Quality Power Electrical Equipments Limited is gearing up to launch its Initial Public Offering (IPO) on February 14, 2025, with the subscription window closing on February 18, 2025. This IPO is a strategic move by the company to fund its expansion plans and potential acquisitions. Established in 2001, Quality Power has carved a niche in providing high-voltage electrical equipment and solutions essential for electrical grid connectivity and the ongoing energy transition. The company operates multiple manufacturing facilities in India, including locations in Sangli, Maharashtra, and Aluva, Kerala. Additionally, through its subsidiary, Endoks Enerji, the company has expanded its footprint to Turkey, offering energy solutions specializing in smart grid technologies and power quality management.
Quality Power IPO Dates
Investors should be mindful of the following key dates associated with the Quality Power IPO:
- IPO Open Date: February 14, 2025
- IPO Close Date: February 18, 2025
- Basis of Allotment Announcement: February 19, 2025
- Initiation of Refunds: February 20, 2025
- Credit of Shares to Demat Account: February 20, 2025
- IPO Listing Date: February 21, 2025
- Listing on Exchange: BSE and NSE
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Quality Power IPO Details: Issue Size
The Quality Power IPO aims to raise approximately ₹858.70 crores. This comprises a fresh issue of shares worth ₹225 crores and an offer for sale (OFS) of 1.49 crore equity shares by the promoter, Chitra Pandyan. The price band for the IPO is set between ₹401 and ₹425 per share.
Quality Power IPO Details: Proceeds Usage
The net proceeds from the fresh issue are planned to be utilized for the following purposes:
- Acquisition of Mehru Electrical and Mechanical Engineers Private Limited: A significant portion of the funds, amounting to ₹117 crores, is allocated for this acquisition to enhance the company’s product offerings and market reach.
- Purchase of Plant and Machinery: Approximately ₹27 crores will be invested in acquiring new plant and machinery to bolster manufacturing capabilities.
- Funding Inorganic Growth: The company intends to allocate funds for future acquisitions and other strategic initiatives to drive growth.
- General Corporate Purposes: The remaining proceeds will be used for general corporate activities to support the company’s operations and expansion plans.
Quality Power Electrical Equipments Limited IPO: Reservations Details
The Quality Power IPO shareholder quota has designated quotas for different categories of investors:
- Qualified Institutional Buyers (QIB): 75% of the offer is reserved for QIBs.
- Non-Institutional Investors (NII): 15% of the offer is allocated to NIIs.
- Retail Individual Investors (RII): 10% of the offer is set aside for retail investors.
Quality Power IPO Lot Size
Investors can bid for a minimum of 26 shares and multiples of them. The table below represents the lowest and maximum investment by retail investors and HNIs in terms of shares and amounts.
| Investor Type | Application Lots | Shares | Amount (in ₹) |
|---|---|---|---|
| Retail (Min) | 1 | 26 | 11,050 |
| Retail (Max) | 18 | 468 | 1,98,900 |
| S-HNI (Min) | 19 | 494 | 2,09,950 |
| S-HNI (Max) | 90 | 2,340 | 9,94,500 |
| B-HNI (Min) | 91 | 2,366 | 10,05,550 |
Quality Power IPO Promoter Holding
The promoters of the company include Thalavaidurai Pandyan, Chitra Pandyan, Bharanidharan Pandyan, and the Pandyan Family Trust.
- Pre-Issue Shareholding: 100.00%
- Post-Issue Shareholding: 73.91%
Quality Power Electrical Equipments Limited IPO: Company Overview
Quality Power Electrical Equipments Limited specializes in providing high-voltage electrical equipment and solutions that are pivotal for electrical grid connectivity and facilitating the energy transition. The company’s product portfolio includes transformers, reactors, and power quality solutions, catering to both domestic and international markets. With over two decades of experience, Quality Power has established a strong presence in the energy sector, serving a diverse clientele that includes power utilities, industries, and renewable energy entities.
The company’s commitment to innovation and quality has enabled it to expand its operations beyond India, with a notable presence in Turkey through its subsidiary, Endoks Enerji. Investors should carefully analyze the Quality Power IPO valuation to determine if the pricing aligns with the company’s financial performance and market position. A thorough review of the Quality Power IPO valuation can help assess potential growth and return on investment.
Financial Performance of Quality Power Electrical Equipments Limited IPO
An analysis of Quality Power’s financial performance over recent years is as follows:
(Restated Consolidated Figures in ₹ Crores)
| Particulars | 30 Sep 2024 | 31 Mar 2024 | 31 Mar 2023 | % Change (FY24 – FY23) |
|---|---|---|---|---|
| Assets | 399.64 | 358.88 | 312.24 | 14.94% |
| Revenue | 182.72 | 331.40 | 273.55 | 21.15% |
| Profit After Tax | 50.08 | 55.47 | 39.89 | 39.06% |
| Net Worth | 238.63 | 190.33 | 175.66 | 8.35% |
| Total Borrowing | 25.55 | 38.28 | 10.61 | 260.79% |
Key Financial Analysis:
- Consistent Growth in Assets: The company’s total assets increased by 14.94% from ₹312.24 Cr in FY23 to ₹358.88 Cr in FY24. This reflects a strong asset base and expansion efforts.
