Quality Power IPO Opens for Subscription: GMP, Brokerage Ratings & Key Details

Quality Power Electrical Equipments Limited’s ₹858.70 crore IPO opened for subscription on February 14, 2025, with a price band of ₹401-₹425 per share. The IPO saw a 0.01x subscription on Day 1, with a Grey Market Premium (GMP) of ₹14, indicating a potential 3.29% listing gain. Most brokerage firms recommend subscribing for the long term due to the company’s strong growth prospects in the energy transition sector.

CONTENTS:

• Quality Power IPO Opens for Subscription: Key Details, Brokerage Ratings, and GMP Updates
• Quality Power Electrical Equipments Limited IPO Day 1: Subscription Status, GMP & Key Highlights

Quality Power IPO Opens for Subscription: GMP, Brokerage Ratings & Key Details

The initial public offering (IPO) of Quality Power Electrical Equipments has opened for bidding today, February 14, 2025, and will remain open until February 18, 2025. The company has set a price band of ₹401-425 per share, with a minimum lot size of 26 shares. The total issue size amounts to ₹858.70 crore, comprising a fresh issue of ₹225 crore and an offer-for-sale (OFS) of 1,49,10,500 shares worth ₹633.70 crore.

Company Overview

Founded in 2001 and based in Sangli, Maharashtra, Quality Power Electrical Equipments specializes in energy transition equipment and power technologies. It manufactures high-voltage electrical equipment such as reactors, transformers, converters, and grid interconnection solutions for global markets. The company plays a crucial role in high voltage direct current (HVDC) and flexible AC transmission systems (FACTS), which help integrate renewable energy sources into power grids.

For the six months ending September 30, 2024, Quality Power reported:

• Revenue: ₹182.72 crore
• Net profit: ₹50.08 crore

For FY 2023-24, the company recorded:

• Revenue: ₹331.4 crore
• Net profit: ₹55.47 crore
• Market capitalization: ₹3,291.38 crore

IPO Allocation

• Qualified Institutional Buyers (QIBs): 75%
• Non-Institutional Investors (NIIs): 15%
• Retail Investors: 10%

The IPO listing date is tentatively set for February 21, 2025, on both BSE and NSE. Pantomath Capital Advisors is managing the IPO, with Link Intime India as the registrar.

Brokerage Firm Recommendations

Several brokerage firms have analyzed the IPO and provided their ratings:

1. Elara Capital – Subscribe for long term
   • Sees growth potential in the renewable energy sector
   • Valuation at 47x FY24 P/E, a discount compared to peers
   • Mehru acquisition expected to unlock further value
2. Reliance Securities – Subscribe
   • Strong global client base (210+ clients, including Fortune 500 companies)
   • Strategic acquisitions to enhance market expansion
3. SBI Securities – Subscribe for long term
   • Valuation appears stretched at 50.1x proforma FY24 P/E
   • Healthy return ratios (34-36%) but limited short-term upside
4. Choice Broking – Subscribe
   • Over 20 years of experience in power transmission
   • Well-positioned for energy transition growth
5. Mehta Equities – Subscribe for long term
   • Net profit grew 39.1% in FY24, rebounding from a decline in FY23
   • P/E of 30.76x is reasonable compared to industry peers
6. StoxBox – Subscribe for long term
   • Strong financial growth and diverse product portfolio
   • Positioned for sustained growth in the energy sector
7. Canara Bank Securities – Subscribe for long term
   • Leading in HVDC and FACTS technology
   • 80% revenue from global markets, ensuring stability

Conclusion

Despite concerns about valuation, most analysts recommend subscribing for the long term, citing strong global demand for high-voltage power equipment, strategic acquisitions, and a diversified customer base. Investors should consider their risk appetite and investment horizon before subscribing.

Quality Power Electrical Equipments Limited IPO Day 1: Subscription Status, GMP & Key Highlights

Quality Power Electrical Equipments Limited, established in 2001, is a leading provider of energy transition equipment and power technologies. The company specializes in high-voltage electrical solutions for grid connectivity. Its initial public offering (IPO) opens for subscription on February 14, 2025, and will close on February 18, 2025. The allotment process is expected to be completed by February 19, 2025, with a tentative listing on the BSE and NSE scheduled for February 21, 2025.

Quality Power IPO Details

• Total Issue Size: ₹858.70 crores
  • Fresh Issue: 0.53 crore shares worth ₹225.00 crores
  • Offer for Sale (OFS): 1.49 crore shares totaling ₹633.70 crores
• Price Band: ₹401 – ₹425 per share
• Minimum Lot Size: 26 shares

Investment Requirements:

• Retail Investors:
  • Minimum investment: ₹10,426
  • Recommended investment at cut-off price: ₹11,050 (to reduce oversubscription risks)

• Non-Institutional Investors (NII):
  • 19 lots (494 shares) – ₹2,09,950
  • 91 lots (2,366 shares) – ₹10,05,550

Day 1 Subscription Status (as of 10:06 AM, February 14, 2025)

• Overall Subscription: 0.01 times
• Retail Investors: 0.02 times
• Non-Institutional Investors (NII): 0.01 times
  • High-value bids above ₹10 lakh (bNII): 0.01 times
  • Lower-value bids below ₹10 lakh (sNII): 0.01 times

• Qualified Institutional Buyers (QIBs): No bids yet

Utilization of IPO Proceeds

The net proceeds from the fresh issue will be used for:

• Acquiring Mehru Electrical and Mechanical Engineers Private Limited
• Funding capital expenditures for new plant and machinery
• Supporting inorganic growth through future acquisitions and strategic expansions
• General corporate purposes

Note: The company will not receive any proceeds from the Offer for Sale (OFS), as those funds will go directly to the selling shareholders.

Grey Market Premium (GMP) Update

• As of 9:26 AM, February 14, 2025, the GMP for Quality Power IPO stood at ₹14.
• If this trend continues, the estimated listing price could be ₹439, reflecting a 3.29% premium over the upper IPO price of ₹425.

With over two decades of expertise in power transmission technologies, Quality Power is well-positioned to capitalize on the growing demand for energy transition solutions.