The Quality Power Electrical Equipments IPO is one of the key public offerings in February 2025, with the company raising ₹858.70 Crores. The offer consists of a fresh issue of ₹225 Crores through 52.94 Lakh shares and an offer for sale amounting to ₹633.69 Crores through 149.10 Lakh shares. The IPO's subscription period opened on February 14, 2025, and will close on February 18, 2025, with shares expected to list on the BSE & NSE by February 21, 2025.

The share price band for this IPO is ₹401 to ₹425 per equity share. If the upper price band of ₹425 is achieved, the company’s market capitalisation at listing will be ₹3,291.37 Crores. For investors, the lot size is 26 shares, with a minimum investment of ₹11,050 for retail investors. High-net-worth individuals (HNIs) will need to invest a minimum of ₹2,09,950 for 494 shares (19 lots).

The Grey Market Premium (GMP) is currently ₹31, reflecting a 7.29% potential gain over the IPO price, although the GMP is speculative and not a guaranteed indicator of listing performance. Investors should be cautious, as the Grey Market Premium is not a reliable price discovery tool but rather a reflection of demand in the unorganised market.

As of February 18, 2025, the IPO's subscription status has reached 1.29 times by the final day of subscription, indicating healthy investor interest. The anchor investors have committed ₹385.41 Crores, purchasing 90,92,070 equity shares at ₹425 per share. These investors are allocated shares from the Qualified Institutional Buyers (QIBs) portion of the offer, which highlights institutional confidence in the company.

Objectives of the IPO include utilizing the proceeds to fund the acquisition of Mehru Electrical and Mechanical Engineers Private Limited, purchase new plant and machinery, and support inorganic growth through future acquisitions. These goals suggest a focused strategy for expanding the company's reach and capabilities in the critical energy transition equipment sector.

The company has demonstrated steady growth in its financial performance over recent years. For the period ending September 30, 2024, it reported revenues of ₹1,827.15 Million, with an EBITDA of ₹583.81 Million and a Profit After Tax (PAT) of ₹500.78 Million. Over the past few years, its financials have shown positive growth trends, with a Return on Capital Employed (ROCE) of 19.20% and a Return on Equity (ROE) of 19.15% for FY24. The pre-issue EPS stands at ₹5.19, while the post-issue EPS is expected to be ₹4.83 for FY24, making the IPO relatively fairly priced despite the high P/E ratio of 81.89x (pre-issue) and 87.91x (post-issue) compared to the industry P/E of 22x.

While the IPO shows promise, experts recommend avoiding the IPO for listing gains, given the GMP trends and the relatively high valuation. The P/E ratios suggest that the stock might be priced at a premium, and investors should assess long-term growth prospects rather than relying on short-term gains from listing.

For those considering applying for the IPO, the allotment date is set for February 20, 2025, with status available on the registrar’s website. Investors can check their allotment status by entering their application number, PAN, or DP Client ID on the registrar’s website.

In conclusion, the Quality Power Electrical Equipments IPO offers a unique investment opportunity in a growing sector but carries higher risks due to the valuation and subscription trends. Investors should carefully evaluate the company's financial health, its objectives for the IPO proceeds, and its growth prospects in the power sector.

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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