Quadrant Future Tek IPO offers a compelling opportunity for investors as it seeks to raise ₹290 crore through a fresh issue of 1 crore shares. This article provides an in-depth analysis of the Quadrant Future Tek IPO, including its objectives, financial performance, strengths, risks, and industry outlook, helping you make an informed investment decision.
About Quadrant Future Tek IPO
The Quadrant Future Tek IPO will be open for subscription from January 7, 2025, to January 9, 2025. The price band has been set between ₹275 and ₹290 per share, with a minimum lot size of 50 shares for retail investors. The allotment will be finalized on January 10, 2025, and the shares will be listed on the BSE and NSE on January 14, 2025.
| Key IPO Details | Specifications |
|---|---|
| Issue Size | ₹290 crore |
| Fresh Issue | 1 crore shares |
| Price Band | ₹275 to ₹290 per share |
| Lot Size | 50 shares |
| Retail Investment Minimum | ₹14,500 |
| Listing Date | January 14, 2025 |
Objectives of the IPO
Quadrant Future Tek plans to utilize the proceeds of the IPO for the following purposes:
- Working Capital Requirements: Fund long-term working capital needs.
- Technology Development: Develop an advanced Electronic Interlocking System to enhance railway safety and operational efficiency.
- Loan Repayment: Prepay or repay outstanding working capital term loans.
- General Corporate Purposes: Support overall business operations.
About Quadrant Future Tek Limited
Quadrant Future Tek Limited is a research-driven company specializing in advanced train control and signaling systems. Headquartered in India, the company manufactures Electron Beam Irradiated (E-beam) cables and has facilities in Basma, Mohali, and design centers in Bengaluru and Hyderabad.
| Key Business Areas | Details |
|---|---|
| Specialization | Train Control & Signaling Systems |
| Product Range | E-beam Cables, Solar Cables, EV Cables |
| Focus Areas | Railways, Defense, Renewable Energy |
| Certifications | NQA, ROHS |
One of its flagship projects is KAVACH, a Train Collision Avoidance System that aligns with global safety standards like SIL-4 and CENELEC.
Financial Performance
| Year | Revenue (₹ Million) | PAT (₹ Million) | ROE (%) | Debt/Equity |
|---|---|---|---|---|
| FY22 | 1,042.58 | 18.94 | 12.17 | 5.19 |
| FY23 | 1,528.04 | 138.16 | 47.03 | 2.52 |
| FY24 | 1,517.56 | 146.92 | 33.41 | 1.86 |
While the company has shown steady revenue, the PAT has grown significantly. However, the debt-to-equity ratio remains a concern, indicating a relatively high reliance on debt.
Industry Outlook
The Indian Railways is investing heavily in modernization, including the KAVACH project and the conversion of 15,000 km to automatic signaling. Additionally, the demand for specialty cables is on the rise due to industrial applications in defense, urban power distribution, and renewable energy sectors.
| Segment | Market Share (%) in CY24EE |
|---|---|
| Medium-Voltage Specialty Cables | 68% |
| Low-Voltage Specialty Cables | 28% |
This creates a favorable environment for Quadrant Future Tek, with its diversified product portfolio and technological expertise.
Strengths
- Technological Expertise: Specializes in KAVACH-enabled signaling systems.
- Product Range: Manufactures high-performance cables for railways, defense, and EVs.
- Certifications: Adheres to global standards like ISO and IRIS.
- Exclusive Partnerships: MoU with RailTel for KAVACH implementation.
- Innovation: Uses Electron Beam Irradiation technology for superior cable performance.
Risks
- Promoter Litigation: Legal disputes among promoters may affect operations.
- Compliance Issues: Pending SEBI settlement may hurt credibility.
- Operational Challenges: Dependence on a single facility poses risks.
- Evolving Preferences: Rapid industry changes may affect product relevance.
- Inexperience: Limited history in Train Control Systems may impact future growth.
Quadrant Future Tek IPO Lot Size and Investment
| Application | Lots | Shares | Investment (₹) |
|---|---|---|---|
| Retail (Min) | 1 | 50 | 14,500 |
| Retail (Max) | 13 | 650 | 1,88,500 |
| S-HNI (Min) | 14 | 700 | 2,03,000 |
| S-HNI (Max) | 68 | 3,400 | 9,86,000 |
| B-HNI (Min) | 69 | 3,450 | 10,00,500 |
Key Performance Indicators (KPIs)
| KPI | Value |
|---|---|
| Return on Equity (ROE) | 33.41% |
| Return on Capital Employed (ROCE) | 26.12% |
| Debt-to-Equity Ratio | 1.86 |
| PAT Margin | 9.68% |
These indicators reflect a strong financial position, although the debt levels require monitoring.
How to Apply for Quadrant Future Tek IPO
- Login to Broker Account: Access your account on platforms like Angel One.
- Navigate to IPO Section: Locate the Quadrant Future Tek IPO.
- Enter Lot Size: Specify the desired number of lots.
- Submit UPI ID: Link your payment method.
- Approve Payment: Confirm the payment request on your UPI app.
How to Check IPO Allotment Status
Follow these steps to check your allotment status:
- Login: Open your broker’s app or website.
- Go to IPO Orders: Select the Quadrant Future Tek IPO.
- Check Status: View your allotment.
Final Thoughts
Quadrant Future Tek IPO presents an opportunity to invest in a company at the forefront of technological innovation in railway safety and specialty cables. However, potential investors should weigh the strengths against the risks, including litigation among promoters and the evolving industry landscape.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a professional before making investment decisions.