In an exciting development, Quality Power Electrical Equipments, a leading player in high-voltage electrical solutions, is gearing up for an initial public offering (IPO). The company has officially submitted its draft papers to the Securities and Exchange Board of India (SEBI) on 16 September 2024, marking its entry into the capital market. The IPO is set to include fresh equity shares worth ₹225 crore, along with an Offer for Sale (OFS) of 1.2 crore shares by the promoter, Chitra Pandian.
Use of IPO Proceeds
The Pandian family, which holds a 100% stake in Quality Power, plans to use a significant portion of the IPO funds for strategic expansion. Around ₹117 crore will be allocated to acquire Mehru Electrical & Mechanical Engineers, a move aimed at bolstering their market presence. An additional ₹26.8 crore is earmarked for purchasing new plant and machinery, ensuring the company stays at the forefront of technological advancement. The remaining funds will be directed towards inorganic growth and other corporate activities.
Quality Power’s Business Overview
Operating from Maharashtra, Quality Power Electrical Equipments specializes in manufacturing high-voltage electrical products and providing solutions for energy transition and electrical grid connectivity. Their expertise extends to customized equipment for renewable energy applications, positioning them as a key player in the fast-evolving energy landscape.
Industry Competitors
In the highly competitive electrical equipment sector, Quality Power faces strong competition from established companies like Transformers & Rectifiers India, Hitachi Energy India, and GE T&D India. Despite this, the company’s innovative approach and expanding international presence give it a solid competitive edge.
Financial Performance
Quality Power has shown impressive growth in recent years. In the financial year ending March 2024, the company reported a revenue of ₹300.6 crore, a 19% increase compared to the previous year. Interestingly, exports contributed a remarkable 76% of the total revenue. The company’s net profit stood at ₹55.5 crore, reflecting a 39% rise over the previous year. Although EBITDA grew by 17% to ₹37.8 crore, the margin saw a slight dip, declining by 2 basis points to 12.6%.
This IPO is expected to be a crucial step for Quality Power Electrical Equipments as it seeks to expand its footprint in the growing energy sector.
