Quality Power Electrical Equipments Limited (Quality Power) has filed its Draft Red Herring Prospectus (DRHP) with market regulator, SEBI. The Company plans to raise funds through initial public offering (IPO) of equity shares (face value ₹ 10 each) comprising fresh issue aggregating up to ₹2,250 million (₹225 crores) and offer for sale (OFS) up to 12,000,000 Equity Shares.
Quality Power is an Indian player serving global clients in about 100 countries in critical energy transition equipment upto 765kv and power technologies and provides high voltage electrical equipment and solutions for electrical grid connectivity and energy transition. The Company specializes in the provision of power products and solutions across power generation, transmission, distribution, and automation sectors. Notably, the Company’s product portfolio contributes to advancing decarbonization efforts, sustainability, and green energy initiatives.
As per a report by Care, Quality Power is among the few global manufacturers of critical high voltage equipment for High Voltage Direct Current (“HVDC”) and Flexible AC Transmission Systems (“FACTS”) networks. These equipment and networks form critical components for energy transition from renewable sources to traditional power grids.
As per a report by care, HVDC technology is transforming the landscape of energy transition equipment and power technologies by enabling efficient, long-distance power transfer with markedly reduced energy losses. This advancement is crucial for integrating renewable energy sources from remote locations, such as offshore wind farms and solar plants in remote regions, into urban areas.
The Company’s multiple manufacturing operations in India are spread across two locations, including Sangli, Maharashtra, and Aluva, Kerala. As part of its global expansion, the Company through its subsidiary acquired 51% of the share capital in Turkey based company, Endoks Enerji in 2011, which provides energy solutions specializing in smart grid technologies and power quality management.
Peers of Quality Power include Hitachi Energy India Limited, GE T&D India Limited and Transformers & Rectifiers (India) Limited. As of March 31, 2024, the Company had 210 customers. The Company’s end customers include power utilities, power industries, and renewable energy entities. The Company’s Revenue from operations for the financial year ended March 31, 2024 stood at INR 300 Crores with profit after tax margin of 16.74% and ROE of approx. 30%. The Company derives the majority of its revenue from international operations, which constitutes more than 75%, of the Company’s total revenue from operations.
The Company proposes to utilize the net proceeds inter alia for the acquisition of Mehru Electrical and Mechanical Engineers Private Limited. As per the proforma financial statements disclosed in the DRHP, for the financial year 2023 -24, the combined Revenues of the Company along with the target acquisition would be to ₹ 5506.99 million (₹ 550.69 crores) with profit after tax of ₹ 656.96 million (₹ 65.69 crores).Pantomath Capital Advisors Private Limited is the sole book running lead manager (BRLM) to the IPO.
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