Quality Power Electrical Equipments Limited Files IPO Papers with SEBI

VarahiMedia.com online news,Hyderabad, September 19, 2024:Quality Power Electrical Equipments Limited has officially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) as it prepares to raise funds through an initial public offering (IPO).

The company aims to generate up to ₹2,250 million (₹225 crores) through a fresh issue of equity shares with a face value of ₹10 each, along with an offer for sale (OFS) of up to 12 million equity shares.

Quality Power is a prominent Indian player in the field of critical energy transition equipment, serving global clients in approximately 100 countries. The company specializes in high-voltage electrical equipment and solutions for electrical grid connectivity, focusing on power generation, transmission, distribution, and automation sectors. Its product portfolio plays a vital role in advancing decarbonization efforts, sustainability, and green energy initiatives.

According to a report by Care, Quality Power is among the few global manufacturers of essential high-voltage equipment for High Voltage Direct Current (HVDC) and Flexible AC Transmission Systems (FACTS) networks. These technologies are crucial for facilitating the transition from renewable energy sources to traditional power grids.

The report further highlights that HVDC technology is reshaping the energy transition landscape by enabling efficient, long-distance power transfer with significantly reduced energy losses. This innovation is essential for integrating renewable energy sources, such as offshore wind farms and solar plants in remote areas, into urban centers.

Quality Power operates multiple manufacturing facilities across India, located in Sangli, Maharashtra, and Aluva, Kerala. As part of its global expansion strategy, the company acquired a 51% stake in Turkey-based Endoks Enerji in 2011, which specializes in smart grid technologies and power quality management.

The company’s peers include Hitachi Energy India Limited, GE T&D India Limited, and Transformers & Rectifiers (India) Limited. As of March 31, 2024, Quality Power had 210 customers, including power utilities, power industries, and renewable energy entities.

The company reported revenues from operations of ₹300 crores for the financial year ending March 31, 2024, with a profit after tax margin of 16.74% and a return on equity (ROE) of approximately 30%. Notably, more than 75% of the company’s total revenue is derived from international operations.

Quality Power intends to utilize the net proceeds from the IPO for various purposes, including the acquisition of Mehru Electrical and Mechanical Engineers Private Limited. The proforma financial statements disclosed in the DRHP indicate that for the financial year 2023-24, the combined revenues of Quality Power and the target acquisition are expected to reach ₹5,506.99 million (₹550.69 crores), with a projected profit after tax of ₹656.96 million (₹65.69 crores).

Pantomath Capital Advisors Private Limited has been appointed as the sole book-running lead manager (BRLM) for the IPO.

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