- Revenue Growth: Revenue grew from ₹273.55 Cr in FY23 to ₹331.40 Cr in FY24, marking a 21.15% increase in a year. This highlights the company’s ability to scale its operations effectively.
- Profitability: Profit After Tax (PAT) rose 39.06%, from ₹39.89 Cr in FY23 to ₹55.47 Cr in FY24. This indicates efficient cost management and revenue optimization.
- Strong Net Worth: The company’s net worth increased by 8.35% in a year, demonstrating financial stability.
- Surge in Borrowings: Total borrowing jumped 260.79%, from ₹10.61 Cr in FY23 to ₹38.28 Cr in FY24. This suggests increased leverage, likely for expansion, but also adds financial risk.
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Peer Comparison of Quality Power Electrical Equipments Limited IPO
In evaluating the investment potential of Quality Power Electrical Equipments Limited’s IPO, it’s essential to compare the company’s financial metrics with those of its industry peers. This comparison provides insight into the company’s market position and operational efficiency.
(As of March 28, 2024)
| Company Name | EPS (Basic) | EPS (Diluted) | NAV per Share (₹) | P/E (x) | RoNW (%) |
|---|---|---|---|---|---|
| Quality Power Electrical Equipments Ltd | 5.19 | 5.19 | 26.38 | 55.28 | 29.15 |
| Transformers & Rectifiers (India) Ltd | 3.24 | 3.24 | 39.49 | 251.51 | 8.35 |
| Hitachi Energy India Ltd | 38.64 | 38.64 | 320.86 | 308.63 | 12.04 |
| GE T&D India Ltd | 7.07 | 7.07 | 48.54 | 241.9 | 14.57 |
Peer Analysis – Key Takeaways:
- Earnings Per Share (EPS): Quality Power IPO has an EPS of ₹5.19, which is lower than Hitachi Energy (₹38.64) and GE T&D (₹7.07) but higher than Transformers & Rectifiers (₹3.24). A lower EPS may indicate lower profitability per share compared to competitors.
- Net Asset Value (NAV) Per Share: Quality Power has a NAV of ₹26.38, significantly lower than Hitachi Energy (₹320.86), GE T&D (₹48.54), and Transformers & Rectifiers (₹39.49). This suggests that the company’s book value per share is on the lower end among peers.
- Price-to-Earnings (P/E) Ratio: P/E ratios for peers like Hitachi Energy (308.63) and GE T&D (241.9) indicate high valuations. The pre-IPO P/E ratio for Quality Power is lowest which is 55.28.
- Return on Net Worth (RoNW): Quality Power’s RoNW stands at 29.15%, which is higher than all listed peers. This indicates strong efficiency in generating returns on shareholder investments.
Quality Power IPO Risk Factors
Investing in the Quality Power IPO entails several risks that potential investors should carefully consider:
- High Dependence on International Markets: A significant portion of Quality Power’s revenue, approximately 76%, is derived from international operations. This heavy reliance exposes the company to geopolitical risks, foreign exchange fluctuations, and varying regulatory environments.
- Expansion Risks: The company’s plans for expansion, including the acquisition of Mehru Electrical and Mechanical Engineers Private Limited, involve substantial capital expenditure. If these expansions do not yield the anticipated benefits, it could adversely affect the company’s financial health.
- Market Reliance: Quality Power’s business is closely tied to the HVDC and FACTS markets. Any downturn or reduced investment in these sectors could negatively impact the company’s revenue streams.
- Operational Risks: The company operates manufacturing facilities in Sangli, Maharashtra, and Aluva, Kerala. Any disruptions, whether due to natural disasters, technical failures, or labor issues, could impede production and affect financial performance.
- Supply Chain Vulnerabilities: Delays in the supply chain or fluctuations in raw material costs can erode profit margins and disrupt production schedules.
Quality Power IPO Details: Contact Information
For further inquiries or detailed information, interested parties can reach out to the company’s registrar:
- Registered & Corporate Office: Plot No. L-61, M.I.D.C Kupwad Block, Sangli – 416 436, Maharashtra, India
- Contact Person: Deepak Ramchandra Suryavanshi (Company Secretary & Compliance Officer)
Contact Details:
- Email: investorgrievance@qualitypower.co.in
- Telephone: +91 233 264 5432
- Website: www.qualitypower.com
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Frequently Asked Questions – FAQs
1. What is the primary business of Quality Power Electrical Equipments Limited?
Quality Power specializes in providing high-voltage electrical equipment and solutions for electrical grid connectivity and energy transition. Their products cater to power generation, transmission, distribution, and automation sectors.
2. What are the key Quality Power IPO dates?
The IPO opens on February 14, 2025, and closes on February 18, 2025. The basis of allotment is expected on February 19, 2025, and the listing is planned for February 21, 2025.
3. How will the company utilize the funds raised from the IPO?
The net proceeds from the IPO will be mainly used for the acquisition of Mehru Electrical and Mechanical Engineers Private Limited and funding capital expenditure for purchasing plant and machinery.
Reference:
https://www.sebi.gov.in/filings/public-issues/feb-2025/quality-power-electrical-equipments-limited-rhp_91767.html
Author: All Content is verified by SMC Global Securities.
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