Quadrant Future Tek, a research-driven company specialising in cutting-edge Train Control and Signalling Systems, is set to launch its much-anticipated Initial Public Offering (IPO) on January 7, 2025. This IPO is expected to raise ₹290 crore through a fresh issue of equity shares, making it a significant event for investors and industry observers. Let’s dive into the details.
WATCH | Quadrant Future Tek IPO Explained: Key Highlights & Investment Insights
Key Highlights of Quadrant Future Tek IPO
- IPO Size and Structure
- The IPO will raise ₹290 crore entirely through a fresh issue of 2.9 crore equity shares.
- The face value of each share is ₹10, with a price band set between ₹275 and ₹290 per share.
- Investors need to bid for a minimum of 50 shares, translating to ₹14,500 at the upper price band.
- Important Dates
- Subscription Window: January 7 to January 9, 2025.
- Anchor Investor Bidding: January 6, 2025.
- Allotment Finalization: January 10, 2025.
- Refund Process Start Date: January 13, 2025.
- Shares Credited to Demat Accounts: January 13, 2025.
- Tentative Listing Date: January 14, 2025, on both NSE and BSE.
- Allocation Breakdown
- 75% reserved for Qualified Institutional Buyers (QIBs).
- 15% for Non-Institutional Investors (NIIs).
- 10% for Retail Individual Investors.
Objectives of the IPO
The funds raised through the IPO will be utilized for the following purposes:
- Working Capital Needs: ₹175 crore will support long-term working capital requirements.
- Technology Investments: ₹25 crore will go toward developing an advanced Electronic Interlocking System.
- Debt Repayment: ₹25 crore will be used to prepay or repay outstanding working capital loans.
- General Corporate Purposes: The remaining funds will cater to other corporate needs.
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About Quadrant Future Tek
Established in 2015, Quadrant Future Tek is a pivotal player in developing advanced Train Control and Signalling Systems under the Indian Railways’ KAVACH initiative. The company also manufactures speciality cables for railway rolling stock and the naval defence industry, contributing to sectors like renewable energy and electric vehicles.
Business Segments
Quadrant Future Tek operates two primary business divisions:
- Specialty Cables:
- Produces high-grade cables for naval defence, renewable energy projects, electric vehicles, and railway equipment.
- Train Controls and Signalling Systems:
- Develops technologies like the Train Collision Avoidance System (TCAS), which is part of the Atmanirbhar Bharat initiative.
Manufacturing and Design Capabilities
- State-of-the-Art Facilities: Quadrant Future Tek has a manufacturing unit located in Basma, Mohali, Punjab.
- R&D Excellence: The company operates design centres in Bengaluru and Hyderabad, focusing on innovation and product development.
Financial Performance
Quadrant Future Tek has shown a mix of steady growth and challenges in recent years. Below are some key financial details:
- (Source – Freepik)FY23 Results:
- Revenue: ₹152.8 crore.
- Net Profit: ₹13.90 crore.
- FY24 Results:
- Revenue: ₹151.75 crore.
- Net Profit: ₹14.71 crore.
- Q2 FY25 (ended September 30, 2024):
- Revenue: ₹65.14 crore.
- Net Loss: ₹12.10 crore.
Key Strengths
- Technological Prowess: Focus on developing Automatic Train Protection Systems to meet the needs of Indian Railways.
- Strategic Collaborations: Exclusive partnerships, including an MoU with RailTel for KAVACH-related opportunities.
- Diverse Offerings: A robust portfolio of speciality cables and train control solutions.
- Self-Reliance: In-house design, development, and production capabilities ensure cost efficiency and product quality.
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Potential Risks
- Reliance on a Single Facility: Dependence on one manufacturing unit may pose operational challenges.
- Evolving Technology Needs: Keeping pace with rapid technological advancements is crucial for staying competitive.
- Performance of New Ventures: The company has recently ventured into Train Control Systems, which may face uncertainties.
- Dependence on Major Orders: Heavily reliant on a ₹978.6 crore order from Chittaranjan Locomotive Works.
- Financial Stability Concerns: Previous errors in financial reporting and fluctuating profit margins may raise concerns for investors.
Promoters
The promoters of Quadrant Future Tek include:
- Mohit Vohra
- Amit Dhawan
- Amrit Singh Randhawa
- Rupinder Singh
- Vishesh Abrol
- Vivek Abrol
- Aikjot Singh
- Rajbir Singh Randhawa
These individuals currently hold 93.33% of the pre-issue shareholding, ensuring a strong promoter-led foundation.
Should You Invest in Quadrant Future Tek IPO?
Investors looking for exposure to the railway and infrastructure development sectors may find this IPO appealing. With its focus on innovation, strategic collaborations, and a strong foothold in critical sectors like Train Control Systems and specialty cables, Quadrant Future Tek presents a promising growth story.
However, the company’s recent financial fluctuations and reliance on specific projects should be factored into investment decisions. Retail investors should carefully assess the risks and rewards before subscribing.
