Quadrant Future Tek Ltd, a leading player in the railway signaling and train control systems industry, is all set to launch its Initial Public Offering (IPO). With a focus on modernizing railway infrastructure, this IPO offers investors an opportunity to be part of a rapidly growing sector. In this detailed review, we’ll cover everything you need to know about the Quadrant Future Tek IPO, including company details, IPO specifics, financials, peer comparison, reasons to invest, risks, how to apply, and our final review.
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About Quadrant Future Tek Ltd.
Founded over a decade ago, Quadrant Future Tek Ltd has emerged as a pioneer in providing advanced signaling systems for railway networks. The company’s innovative solutions, including electronic interlocking systems and centralized traffic control, have revolutionized railway safety and efficiency.
Quadrant Future Tek primarily caters to domestic railway projects but has recently ventured into international markets, showcasing its technological prowess. With the government’s push for railway modernization, the company is well-positioned to benefit from increased investments in infrastructure.
Quadrant Future Tek IPO Details
Here are the key details of the IPO:
- IPO Opening Date: January 7, 2025
- IPO Closing Date: January 9, 2025
- Issue Size: ₹290 Crore (Fresh Issue)
- Face Value: ₹10 per share
- Price Band: ₹275 to ₹290 per share
- Market Lot: 50 shares
- Listing At: NSE and BSE
- Allotment Date: The basis of allotment is scheduled for January 10, 2025.
- Listing Date: Shares are expected to be listed on NSE and BSE on January 14, 2025
Competitive Strength:
- The Company is engaged in the innovation and technological development of Automatic Train Protection Systems.
- Entered an exclusive Memorandum of Understanding with RailTel to pursue KAVACH opportunities in Indian Railways and other countries’ railways.
- In-house design and product development capabilities powering our Rail Signalling Products & Solutions.
- Advanced cable manufacturing technology that meets strict standards for Railways, Naval Defence, Renewable Energy, and Electric Vehicle sectors.
- Advanced manufacturing facilities with a diverse range of power and control cables with a focus on innovation and cost competitiveness.
Utilization of Funds / IPO Objective
- Funding long-term working capital requirements of the Company;
- Capital expenditure for the development of Electronic Interlocking System;
- Prepayment or repayment of all or a portion of outstanding working capital term loan availed by the Company; and
- General corporate purposes.
Financial Performance
Quadrant Future Tek has demonstrated steady growth in revenues and profitability over the past few years. Below is a snapshot of the company’s financials:
| Period Ended | Assets (₹ Cr) | Revenue (₹ Cr) | Profit After Tax (₹ Cr) | Net Worth (₹ Cr) | Reserves and Surplus (₹ Cr) | Total Borrowing (₹ Cr) |
| 30-Sep-24 | 149.66 | 65.14 | -12.11 | 34.18 | 4.18 | 98.01 |
| 31-Mar-24 | 142.82 | 151.82 | 14.71 | 44.11 | 34.11 | 81.61 |
| 31-Mar-23 | 118.82 | 152.95 | 13.90 | 29.42 | 19.42 | 74.00 |
| 31-Mar-22 | 112.77 | 104.29 | 1.94 | 15.61 | 5.61 | 80.68 |
The company’s financials show a mixed performance. While it achieved significant profitability in FY23 and FY24, the negative PAT in the first half of FY24 is a concern. When I read the Quadrant Future Tek IPO RHP Prospectus on page no.42, I could see the comment indicated as “Loss in the six months period ended September 30, 2024 is on account of expenses for Train Control & Signalling division now being charged to profit and loss account since the capitalization of intangible asset created for development of Kavach System by the Company”.
Key Performance Indicators
The market capitalization of Quadrant Future Tek IPO is Rs 1160.00 Cr. Here are the KPIs for period ending 31-March-2024,
| KPI | Values |
| ROE | 33.41% |
| ROCE | 26.12% |
| Debt/Equity | 1.86 |
| RoNW | 33.41% |
| PAT Margin | 9.68 |
| Price to Book Value | 19.73 |
P/E Ratio and Peer Comparison
Based on the upper price band of ₹290, Quadrant Future Tek’s post-issue P/E ratio is 59.1x, calculated on its FY24 EPS of ₹4.9. Given below is a comparison of P/E ratios among industry peers:
- Polycab India: 64.85x
- KEI Industries: 48.34x
- Havells India: 69.42x
At 59x, Quadrant Future Tek is fully priced compared to its peers.
One should note that for H1 FY25 company incurred loss, hence P/E ratio cannot be ascertained
Reasons to Invest in Quadrant Future Tek IPO
- Strong Industry Tailwinds: With the government prioritizing railway modernization, the demand for advanced signaling systems is expected to grow exponentially.
- Technological Leadership: Quadrant Future Tek’s focus on R&D ensures it remains ahead of competitors in innovation.
- Improved Profitability: The company’s financials show consistent revenue growth and better profit margins, making it a fundamentally strong candidate.
- Diversified Product Portfolio: Its offerings cater to various aspects of railway signaling, reducing dependency on a single product line.
Risk Factors
While Quadrant Future Tek shows promising future ahead, there are certain risks to consider:
- Client Concentration: A significant portion of the company’s revenue comes from a few clients, posing a concentration risk.
- Regulatory Hurdles: The company operates in a highly regulated environment, and any policy changes could impact operations.
- Technological Obsolescence: Rapid advancements in technology require constant innovation, which may strain resources.
- Debt Levels: Although part of the IPO proceeds will be used to repay debt, the company’s current liabilities are relatively high.
How to Apply for Quadrant Future Tek IPO?
You can apply for this IPO through the following methods:
- ASBA (Application Supported by Blocked Amount): Use your bank’s net banking platform to apply under the ASBA facility.
- UPI-Based Applications: Apply via broker platforms like Zerodha, Groww, or Upstox using UPI for payment.
- Offline Applications: Obtain and submit physical application forms through registered brokers or syndicate members.
Is there any GMP available for Quadrant Future Tek IPO?
As on the date of writing the article, we could not see any Grey Market Premium Price available for this IPO.
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Should You Invest in Quadrant Future Tek IPO?
Quadrant Future Tek IPO offers a unique opportunity to invest in a company operating in a niche yet rapidly growing sector. The IPO is fully priced.
However, the negative PAT in the first half of FY25 raises concerns about the company’s ability to maintain consistent profitability. Investors should carefully evaluate this risk.
This IPO appears to be a good addition to the portfolio for long-term gains, provided you have a higher risk tolerance.
Disclaimer: The above article is for educational purposes only and should not be considered as investment advice. Please consult a financial advisor before making any investment decisions.
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