IPO will list on 24 Feb'25
Quality Power Electrical Equipments Ltd
Minimum Investment
₹ 11,050 / 26 shares
Grey market premium
₹ -2 (-0.5% premium)
Our Verdict:
Neutral
- Quality Power Electrical Equipments Ltd (QPEEL) has a strong global presence, specialized expertise in key technologies, and a diversified high-voltage equipment portfolio, positioning it as a key player in grid modernization and renewable energy integration.
- QPEEL is acquiring a 51% stake in Mehru Electrical for Rs 117 crore (via IPO) to expand into 400 kV instrument transformers. This acquisition will strengthen its portfolio, boost margins and enhance its presence in Southeast Asia and Africa, driving growth through operational synergies.
- In terms of valuation, the IPO appears fully priced, with a P/E ratio of 82x based on FY24 earnings. While the company demonstrates strong financial performance, listing gains may be limited due to stretched valuations. Additionally, market volatility and global macroeconomic uncertainties pose risks.
- Given these factors, it may be prudent for investors to consider buying the stock from the secondary market post-listing at more favourable entry points.
About the company
Founded in
20 Sep'01
Managing director
Thalavaidurai Pandyan
- QPEEL is among the select few global manufacturers of critical high-voltage equipment for High Voltage Direct Current (HVDC) and Flexible AC Transmission Systems (FACTS) networks—key components in the energy transition from renewables to traditional power grids. It offers technology-driven products, comprehensive system solutions, and specialized services for the power sector.
- QPEEL’s manufacturing operations span two locations in Maharashtra and Kerala. As part of its global expansion strategy, the company acquired a 51% stake in Endoks Enerji Anonim Sirketi in 2011, strengthening its design, assembly, and project management capabilities in Turkey.
STRENGTHS
- Two Decades of Industry Expertise: With over 20 years of experience in the energy transition space, QPEEL offers a comprehensive range of products essential for efficient power transmission and advanced power automation.
- Extensive Global Reach: Operating in 100+ countries across six continents, QPEEL serves diverse industries, including automobiles, oil & gas, cement, chemicals, renewables, traction & locomotives, steel & metals, and power utilities—ensuring a well-diversified revenue base and reduced dependency on any single sector.
- Robust Financial Performance: QPEEL has demonstrated strong financial growth, achieving a 28% CAGR in operational revenue, 28% CAGR in EBITDA, and 15% CAGR in net profit from FY22 to FY24.
- Superior Return Metrics: QPEEL boasts a Return on Equity (RoE) of 29.15%, significantly higher than its listed peers, while maintaining a Return on Capital Employed (RoCE) of 19.20% as of FY24.
- Industry-Leading Profitability: QPEEL has delivered best-in-class margins, with an EBITDA margin of 12.68% and a net profit margin of 16.74% as of FY24, outperforming competitors in the industry.
RISK FACTORS
- Client Concentration: QPEEL's revenue is heavily dependent on a limited customer base, with the top 3, 5, and 10 clients contributing 27.15%, 39.62%, and 58.17%, respectively, to operational revenue in FY24. The loss of any key client could significantly impact revenue stability and overall business performance.
- Foreign Exchange Volatility: With over 74% of revenue coming from international markets in H1FY25 and consistently across the past three fiscals, QPEEL is exposed to exchange rate fluctuations, which could materially impact profitability and margins.
- Contingent Liabilities: As of H1FY25, QPEEL has contingent liabilities and commitments totalling Rs 110 crore. If these obligations materialize, they could adversely affect the company’s financial condition, cash flow, and operational results.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 858.70 crore
Fresh Issue
₹ 225 crore
OFS
₹ 633.70 crore
Price range
₹ 401 - 425
Lot size
26 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for:
- Acquiring Mehru Electrical and Mechanical Engineers Pvt Ltd;
- Purchasing plant and machinery;
- Supporting inorganic growth through strategic acquisitions and other initiatives; and
- General corporate purposes.
Dates
Bidding open
14 Feb'25
Bidding close
18 Feb'25
Allotment date
19 Feb'25
Refund date
20 Feb'25
Listing
24 Feb'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.