Quality Power Equipment Limited is devising its first public offering (IPO) to raise funds for expansion and acquisitions. This article provides a detailed review of High quality power IPOits competitiveness, finance, valuation, risk, and whether investors should subscribe to this issue.
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Limited quality electric equipment
Founded in 2001, Quality Power Electrical Equipment Limited is a key player in energy transition equipment and power technology. The company offers high voltage electrical solutions for grid connections and specializes in power products across generations, transmissions, distribution and automation.
The company operates manufacturing facilities in Sangri, Maharashtra and Aruba, Kerala, and has a subsidiary in Enduk, Turkey. With over 20 years of experience, our high quality power serves 210 customers around the world, including power companies and renewable energy companies.
Competitiveness
- Strong position in the energy transition sector – The company is well suited to benefit from a global shift towards renewable energy and decarbonization.
- A diverse customer base – The company has a strong client portfolio with long-term business relationships.
- Comprehensive Product Portfolio – Provides transformer, nuclear reactor and power quality solutions, covering both domestic and international markets.
- Strategic Acquisitions – Past acquisitions have strengthened the market position and contributed to revenue growth.
- Robust R&D features – The company continues to innovate and develop solutions that are ready for the future.
Details of quality power IPO issues
- IPO opening date: February 14, 2025
- IPO deadline: February 18, 2025
- Price band: 401 – £425 per share
- IPO size: £858.70 crore
- Fresh issues: £225 crore (0.53 crore shares)
- Sales Offer (OFS): £633.70 crore (1.49 crore s.)
- Lot size: It will be announced
- list: 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 improved profitability for FY24 and H1FY25.
Comparing with P/E ratio and rating
There may be some positive factors, but investor decisions on whether to buy an IPO will depend on valuation. If the rating is low, you win. Follow IPO RHPyou can calculate the following ratings:
- IPO PRE-IPO P/E ratio: 55.28X
- P/E ratio after IPO: 32.86x
- Based on a high-priced band of £425 with an average EPS of £3.93 or less over the last three years, the P/E is 108X
- Based on a CY24 EPS below £5.2 and a higher price range of £425, the P/E is now 81x.
- Based on H1 FY25 EPS, the P/E is 46X.
- There are listed peers like the P/E 308X (highest) Hitachi Energy Trading and the P/E 242X (lowest) Ge Vernona, with an industry average of 267 times.
- Therefore, the price at a high quality IPO price is attractive.
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IPO objects
The company plans to use the following IPO revenue:
- Acquisition of Mehru Electrical and Mechanical Engineers Pvt Ltd
- Expanding manufacturing capacity by purchasing new machines.
- Funding future acquisitions and strategic initiatives.
- General business purposes.
Why invest in high quality power IPOs
Increased demand for renewable energy: The company’s products are consistent with the global energy transition.
Strong Finance: Revenue and profit growth shows a positive trajectory.
Diversified business models: A wide range of products that caters to multiple industries.
Expansion plan: Strategic acquisitions and facility expansions could drive future growth.
Risk factors to consider
Market dependence: Business is linked to government infrastructure spending and trends in the electricity sector.
competition: It faces strong competition with established players in the electrical equipment market.
Promoter shareholding drop: After IPO, promoter retention is significantly reduced.
How to apply for a high quality power IPO?
- Investors can apply through online platforms such as Zerodha, Upstox, Angelone, and ICICI Direct.
- ASBA (applications supported by blocked amounts) are available via net banking.
- UPI-based applications can run through apps such as Paytm Money, Grow, Phonepe.
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Quality Power IPO Review – Should I invest or avoid it?
Quality Power offers strong growth opportunities backed by its established presence in the power sector, a diversified product portfolio and robust finance. However, investors should consider the risks associated with their business. Given the long-term potential and expansion plans, investors with a risky appetite may consider subscribing, but conservative investors can wait for pricing after listing.
Disclaimer: This article is for educational purposes only and is not constituted as investment advice. Please consult your financial advisor before investing in such an IPO or stock.
The IPO price range is set between £401 and £425 per share.
The IPO will open on February 14th, 2025 and end on February 18th, 2025.
Currently, GMP is around 40-50 pounds per share.
Considering GMP and market conditions, moderate listing profits are expected.
The IPO is scheduled to be listed on BSE and NSE on February 21, 2025.
The price range for the IPO is from Rs 401 to Rs 425 based on GMP, but it is expected to list a list 10% higher than the IPO price.
There are several positive factors, but investors need to consider major risks, including industry competition and reliance on government spending before making investment decisions.
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