Quality Power IPO Day 3 Live Updates: The initial public offering of Quality Power Electrical Equipments Ltd, which commenced on Friday, February 14, has sought to navigate through the turbulent market environment, achieving an overall subscription rate of 83% primarily driven by Non-Institutional Investors (NIIs) and Retail investors.
The non-institutional investor quota was subscribed 1.10 times, while the portion for Retail Individual Investors (RIIs) received a subscription rate of 1.07 times. Meanwhile, the segment for Qualified Institutional Buyers (QIBs) saw a subscription level of 62 percent.
The company specializing in energy transmission equipment and technologies has raised more than ₹386 crore from its anchor investors. The Initial Public Offering (IPO) of ₹859 crore is set to close on Tuesday, February 18. The pricing for the Quality Power IPO is established within the range of ₹401 to ₹425 per share.
Quality Power Electrical IPO comprises a fresh issuance of equity shares totaling up to ₹225 crore, along with an offer-for-sale (OFS) of 1.5 crore shares worth ₹634 crore at the upper limit of the price range. This brings the total size of the offering to ₹859 crore.
The funds raised from the new issue will be used for the acquisition of Mehru Electrical and Mechanical Engineers, as well as for financing capital expenditure needs for the purchase of equipment and machinery.
Pantomath Capital Advisors is the exclusive book-running lead manager for the offering.
Stay tuned for more updates
Quality Power IPO Day 3 Live Updates: Issue booked 92% so far
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 92% on the third day of subscription today, at 12:12 IST, as per BSE data.
The initial share sale received bid for 1,01,78,636 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 1.38 times subscription while the quota for non-institutional investors has been subscribed 1.20 times and the qualified institutional buyers (QIBs) part is booked 62%.
Quality Power IPO Day 3 Live Updates: Key Risks
- Delay, shortage, or disruption in supply of raw materials: The company follow just in time and lean operating processes for procurement of raw materials. Any kind of delay, shortage, or disruption in the supply chain of raw materials might affect the operations, leading to penalty or cancellation of order.
- High capital intensive business: Capital goods supplier business requires high amount of WC capital to effectively run their business.
Quality Power IPO Day 3 Live Updates: Check out GEPL’s Insights & Investment Thesis
- Based on the FY24 earnings relative to the company’s post-IPO paid-up equity capital, the issue is priced at a P/E ratio of 59x. We believe that the company is overly valued as the compared to its earnings growth. Therefore, we recommend a “Avoid” rating for the issue.
- Quality Power Electrical Equipments Ltd achieved a healthy financial growth with topline and bottom line increasing by 28% and 15% over the last two years driven by the focus on exports and increased demand.
Quality Power IPO Day 3 Live Updates: Here’s what Indsec Securities says about the issue
At an upper price band of ₹425, Quality Power Electricals Equipment is valued at a FY 24 PE of 88.5x (Adj. for minority interest) and EV/EBITDA of 86.7x. Over FY22-24, the company’s Revenue/EBITDA/APAT grew at a CAGR of 28.3%/27.8%/50.6% respectively. The ROCE of 15% in FY 24 remains in line with the peer’s average. Based on the reported performance, the business seems to be growing strongly, however we feel the post-IPO valuation for the company seems expensive in the current weak market environment. We thereby assign “Subscribe for Long-Term” rating to the issue.
Quality Power IPO Day 3 Live Updates: Issue booked 88% so far
The initial public offer of Quality Power Electrical Equipments IPO has been subscribed 88% on the third day of subscription today, at 10:48 IST, as per BSE data.
The initial share sale received bid for 97,99,556 shares against 9,14,23,354 shares on offer, according to BSE.
The portion for retail investors received 1.27 times subscription while the quota for non-institutional investors has been subscribed 1.15 times and the qualified institutional buyers (QIBs) part is booked 62%.
Quality Power IPO Day 3 Live Updates: IPO details
Quality Power’s IPO consists of both a fresh issue and an offer for sale (OFS), with the fresh issue valued at ₹225 crore. The OFS portion will include 1.2 crore equity shares offered by promoter Chitra Pandyan.
Quality Power IPO Day 3 Live Updates: Check out listed peers
The company’s listed peers are Transformers & Rectifiers (India) Ltd (with a P/E of 251.51), Hitachi Energy India Ltd (with a P/E of 308.63), and GE Vernova T&D India Ltd (with a P/E of 241.90).
Quality Power IPO Day 3 Live Updates: IPO reservation
In the IPO, Quality Power has reserved 75% of the shares in the public issue for qualified institutional buyers (QIB), 15% for non-institutional Institutional Investors (NII), and 10% of the offer is reserved for retail investors.
Quality Power IPO Day 3 Live Updates: All you need to know about anchor investors
The energy transmission technology and equipment company Quality Power reported that it has raised over ₹386 crore from anchor investors.
A circular posted on the BSE website stated that the following companies were among those who received shares in the anchor round: LIC Mutual Fund (MF), Bank of India MF, Maybank Securities, Bengal Finance & Investments, Bharat Vaiue Fund, SBI General Insurance, India Inflection Opportunity Fund, Abans Finance, and Kotak Iconic Fund.
Quality Power IPO Day 3 Live Updates: Key Strategies Implemented by Company
- Focus on growth through organic and inorganic acquisitions.
- Continue to focus on research and development and engineering capabilities to develop innovative systems and solutions, as well as improve manufacturing efficiencies.
- Expand its operating facilities and increase its operating capacity.
- Harness industry growth in the energy transition sector and grow its operations.
Quality Power IPO Day 3 Live Updates: Key dates to know
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Quality Power IPO Day 3 Live Updates: Here’s what Quality Power IPO GMP hints ahead of third bidding day
Quality Power Electrical Equipments IPO GMP today was ₹0, which meant shares were trading at their issue price of ₹425 with no premium or discount in the grey market according to investorgain.com
According to the grey market activities observed over the past 11 sessions, the current IPO GMP is showing a downward trend and is anticipated to decline further. The minimum GMP recorded is ₹0.00, whereas the maximum GMP reached is ₹135.00, according to experts from 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.
