Quality Power Electrical Equipments Limited is coming up with its Initial Public Offering (IPO) to raise funds for expansion and acquisitions. This article provides a detailed review of the Quality Power IPO, analyzing its competitive strengths, financials, valuation, risks, and whether investors should subscribe to the issue.
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About Quality Power Electrical Equipments Limited
Established in 2001, Quality Power Electrical Equipments Limited is a key player in energy transition equipment and power technologies. The company provides high-voltage electrical solutions for grid connectivity, specializing in power products across generation, transmission, distribution, and automation.
The company operates manufacturing facilities in Sangli, Maharashtra, and Aluva, Kerala, and has a subsidiary in Turkey, Endoks. With over 20 years of experience, Quality Power serves 210 customers worldwide, including power utilities and renewable energy companies.
Competitive Strengths
- Strong Position in Energy Transition Sector – The company is well-placed to benefit from the global shift towards renewable energy and decarbonization.
- Diverse Customer Base – The company has a strong client portfolio with long-term business relationships.
- Comprehensive Product Portfolio – It offers transformers, reactors, and power quality solutions, catering to both domestic and international markets.
- Strategic Acquisitions – Past acquisitions have strengthened its market position and contributed to revenue growth.
- Robust R&D Capabilities – The company continues to innovate and develop future-ready power solutions.
Quality Power IPO Issue Details
- IPO Opening Date: February 14, 2025
- IPO Closing Date: February 18, 2025
- Price Band: ₹ 401 – ₹ 425 per share
- IPO Size: ₹ 858.70 crores
- Fresh Issue: ₹ 225 crores (0.53 crore shares)
- Offer for Sale (OFS): ₹ 633.70 crores (1.49 crore shares)
- Lot Size: To be announced
- Listing At: BSE, NSE
- Book Running Lead Manager: Pantomath Capital Advisors Pvt Ltd
- Registrar: Link Intime India Pvt Ltd
Financial Performance
| Period | Revenue (₹ Cr) | Net Profit (₹ Cr) | Assets (₹ Cr) |
| FY22 | 211.73 | 42.23 | 252.86 |
| FY23 | 273.55 | 39.89 | 312.24 |
| FY24 | 331.40 | 55.47 | 358.88 |
| H1FY25 | 182.72 | 50.08 | 399.64 |
The company has shown consistent revenue growth, with improving profitability in FY24 and H1FY25.
P/E Ratio and Valuation Compared to Peers
While there could be several positiive factors, investors decision to buy or not for an IPO would depend on the valuations. It could be win if the valuations are low. As per the IPO RHP, we could compute below valuations.
- Pre-IPO P/E Ratio: 55.28x
- Post-IPO P/E Ratio: 32.86x
- Based on last 3 years average EPS of ₹ 3.93 and higher price band of ₹ 425, P/E Works out to be 108x
- Based on CY24 EPS of ₹ 5.2 and higher price band of ₹ 425, P/E Works out to be 81x.
- Based on H1 FY25 EPS, P/E is at 46x.
- There are listed peers like Hitachi Energy trading at P/E 308x (Highest) and GE Vernona at P/E 242x (Lowest) and industry average is 267x.
- Hence Quality IPO Price is attractively priced.
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Objects of the IPO
The company plans to utilize the IPO proceeds for:
- Acquisition of Mehru Electrical and Mechanical Engineers Pvt Ltd.
- Expansion of manufacturing capacity by purchasing new machinery.
- Funding future acquisitions and strategic initiatives.
- General corporate purposes.
Reasons to Invest in Quality Power IPO
✅ Growing Renewable Energy Demand: The company’s products align with the global energy transition.
✅ Strong Financials: Revenue and profit growth indicate a positive trajectory.
✅ Diversified Business Model: Wide range of products catering to multiple industries.
✅ Expansion Plans: Strategic acquisitions and facility expansions could drive future growth.
Risk Factors to Consider
❌ Market Dependency: Business is linked to government infrastructure spending and power sector trends.
❌ Competition: Faces strong competition from established players in the electrical equipment market.
❌ Promoter Shareholding Drop: Post-IPO, promoter holding will reduce significantly.
How to Apply for Quality Power IPO?
- Investors can apply through online platforms like Zerodha, Upstox, AngelOne, and ICICI Direct.
- ASBA (Application Supported by Blocked Amount) via net banking is available.
- UPI-based applications can be done through apps like Paytm Money, Groww, and PhonePe.
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Quality Power IPO Review – Should You Invest or Avoid?
Quality Power presents a strong growth opportunity, backed by its established presence in the power sector, diversified product portfolio, and robust financials. However, investors should consider the risks associated with the business. Given its long-term potential and expansion plans, investors with a high-risk appetite may consider subscribing, while conservative investors may wait for better pricing post-listing.
Disclaimer: This article is for educational purposes only and does not constitute as investment advice. Please consult your financial advisor before you invest in such IPOs or Stocks.
What is the Quality Power IPO price band?
The IPO price band is set at ₹ 401–₹ 425 per share.
What is the IPO subscription date?
The IPO will open on February 14, 2025, and close on February 18, 2025.
How much is the Grey Market Premium (GMP)?
As of now, the GMP is approximately ₹ 40–₹50 per share.
Is Quality Power IPO good for listing gains?
Considering the GMP and market conditions, moderate listing gains are expected.
When will this IPO be listed?
The IPO is expected to be listed on BSE and NSE on February 21, 2025.
What could be Quality Power IPO Listing Price?
While the IPO price band is at Rs 401 to Rs 425 based on the GMP, it is expected to list 10% higher than the IPO price.
Is this IPO good or bad for investment?
While there are several positiive factors, investors should consider major risks including industry competition, and dependency on government spending before making investment decision.
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