Quality Power Electrical Equipments Limited
Quality Power Electrical Equipments Limited
QPOWER
₹11,050 /-
Min. Investment
26 /- Shares
IPO Details
Min. Investment
₹11,050 /-
Apply Dates Range
Feb 14 – Feb 18, 25
Price Range
₹401 – ₹425
Lot Size
26
Issue Size
₹858.70Cr
Quality Power Electrical Equipments Limited
Quality Power Electrical Equipments Limited, established in 2001, is a prominent Indian manufacturer specializing in high-voltage electrical equipment and energy transition solutions. Headquartered in Sangli, Maharashtra, with additional facilities in Aluva, Kerala, and a subsidiary in Turkey, the company caters to a global clientele, including Fortune 500 conglomerates. It excels in producing critical equipment for High Voltage Direct Current (HVDC) and Flexible AC Transmission Systems (FACTS), pivotal for integrating renewable energy into traditional grids. With over two decades of experience, Quality Power commands a strong presence in power generation, transmission, distribution, and automation sectors, serving industries like railways, renewable energy, and power utilities.
| Founded In | 2001 |
| Industry Type | Energy Transition & Power Technologies |
| Managing Director | — |
| P/E Ratio (post) | 88.5 |
| Price-to-Sales Ratio | — |
| EBITDA | ₹67Cr |
| Return on Equity | 29.2% |
| Revenue Growth | 28.3% |
| Earnings per Share | ₹6.25 |
| Free Cash Flow | — |
| Debt-to-Equity Ratio | 0.20 |
Read More…
The company’s product portfolio includes transformers, reactors, and capacitor banks, with a capacity to handle equipment up to 765kV. In FY24, it reported revenues of ₹331 crore and a profit of ₹55.5 crore, reflecting a robust revenue CAGR of 28.3% from FY22-24. Exports constitute over 80% of its sales, underscoring its international footprint. Quality Power leverages advanced R&D and seven manufacturing units to maintain technological leadership, positioning itself as a key player in the global energy transition market.
Its ₹858.70 crore IPO aims to fuel expansion, with ₹225 crore from fresh equity allocated for acquiring Mehru Electrical and Mechanical Engineers (enhancing its transformer offerings) and funding capital expenditure for new machinery. The remaining proceeds will support inorganic growth and general corporate purposes. Despite its strong fundamentals—evidenced by a 29.2% Return on Equity and 19.2% Return on Capital Employed in FY24—the IPO’s high valuation (P/E of 88.5x at ₹425) has raised concerns among analysts, suggesting it may be overpriced in the current market.
Quality Power’s strategic focus on grid modernization and renewable energy integration aligns with global trends, promising long-term growth. However, its muted IPO subscription (1.29x) and a flat grey market premium indicate tempered investor enthusiasm, possibly due to market volatility and valuation apprehensions. Nonetheless, its diversified client base, high trade barriers, and operational efficiency make it a compelling contender in the evolving energy landscape.
Shareholding Pattern
| Category | Before IPO % (pre-issue) | After IPO % (post-issue) |
|---|---|---|
| Promoters | 100% | 73.91% |
| Promoter’s Group | — | — |
| Public | 0% | 26.09% |
| Total | 100.00% | 100% |
Promoter Holding Details
Total Promoter Holding: Quality Power Electrical Equipments Limited’s IPO, valued at ₹858.70 crore, opened on February 14, 2025, and closed on February 18, 2025. Priced between ₹401-₹425 per share, it includes a fresh issue of ₹225 crore and an offer-for-sale of 1.49 crore shares worth ₹633.70 crore. The lot size is 26 shares, requiring a minimum retail investment of ₹11,050. Funds will support the acquisition of Mehru Electrical, capital expenditure, and growth initiatives. Subscribed 1.29 times, the IPO is set to list on BSE and NSE on February 24, 2025, amid a cautious market response.
| Promoter | Shares | Equity % |
|---|---|---|
| Thalavaidurai Pandyan | — | — |
| Chitra Pandyan | — | — |
| Bharanidharan Pandyan | — | — |
| Pandyan Family Trust | — | — |
| Total (Promoters) | ~20.19 crore | 73.91% (Post-IPO) |
Pros
Strong Export Focus: Over 80% of revenue comes from exports across 100+ countries, positioning the company as a leader in the global energy transition market and reducing reliance on domestic volatility.
Robust Financial Growth: Revenue grew at a 28.3% CAGR and profit at a 50.6% CAGR from FY22-24, with FY24 revenue at ₹331 crore and profit at ₹55.5 crore, reflecting solid operational performance.
Technological Edge: Specializes in high-voltage equipment (up to 765kV) for HVDC and FACTS systems, critical for renewable energy integration, supported by a strong R&D team and ISO 17025:2017 accredited lab.
Strategic Expansion: The IPO-funded acquisition of Mehru Electrical enhances its transformer portfolio (up to 500kV), while new machinery investments boost production capacity.
High Margins: Achieved a 20.2% EBITDA margin and 29.2% Return on Equity in FY24, indicating efficient operations and profitability.
Cons
High Valuation: A P/E ratio of 88.5x at ₹425/share (based on FY24 earnings) is considered expensive compared to peers, potentially deterring value-focused investors.
Export Dependency Risk: With 80% of revenue from international markets, the company is vulnerable to currency fluctuations, trade barriers, or geopolitical disruptions.
Muted IPO Subscription: Subscribed only 1.29 times, with a flat grey market premium (₹0 as of February 20, 2025), signaling limited investor confidence or market timing issues.
Rising Debt: Debt increased from ₹10.6 crore in FY23 to ₹38.3 crore in FY24, which, despite a low debt-to-equity ratio (0.20), could strain finances if expansion falters.
Raw Material Vulnerability: Dependence on timely raw material supply and price stability poses risks to margins and production, especially given global supply chain uncertainties.
Most Ask Questions?
What is Quality Power Electrical Equipments Limited’s business?
The company manufactures high-voltage electrical equipment (e.g., transformers, reactors, converters) and provides solutions for energy transition and grid connectivity, specializing in HVDC and FACTS systems for power generation, transmission, and renewable energy integration.
What is the size of the IPO?
The IPO is worth ₹858.70 crore, comprising a fresh issue of ₹225 crore and an offer-for-sale of 1.49 crore shares (₹633.70 crore).
What are the IPO proceeds used for?
Funds will finance the acquisition of Mehru Electrical (₹225 crore), capital expenditure for machinery, inorganic growth via acquisitions, and general corporate purposes.
How was the IPO subscription?
It was subscribed 1.29 times overall, with retail at 1.83x, non-institutional investors (NII) at 1.45x, and qualified institutional buyers (QIB) at 1.03x.
Who are the promoters of the company?
The promoters are Thalavaidurai Pandyan, Chitra Pandyan, Bharanidharan Pandyan, and the Pandyan Family Trust
Is Quality Power a good investment?
It has strong growth potential due to its export focus and energy transition niche, but the high P/E (88.5x) and tepid IPO response suggest caution. Analysts recommend subscribing for long-term gains, not short-term listing profits.
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer. The author has no business relationship with any company whose stock is mentioned in this article.