Quality Power Electrical Equipments IPO: Overview

Quality Power Electrical Equipments is an Indian company offering high voltage electrical equipment and solutions for sectors like energy transition, grid connectivity, and power generation. They specialize in products across power generation, transmission, distribution, and automation, serving both domestic and global clients.

The company is offering a Book Built Issue of ₹858.70 crores, comprising a fresh issue of ₹225.00 crores (52.94 lakh shares) and an offer for sale (OFS) of ₹633.69 crores (149.10 lakh shares). The subscription period for the IPO is from February 14, 2025, to February 18, 2025. The allotment will be finalized by February 20, 2025, with shares expected to list on BSE & NSE by February 21, 2025.

Key IPO Details:

• Price Band: ₹401 to ₹425 per share.
• Market Capitalisation: ₹3,291.37 crores (at the upper price band).
• Lot Size: 26 shares (₹11,050 for retail investors).
• HNIs Investment: Minimum investment of ₹2,09,950 for 494 shares.

The IPO is led by Pantomath Capital Advisors with MUFG Intime India as the registrar.

Financial Insights

• Revenue from Operations for FY 2024: ₹1,827.15 million, showing growth from ₹2,117.33 million in FY 2022.
• EBITDA: ₹583.81 million for FY 2024, improving from ₹523.96 million in FY 2022.
• Profit After Tax (PAT): ₹500.78 million for FY 2024, up from ₹422.27 million in FY 2022.

Key Performance Metrics:

• Pre-issue EPS: ₹5.19
• Post-issue EPS: ₹4.83
• Pre-issue P/E Ratio: 81.89x
• Post-issue P/E Ratio: 87.91x (Industry P/E is 22x)
• ROCE (FY24): 19.20%
• ROE (FY24): 19.15%
• RoNW (FY24): 29.15%

Despite a high valuation compared to the industry, the company has shown consistent growth.

IPO Objectives:

Proceeds from the Quality Power Electrical Equipments IPO will be used for:

1. Acquisition of Mehru Electrical and Mechanical Engineers Pvt Ltd (₹1,170 million).
2. Capital expenditure for plant and machinery (₹272.17 million).
3. Inorganic growth and strategic initiatives (general corporate purposes).

Grey Market Premium (GMP) and Subscription Updates:

• The GMP is ₹31, reflecting a 7.29% listing gain expectation.
• As of February 18, 2025, the IPO was subscribed 1.01 times, indicating moderate investor interest.

IPO Allotment Process:

To check the allotment status, visit the registrar’s website starting February 20, 2025, and enter your application number, PAN, or DP Client ID.

Anchor Investors:

Quality Power Electrical Equipments has raised ₹385.41 crores from anchor investors, allocating 90,92,070 shares at ₹425 per share.

Investor Guidance:

• Retail Investors need a minimum investment of ₹11,050 for 26 shares.
• GMP at ₹31 suggests some listing gains, but the high P/E ratio compared to the industry may indicate limited short-term upside.

The Upcoming IPOs in this week and coming weeks are Swasth Foodtech, Beezaasan Explotech, HP Telecom India.

The Current active IPO are Royalarc Electrodes, Tejas Cargo India, Quality Power Electrical Equipments.

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