment in NebeskieLabs Private Limited by our subsidiary, Quality Power Engineering Projects Private Limited, by purchasing 15.45% of the share capital of Nebeskie Labs Private Limited.
2024: Conversion into a public limited company, under the name “Quality Power Electrical Equipments Limited."
Quality Power IPO was subscribed 81% so far on the second day of the book-building process on Monday. The retail portion was subscribed 99% while the HNI portion was booked 1.06 times. The QIB portion was booked 62% as of 3.45 pm today.
QPEEL 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. Its net margins are higher with respect to the subsidiary’s other income and currency depreciation accounting standards pertaining over the years. With consistent product innovation and a strong order book, the growth rates would continue to be higher in the coming years.
(Source: Reliance Securities)
QPEEL is strategically positioned as an Indian producer of high-voltage power products and power quality systems, with a diversified global customer base of 210+ global clients, including Fortune 500 companies. The company fosters long-term relationships focusing on technology, scale of operations, reliability, and quality in energy projects.
QPEEL has a seasoned team with extensive industry experience and a skilled workforce, enabling the company to capitalize on growth opportunities. It is also well-positioned to acquire companies at strategic pricing, driving growth, market expansion, and effective project execution. This will allow QPEEL to scale stronger growth through its product offerings, unlock geographical expansion, and solidify its leadership in the energy transmission sector in the coming years.
Hence, we recommend a SUBSCRIBE to the issue for the long term.
Quality Power IPO Day 2 Live Updates: The energy transition equipment and power technologies market is poised for significant growth in the coming decades. As governments and businesses around the world intensify their efforts to decarbonize the energy sector, the market for energy transition equipment will continue to expand, driven by technological advancements, supportive policies, and increasing public awareness of the need for climate action.
Quality Power IPO was subscribed 77% so far on the second day of the public offer, with only the HNI portion getting fully booked. Here's how different quotas were subscribed:
QIB: 0.62x
HNI: 1.02x
Retail: 0.87x
QPEEL is a technology-driven company specializing in power products and solutions across the power generation, transmission, distribution, and automation sectors. It provides high-voltage electrical equipment and advanced solutions for grid connectivity and energy transition.
When comparing the company's margins on a restated and proforma basis for FY24 and for H1FY25, there is a noticeable decline in both proforma’s EBITDA and PAT margins.
Following the completion of Mehru’s stake acquisition, the company is expected to see growth in both revenue and profitability. However, margins may come under pressure, as evidenced by the first half of the year’s performance.
At the upper price band, QPEEL is demanding an EV/S multiple of 5.9x, which is at a discount to the 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 for energy transition equipment, which would assist in generating profitable business growth.
Thus, we assign a “SUBSCRIBE" rating for the issue.
Quality Power IPO Day 2 Live Updates: Comparison of accounting ratios with listed industry peers
Quality Power IPO Day 2 Live Updates: “The company is valued at a P/E 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," said BP Wealth.
Quality Power IPO Day 2 Live Updates: Quality Power Electrical IPO was booked 70% on the second day of the bidding process on Monday. Here's how different IPOs were booked:
- QIB: 54%
- NII: 97%
- Retail: 77%
Quality Power IPO Day 2 Live Updates: The Net Proceeds of the Fresh Issue are proposed to be utilized in the following manner:
1. Payment of the purchase consideration for the acquisition of Mehru Electrical and Mechanical Engineers Private Limited;
2. Funding capital expenditure requirements of our Company for purchase of plant and machinery; and
3. Funding inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes.
Source: RHP
Quality Power IPO Day 2 Live Updates: The IPO of Quality Power opened for subscription for the second day on Monday. Investors can apply for the IPO till 5 pm today. The issue will close for subscription tomorrow.
Quality Power IPO Day 2 Live Updates: “The company plans to raise Rs. 225 cr. as a fresh issue, with the intent to deploy the funds towards the Mehru acquisition and capex funding. At the upper band of ₹425/share, the issue is available at a P/E of 31x based on extrapolated earnings of proforma financials. This, according to us, is a fair premium in the context of the company’s growth potential and lean balance sheet. We recommend ‘Subscribe for long-term’ to the issue," said Aditya Birla Capital in the IPO note.
Issue Opens: 14-Feb-25
Issue Closes: 18-Feb-25
Face Value ( ₹): 10
Price Band ( ₹): 401-425
Bid Lot: 26
Issue Size at higher price band ( ₹ Cr): 858.7
Market Cap. @ upper price band ( ₹ Cr): 3,291.4
Listing: NSE/BSE
Quality Power IPO GMP today is +5. This indicates Quality Power share price was trading at a premium of ₹5 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 ₹430 apiece, which is 1.18% higher than the IPO price of ₹425.
According to the grey market activities from the past 10 sessions, the IPO GMP is trending downwards today and is anticipated to decline further. The minimum GMP recorded is ₹5.00, while the maximum GMP stands at ₹135, as per the experts at investorgain.com.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
