Quality Power IPO opens today; GMP up 3%; should you park your money?

Quality Power IPO opens for subscription; check price band, lot size, GMP, reviews, allotment date, listing date, and other key details here.

Quality Power IPO opens today: The initial public offering of energy transition equipment maker company Quality Power Electrical Equipments opens for public subscription today, February 14, 2025. At the upper end of the price band, the company seeks to raise Rs 858.70 crore from the offering. Quality Power has already raised Rs 386.41 crore from anchor investors, with the bidding concluded on February 13, 2025.

 

Quality Power has also garnered reviews from brokerages, including Reliance Securities, SBI Securities, and Mehta Equities, for its public offering. However, before we delve into the brokerage reports, here are the key details of the Quality Power IPO as outlined in the Red Herring Prospectus:

 

 

Quality Power IPO size

The public offering comprises a fresh issue of 52,94,118 equity shares, and an offer for sale (OFS), with promoters Chitra Pandyan offloading up to 14,910,500 equity shares of the company.

 

Quality Power IPO price band, lot size

Quality Power IPO is available with a price band of Rs 401-425 per share, and a lot size of 26 shares. Accordingly, investors can bid for a minimum of 26 shares and in multiples thereof.  READ: Hexaware Technologies IPO Subscription Day 3

 

Retail investors need a minimum of Rs 11,050 to bid for one lot, comprising 26 shares. For a maximum bid within the Rs 2,00,000 limit, retail investors can apply for up to 18 lots, or 468 shares.

 

Quality Power IPO grey market premium (GMP)

Shares of Quality Power were commanding a decent premium in the grey market on Friday, February 14, 2025. Sources tracking unofficial market activities revealed that the company's shares were trading at Rs 439 apiece in the grey market, reflecting a premium of Rs 14 or 3.29 per cent over the upper price band of Rs 425.

 

Quality Power IPO allotment, listing date

The public subscription window for the IPO is slated to close tentatively on Tuesday, February 18, 2025. The basis of allotment of Quality Power IPO shares is expected to be finalised on Wednesday, February 19, 2025, with shares credited to investors' demat accounts by Thursday, February 20, 2025.

 

Quality Power shares are likely to list on BSE and NSE on Friday, February 21, 2025.

 

Quality Power IPO objective

Quality Power will not receive any proceeds from the OFS, with the Promoter Selling Shareholder entitled to their portion of the proceeds after deducting offer-related expenses and taxes, according to the RHP.

 

The company, however, proposes to utilise the proceeds from the fresh issue for the payment of the purchase consideration for the acquisition of Mehru Electrical and Mechanical Engineers, as well as for funding capital expenditure requirements of the company for the purchase of plant and machinery. Quality Power will also utilise the proceeds for funding inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes.

 

Quality Power IPO registrar, lead manager

Link Intime India serves as the registrar for the issue. Pantomath Capital Advisors serves as the sole book-running lead manager for the Quality Power IPO.

 

Should you subscribe to the Quality Power IPO?

 

Reliance Securities – Subscribe for long term

Vikas Inder Jain, Head of Research at Reliance Securities, has recommended that investors subscribe to the Quality Power IPO for a long-term outlook. Quality Power, Jain said, is strategically positioned as an Indian producer of high-voltage power products and power quality systems, with a diversified global customer base of 210+ clients, including Fortune 500 companies, fostering long-term relationships focused on technology, scale of operations, reliability, and quality in energy projects.

 

"Quality Power has a seasoned team which brings extensive industry experience and a skilled workforce, enabling the company to capitalise on growth opportunities, acquire companies at strategic pricing, driving growth, market expansion, and effective project execution to scale stronger growth through its product offerings, unlock geographical expansion, and solidify leadership in the energy transmission sector in the coming years. Hence, we recommend subscribing to the issue for the long term," Jain wrote in a research note.

 

SBI Securities – Subscribe for long term

SBI Securities has also recommended that investors with a long-term investment horizon subscribe to the issue at the cut-off price. According to the brokerage, Quality Power is valued at FY24 P/E and EV/Ebitda multiples of 59.3x and 80.8x respectively, based on the upper price band on the post-issue capital, which looks expensive. The proforma FY24 P/E and EV/Ebitda multiples (post-acquisition of a 51 per cent stake in Mehru Electrical) are 50.1x/59.0x, respectively, which appears to be expensive looking at the relatively smaller scale of business.

 

"Although the company is doing well on financial metrics (Revenue/Ebitda/PAT CAGR of 28.3 per cent/27.8 per cent/14.6 per cent respectively over FY22-FY24) and generates healthy return ratios in the range of 34-36 per cent, we believe the listing gains can be muted due to relatively stretched valuations," said SBI Securities in its report.

 

Mehta Equities – Subscribe for long term

Rajan Shinde, Research Analyst at Mehta Equities, has also recommended investors 'Subscribe' to the Quality Power IPO for a long-term perspective. Shinde believes Quality Power brings investors an opportunity to invest in the rapidly growing energy transition and power infrastructure sector.

 

"We think the company's strong global presence, specialised expertise in HVDC and FACTS technologies, and a diversified high-voltage equipment portfolio position it as a key player in grid modernisation and renewable energy integration. We also believe the company’s robust customer base across multiple regions, coupled with its proven track record of strategic acquisitions, continues to drive its market expansion and technological advancements," said Shinde.

 

Based on annualised FY2025 earnings and fully diluted post-IPO paid-up capital, Shinde said the company is asking for a P/E of 30.76x, which appears reasonable when compared to its listed industry peers. "Given its recent strategic growth initiatives like the acquisition of Mehru Electricals, which would allow the company to expand its product range, especially in 500kV transformers, this could strengthen its position in the high-voltage equipment market. So we believe QPEEL is well-positioned to capitalise on India's evolving energy landscape," Shinde added.

 

About Quality Power Electrical Equipments 

Quality Power Electrical Equipments (QPEEL) is a technology-driven company specializing in power products and solutions across generation, transmission, distribution, and automation. It provides high-voltage electrical equipment for grid connectivity and energy transition, including HVDC and FACTS networks. The company serves global clients with critical power technologies, focusing on integrating renewables with traditional grids. QPEEL also offers grid interconnection solutions and operates seven facilities in India