Quality Power IPO closes today: Check GMP, subscription status, allotment & other details

The initial public offering (IPO) of Quality Power Electrical Equipments managed to sail through on the third and final day of the bidding, thanks to the bidding from the individual investors. The issue was overall subscribed 62 per cent on day one and ended day two with 82 per cent subscription.

Quality Power Electrical Equipments is selling its shares in the price band of Rs 401-425 apiece. Investors can apply for a minimum of 26 shares and its multiples thereafter. It is looking to raise Rs 858.70 crore via IPO, which includes fresh shares of Rs 225 crore and offer-for-sale of up to 1,49,10,500 equity shares worth Rs 633.70 crore.

According to the data, the investors made bids for 1,00,47,102 equity shares, or 0.90 per cent, compared to the 1,11,12,530 equity shares offered for the subscription by 11.45 am on Tuesday, February 18, 2025. The three-day bidding for the issue, which kicked-off on Friday, February 14, concludes today.

The allocation for non-institutional investors (NIIs) was subscribed 1.04 times, while the portion reserved for qualified institutional investors (QIBs) saw a subscription of 62 per cent. Portions allocated towards retail investors saw bids for 92 per cent of their allocation as of the same time.

Incorporated in 2001, Sangli-based Quality Power Electrical Equipments is engaged in the business of energy transition equipment and power technologies. It provides high-voltage electrical equipment and solutions for grid connectivity and energy transition, specializing in power products across generation, transmission, distribution, and automation sectors.

The grey market premium (GMP) of Quality Power has seen a sharp correction on the back of dull bidding for the issue and dented market sentiments. Last heard, the company was commanding a no grey market premium (GMP), suggesting a flat listing for investor investors. The GMP stood around Rs 100 before the issue kicked off.

Brokerage firms are mostly positive on the issue but for a long-term perspective citing its decent financial performance, niche market, solid product portfolio and rising demand for its products. However, aggressive valuations amid the current market sentiments may dent its performance.

Quality Power Electricals Equipment is valued at a FY 24 PE of 88.5 times (Adj. for minority interest) and EV/EBITDA of 86.7 times. Over FY22-24, the company’s revenue, Ebitda and Adjusted PAT grew at a CAGR of 28.3 per cent, 27.8 per cent and 50.6 per cent, respectively, said Indsec Research.

“The ROCE of 15 per cent 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” it said with a ‘subscribe for long-term’ rating to the issue.

Ahead of its IPO, Quality Power Electrical Equipments has raised Rs 386 crore from 21 anchor investors. Quality Power reported a net profit of Rs 50.08 crore with a revenue of Rs 182.72 crore for the six months ended on September 30, 2024.It clocked a bottomline of Rs 55.47 crore with a revenue of Rs 331.4 crore for the financial year 2023-24.

Quality Power shall command a market capitalization of Rs 3,291.38 crore. Quality Power has reserved 75 per cent of the net issue for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) shall be offered 15 per cent of the allocation. Remaining 10 per cent of the shares shall be allocated towards the retail investors of the issue.

The issue appears reasonably priced. Quality Power Electrical Equipments Ltd. is well positioned to capitalize on India’s growing energy sector, said Sushil Finance. “Looking at all the factors, risks, opportunities and valuation, investors can apply to the issue with a long-term horizon,” it said.

Pantomath Capital Advisors is the sole book-running lead manager of the Quality Power IPO, while Link Intime India is the registrar for the issue. The company will finalize the basis of allotment by Wednesday and the status shall be out latest by Thursday. Shares of the company shall be listed at the bourses on both BSE and NSE with February 21, Friday.