Quality Power Electrical Equipments is an Indian company that has garnered global attention for its high voltage electrical equipment and solutions for the energy transition and power technologies. With a focus on providing products and services for electrical grid connectivity, the company operates across the power generation, transmission, distribution, and automation sectors. As the company continues to serve critical energy needs, its IPO (Initial Public Offering) has opened to the public with a book built issue amounting to ₹858.70 Crores. The IPO consists of a fresh issue of 52.94 lakh shares worth ₹225 Crores and an offer for sale (OFS) of 149.10 lakh shares totaling ₹633.69 Crores. The subscription period began on February 14, 2025, and will close on February 18, 2025, with the allotment date scheduled for February 20, 2025, and the shares expected to list on the BSE & NSE on February 21, 2025.

The IPO price band for the Quality Power Electrical Equipments IPO is set between ₹401 and ₹425 per equity share, with the lot size of 26 shares. For retail investors, the minimum investment required is ₹11,050, while High-Net-Worth Individuals (HNIs) need to invest in at least 19 lots (494 shares), amounting to ₹2,09,950. The company's market capitalization at the upper price band of ₹425 per share is estimated to be ₹3,291.37 Crores.

As of February 14, 2025, the IPO subscription status shows a 0.62 times subscription on the first day, with a Grey Market Premium (GMP) of ₹31 per share, indicating a 7.29% listing gain expectation. However, it’s important to note that Grey Market Premium is based on unregulated market demand and cannot fully determine the real price movement upon listing.

Quality Power Electrical Equipments has raised ₹385.41 Crores from Anchor Investors at the upper price of ₹425 per share, showing strong investor confidence in the IPO. The GMP suggests positive sentiment towards the listing, but prospective investors should assess the company’s financial performance before deciding to invest.

For the FY24, the company posted revenues of ₹1,827.15 Million, with an EBITDA of ₹583.81 Million and Profit after Tax (PAT) of ₹500.78 Million, reflecting steady growth over the past few years. The pre-issue EPS stands at ₹5.19, and the post-issue EPS is estimated at ₹4.83, indicating the company’s earnings potential in a competitive market. The P/E ratio for the IPO is at a high of 81.89x, significantly above the industry average of 22x, which raises concerns about overvaluation.

Despite these concerns, the company’s Return on Equity (ROE) and Return on Capital Employed (ROCE) are strong, at 19.15% and 19.20% respectively for FY24. However, with the high valuation and premium pricing, experts recommend caution in investing for listing gains. Based on the current data and market sentiments, it is suggested that investors carefully consider the company’s financial health and its future growth prospects before making an investment decision.

The IPO review for Quality Power Electrical Equipments indicates that while the company’s sector is promising, the high P/E ratio and GMP suggest that the IPO is fairly priced. Investors may want to avoid this IPO if their primary goal is to secure listing gains, and instead focus on long-term investment strategies after the stock has listed.

The Upcoming IPOs in this week and coming weeks are Royalarc Electrodes Limited, Tejas Cargo India Limited, Quality Power Electrical Equipments.

The Current active IPO are  L.K. Mehta, Shanmuga Hospital, PS Raj Steels, Voler Car, Maxvolt Energy, Hexaware Technologies.

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