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PremiumQuality Power IPO Day 3 Highlights: The initial public offering of Quality Power Electrical Equipments Ltd, which commenced on Friday, February 14, has sought to navigate through the turbulent market environment, achieving an overall subscription rate of 83% primarily driven by Non-Institutional Investors (NIIs) and Retail investors.
The non-institutional investor quota was subscribed 1.10 times, while the portion for Retail Individual Investors (RIIs) received a subscription rate of 1.07 times. Meanwhile, the segment for Qualified Institutional Buyers (QIBs) saw a subscription level of 62 percent.
The company specializing in energy transmission equipment and technologies has raised more than ₹386 crore from its anchor investors. The Initial Public Offering (IPO) of ₹859 crore is set to close on Tuesday, February 18. The pricing for the Quality Power IPO is established within the range of ₹401 to ₹425 per share.
Quality Power Electrical IPO comprises a fresh issuance of equity shares totaling up to ₹225 crore, along with an offer-for-sale (OFS) of 1.5 crore shares worth ₹634 crore at the upper limit of the price range. This brings the total size of the offering to ₹859 crore.
The funds raised from the new issue will be used for the acquisition of Mehru Electrical and Mechanical Engineers, as well as for financing capital expenditure needs for the purchase of equipment and machinery.
Pantomath Capital Advisors is the exclusive book-running lead manager for the offering.
Stay tuned for more updates
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 1.29x on the third day of subscription today, at 19:00 IST, as per BSE data.
The initial share sale received bid for 1,43,31,330 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 1.83 times subscription while the quota for non-institutional investors has been subscribed 1.45 times and the qualified institutional buyers (QIBs) part is booked 1.03 times.
The firm has consistently grown its revenue and profits. For H1 FY25, QPEEL reported ₹182.72 crore in total income and ₹50.08 crore in net profit. Approximately 80.7% of revenue comes from global markets. The company benefits from significant other income through net monetary gains, primarily from dollar hedging, contributing to its higher PAT relative to EBITDA.
With over 80% of revenue from global markets, QPEEL avoids tender-based businesses, ensuring stability. Quality Power's issue is available at a P/E ratio of 81x based on FY24 earnings, significantly lower than the listed peer average of 276x, partly due to MNCs reporting profits in home markets and supply-demand imbalances spread across geographically.
Despite valuation concerns, given its market position and focus on technological advancements, a SUBSCRIBE for long-term gains is recommended.
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 1.28x on the third day of subscription today, at 16:12 IST, as per BSE data.
The initial share sale received bid for 1,41,68,414 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 1.76 times subscription while the quota for non-institutional investors has been subscribed 1.45 times and the qualified institutional buyers (QIBs) part is booked 1.03 times.
At the upper price band, Quality Power 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 1.15x on the third day of subscription today, at 14:39 IST, as per BSE data.
The initial share sale received bid for 1,27,33,266 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 1.59 times subscription while the quota for non-institutional investors has been subscribed 1.31 times and the qualified institutional buyers (QIBs) part is booked 91%.
The issue is priced at a P/BV of 12.85 based on its NAV of Rs. 33.07 as at H1FY25 and if we attribute FY25 earnings at higher price band of ₹425, it is asking for a P/E of 31x and asking a Market Cap of around ₹ 3291 Cr. Average Industry P/E stands at 267x. The issue appears reasonably priced. Quality Power Electrical Equipments Ltd. is well positioned to capitalize on India's growing energy sector. Looking at all the factors, risks, opportunities and valuation, investors can apply to the issue with Long term horizon.
They are currently operating with three manufacturing facilities, with two in India, located in Sangli, Maharashtra and Aluva, Kerala. The third facility is located in Ankara, Turkey (through acquisition of Endkos).
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 1.01x on the third day of subscription today, at 13:30 IST, as per BSE data.
The initial share sale received bid for 1,12,13,046 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 1.49 times subscription while the quota for non-institutional investors has been subscribed 1.23 times and the qualified institutional buyers (QIBs) part is booked 74%.
Quality Power caters to clients involved in the business of (i) Power transmission (ii) Power distribution and (iii) Power automation. Their end user consists of power utilities, power industries and renewable energy entities.
The rising global demand for electricity, particularly the need to integrate renewable energy into the main grid, is expected to drive growth in the energy transition and power technologies sector. The transmission sector has expanded at a CAGR of 8%, increasing from USD 78,736 million in CY19 to USD 1,05,903 million in CY23.
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 92% on the third day of subscription today, at 12:12 IST, as per BSE data.
The initial share sale received bid for 1,01,78,636 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 1.38 times subscription while the quota for non-institutional investors has been subscribed 1.20 times and the qualified institutional buyers (QIBs) part is booked 62%.
At an upper price band of ₹425, Quality Power Electricals Equipment is valued at a FY 24 PE of 88.5x (Adj. for minority interest) and EV/EBITDA of 86.7x. Over FY22-24, the company’s Revenue/EBITDA/APAT grew at a CAGR of 28.3%/27.8%/50.6% respectively. The ROCE of 15% in FY 24 remains in line with the peer’s average. Based on the reported performance, the business seems to be growing strongly, however we feel the post-IPO valuation for the company seems expensive in the current weak market environment. We thereby assign “Subscribe for Long-Term" rating to the issue.
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 88% on the third day of subscription today, at 10:48 IST, as per BSE data.
The initial share sale received bid for 97,99,556 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 1.27 times subscription while the quota for non-institutional investors has been subscribed 1.15 times and the qualified institutional buyers (QIBs) part is booked 62%.
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.
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).
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.
The energy transmission technology and equipment company Quality Power reported that it has raised over ₹386 crore from anchor investors.
A circular posted on the BSE website stated that the following companies were among those who received shares in the anchor round: LIC Mutual Fund (MF), Bank of India MF, Maybank Securities, Bengal Finance & Investments, Bharat Vaiue Fund, SBI General Insurance, India Inflection Opportunity Fund, Abans Finance, and Kotak Iconic Fund.
Quality Power Electrical Equipments IPO GMP today was ₹0, which meant shares were trading at their issue price of ₹425 with no premium or discount in the grey market according to investorgain.com
According to the grey market activities observed over the past 11 sessions, the current IPO GMP is showing a downward trend and is anticipated to decline further. The minimum GMP recorded is ₹0.00, whereas the maximum GMP reached is ₹135.00, according to experts from investorgain.com.
'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.
