Quadrant Future Tek IPO: Final Day Highlights

The Quadrant Future Tek IPO has garnered overwhelming investor interest as the bidding enters its third and final day, Thursday, January 9, 2025. Here’s a detailed overview of the IPO’s performance and key aspects.

Subscription Status (As of 12:55 PM)

• Overall Subscription: The IPO is subscribed 85.48 times, with bids placed for 49.57 crore shares against 57.99 lakh shares offered.
• Retail Investors: Subscribed 189.97 times.
• Non-Institutional Investors (NIIs): Subscribed 164.55 times.
• Qualified Institutional Buyers (QIBs): Subscribed 11.11 times.

IPO Details

• Price Band: ₹275–₹290 per share.
• Lot Size: Minimum application of 50 shares and multiples thereafter.
• Issue Size: ₹290 crore, consisting entirely of a fresh issue of 1 crore equity shares.
• Bidding Period: January 7–9, 2025.

Grey Market Premium (GMP)

• The GMP for Quadrant Future Tek stands at ₹210, suggesting a 72% premium over the upper issue price. This indicates strong listing expectations, with an estimated debut price of approximately ₹500.

Company Overview

Founded in 2015 and headquartered in Mohali, Quadrant Future Tek specializes in developing advanced train control and signaling systems, particularly for the KAVACH Project of Indian Railways. The company’s key business segments include:

• Train Collision Avoidance Systems (TCAS).
• Specialty Cables Manufacturing, supported by its Electron Beam Irradiation Centre.

Key Milestones:

• Secured ₹979 crore TCAS order from Indian Railways.
• MoU with RailTel for KAVACH deployment, expanding its domestic and international footprint.

Financial Highlights

• Revenue (H1 FY25): ₹65.14 crore.
• Net Loss (H1 FY25): ₹12.11 crore.
• Order Book: Includes contracts worth ₹16.86 crore and ₹979.61 crore.

Quadrant Future Tek has shown robust revenue visibility with a strong order pipeline and strategic collaborations, offsetting its recent losses.

Brokerage Recommendations

• Nirmal Bang Securities: Rated “Subscribe” due to:
  • Healthy EBITDA margins of 24%.
  • EV/Order Book ratio of 1.3x.
• Indsec Research: Highlights peer undervaluation with:
  • EV/EBITDA of 33.9x, below 39x for Polycab and 36x for HBL Engineering.

Key Risk Factors

1. Dependency on Indian Railways: Significant revenue tied to KAVACH-related projects.
2. Single Manufacturing Facility: Operational risks due to reliance on a single plant.
3. Customer Concentration: Dependence on top five clients for a majority of revenue.
4. Negative Cash Flow: Inconsistent cash flow in recent years.

Important Dates

• Allotment Date: January 10, 2025.
• Refund Initiation: January 13, 2025.
• Demat Credit: January 13, 2025.
• Listing Date: January 14, 2025, on BSE and NSE.

The Quadrant Future Tek IPO has seen robust participation, underpinned by strong financials, a solid order book, and a promising growth outlook. With an impressive GMP and favorable market conditions, the IPO is expected to yield attractive listing gains for investors.

Disclaimer: Investments in IPOs are subject to market risks. Please review the red herring prospectus and consult with a financial advisor before investing.