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PremiumTransrail Lighting IPO Day 3 Highlights: Transrail Lighting IPO was subscribed 81.93 times on the third day of bidding. The retail portion of the public issue was subscribed 22.52 times while the Non Institutional Investors’ (NII) category received 78.3 times bids. However, the Qualified Institutional Buyers (QIB) quota was booked 197.41 times and the Employees category 4.35 times.
The public offering for engineering and construction company Transrail Lighting began on Thursday, December 19, with a price band of ₹410-432 per share. This IPO, which will close on December 23, generated ₹245.97 crore through its anchor book on December 18.
The company's planned IPO includes a new share issuance totaling ₹400 crore along with a sale of 1.01 crore equity shares by its promoter, Ajanma Holdings Private Ltd. Currently, Ajanma Holdings possesses an 83.22 percent stake in the Mumbai-based firm. At the highest point of the price range, the IPO has been valued at ₹839 crore, resulting in a market capitalization of approximately ₹5,600 crore.
Transrail Lighting stands out as a prominent EPC company in India, primarily concentrating on power transmission and distribution. They also operate integrated manufacturing facilities for lattice structures, conductors, and monopoles.
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The geographic split of revenue (as of FY24) is as follows: India (41.5%) and international (58.6%) The company has footprints in 58 countries, including Bangladesh, Kenya, Tanzania, Niger, Nigeria, Mali, Cameroon, Finland, Poland, and Nicaragua, encompassing turnkey EPCs and supply projects.
By December 2024, Transrail Lighting Limited has four manufacturing units located in Vadodara, Gujarat; Deoli, Maharashtra; and two in Silvassa, Dadra and Nagar Haveli. By mid-2024, the company had supplied 1.3 MMT of towers, 194,534 KM of conductors, and 458,705 poles.
1) Slowdown in govt. expenditure in T&D sector may affect the business
adversely.
2) Nearly 80% business of the company comes from govt. clients, any collectability issues can hamper cashflows.
3) The company has significant foreign exposure, any changes in policies or geopolitical issues can pose a threat.
The initial public offer of Transrail Lighting IPO has been subscribed 4% on the first day of subscription today, at 10:09 IST, as per BSE data.
The initial share sale received bid for 5,34,072 shares against 1,39,16,742 shares on offer, according to BSE.
The portion for retail investors received 6% subscription while the quota for non-institutional investors got subscribed 4%. The qualified institutional buyers (QIBs) and employee part is yet to be booked.
Engineering and construction firm Transrail Lighting has secured ₹245.97 crore through its anchor book on December 18. According to the company's filing with the exchange on Wednesday, it has allocated 56,93,832 equity shares to anchor investors at a share price of ₹432.
Notable institutional investors such as Winro Commercial, ICICI Prudential Mutual Fund, Tata Mutual Fund, LIC Mutual Fund, Bandhan Mutual Fund, SBI General Insurance, ITI Mutual Fund, Nuvama, Taurus Flexi Cap Fund, Citrus Global Arbitrage Fund, and BNP Paribas Financial Markets have made investments in the company through the anchor book.
The company plans to raise Rs. 838 cr. with fresh issue of Rs. 400 cr. to be used in WC requirements & capex. At the upper price-band of Rs. 432, the issue is available at P/E of ~25 times against 50-60 times on average of listed peers leaving an opportunity for investors to play the T&D bet. We recommend “SUBSCRIBE" to the IPO.
Transrail Lighting IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors. The employee reservation portion has been reserved equity shares aggregating up to ₹190 million.
Tentatively, Transrail Lighting IPO basis of allotment of shares will be finalised on Tuesday, December 24, and the company will initiate refunds on Thursday, December 26, while the shares will be credited to the demat account of allottees on the same day following refund. Transrail Lighting share price is likely to be listed on BSE and NSE on Friday, December 27.
Transrail Lighting IPO GMP today is +145. This indicates Transrail Lighting share price was trading at a premium of ₹145 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 Transrail Lighting share price is indicated at ₹577 apiece, which is 33.56% higher than the IPO price of ₹432.
Based on the grey market activities from the last nine sessions, the current GMP ( ₹145) indicates a potential decline. The minimum GMP recorded is ₹0, while the maximum stands at ₹145, as per the experts at 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.
