Overview of Quality Power Electrical Equipments IPO
Quality Power Electrical Equipments is gearing up to raise funds through an Initial Public Offering (IPO). The company has submitted draft papers to the Securities and Exchange Board of India (SEBI) on September 16, aiming to generate significant capital for its growth initiatives. The IPO will comprise fresh equity shares worth Rs 225 crore, alongside 1.2 crore equity shares that will be offered for sale (OFS) by promoter Chitra Pandian.
Intended Use of Funds
Quality Power aims to utilize the proceeds from its IPO effectively. The major allocations include:
| Purpose | Funds Allocated (in crore Rupees) |
|---|---|
| Acquisition of Mehru Electrical & Mechanical Engineers | 117 |
| Purchase of Plant and Machinery | 26.8 |
| Inorganic Growth and General Corporate Purposes | Remaining Funds |
The Pandian family currently holds a 100% stake in Quality Power Electrical Equipments, showcasing their commitment to the company’s long-term success. Pantomath Capital Advisors has taken on the role of the sole merchant banker for this IPO, ensuring effective management and advisory services throughout the process.
Business Snapshot of Quality Power
Founded in Maharashtra, Quality Power Electrical Equipments specializes in manufacturing high voltage electrical equipment and solutions essential for electrical grid connectivity and energy transition. The company also caters to the emerging renewable energy sector, providing customized equipment and solutions to various top-tier clients.
Quality Power competes with notable industry players such as Transformers & Rectifiers India, Hitachi Energy India, and GE T&D India, positioning itself as a significant contender in the rapidly evolving electrical equipment market.
Financial Performance
As of March 2024, Quality Power has established a robust customer base with 210 clients, including key sectors like power utilities, industrial power producers, and entities focused on renewable energy. Impressively, international operations contribute the majority of the company’s revenue, reflecting its global footprint.
In terms of financial metrics, Quality Power reported a revenue of Rs 300.6 crore for the financial year ending March 2024, marking a 19% increase from Rs 253.3 crore in the previous year. Export activities constituted nearly 76% of the total revenue during FY 2024, illustrating the strong demand for its products in global markets.
For the fiscal year 2023-24, Quality Power’s profit surged to Rs 55.5 crore, reflecting a 39% increase year-over-year. The company also witnessed a 17% growth in EBITDA, amounting to Rs 37.8 crore, although the EBITDA margin saw a slight decline of 2 basis points to 12.6%.
Conclusion
The upcoming IPO of Quality Power Electrical Equipments presents an exciting opportunity for investors looking to enter the electrical equipment sector. With a clear strategy for growth, a strong financial performance, and a commitment to innovation, Quality Power is poised to make significant strides in the market.
