Quadrant Future Tek IPO: Check subscription status, GMP and other details. Should you apply or not? | Stock Market News

Quadrant Future Tek IPO: The initial public offering (IPO) of Quadrant Future Tek opened for subscription on January 7 and will close on January 9. The company, which aims to raise ₹290 crore through the IPO, has set a price band of ₹275-290 per share.

Subscription Status

Quadrant Future Tek IPO was booked 41.41 times by 2:45 pm on Day 2. Investors bid for 22.77 crore shares as against 55 lakh shares on offer. The retail portion of the public issue was subscribed 123.02 times while the Non-Institutional Investors’ (NII) category received 69.4 times bids. The QIB quota was bid 0.22 times by this period.

Quadrant Future Tek GMP today

The company’s shares in the grey market traded at a premium of ₹210. This indicates an estimated listing price of ₹500, up 72.41 per cent from the IPO price of ₹290. 

However, one must note that grey market premium is only an indicator of how the company’s shares are performing in the unlisted market and can change quickly.

Quadrant Future Tek IPO details

The IPO is entirely a fresh issue of 1 crore shares with no offer-for-sale component. For prospective investors, the minimum lot size for application is 50 shares and in multiples thereof. Retail investors are required to invest a minimum amount of ₹14,500 to participate in the offering.

The company plans to allocate the net proceeds from the issue to several strategic objectives. These include funding its long-term working capital requirements, supporting capital expenditure for the development of an advanced Electronic Interlocking System, and prepaying or repaying a portion of its outstanding working capital term loans. Additionally, a portion of the proceeds will be utilized for general corporate purposes, ensuring overall operational efficiency and financial flexibility.

Sundae Capital Advisors is the book-running lead manager of the Quadrant Future Tek IPO, while Link Intime India Private Ltd is the registrar for the issue.

The allotment for the Quadrant Future Tek IPO is expected to be finalised on Friday, January 10. The IPO will list on BSE and NSE with the tentative listing date fixed as Tuesday, January 14.

Quadrant Future Tek IPO Review

Brokerages have expressed a positive outlook on the IPO, assigning a ‘subscribe’ rating due to its promising growth prospects and reasonable valuations. Analysts see significant potential for long-term investors, enhancing the issue’s attractiveness.

BP Equities: Subscribe

BP Equities has recommended subscribing to the IPO, citing several growth drivers. According to the brokerage, the Indian Train Control System market, valued at USD 159 million in 2023, is projected to reach USD 208 million in 2024, with an anticipated CAGR of 12.7 per cent between 2024 and 2030. Furthermore, the interim FY2024-25 budget allocated ₹2.55 lakh crore to Indian Railways, reflecting a 5.8 per cent increase. The KAVACH automatic train protection system is expected to expand coverage to 4,500 kilometers in 2024, with a long-term target of 44,000 kilometers over five years.

BP Equities also highlighted key developments such as an MoU with RailTel Corporation and a ₹978.6 crore order from Chittaranjan Locomotive Works, which reinforce the company’s position as a leading OEM. At the upper price band, the IPO is valued at a P/E ratio of 59.1x based on FY24 earnings, which the brokerage considers fair compared to peers.

SBI Securities: Subscribe

SBI Securities has also assigned a ‘subscribe’ rating, noting the strong growth outlook for the Indian Specialty Cable and Train Control System markets. The industry is forecasted to grow at a CAGR of 9.8 per cent and 12.7 per cent, respectively, from CY24E to CY30E. Analysts highlighted the strategic MoU with RailTel Corporation for KAVACH and the ₹978.6 crore order from Chittaranjan Locomotive Works as critical factors bolstering the company’s position as a premier OEM.

The IPO is valued at a post-issue FY24 P/E multiple of 79.0x at the upper price band. Despite the high valuation, the robust growth potential and strategic developments make the issue appealing to investors.

Both brokerages view the IPO as a compelling opportunity, particularly for long-term investors seeking exposure to India’s expanding Train Control and Specialty Cable sectors.

About Quadrant Future Tek

Quadrant Future Tek is a research-driven organization focused on creating next-generation Train Control and Signaling Systems under the Indian Railways’ KAVACH project. These systems are designed to deliver exceptional safety and reliability for rail passengers.

The company also operates a state-of-the-art specialty cable manufacturing facility, equipped with an Electron Beam Irradiation Centre. Its specialty cables are utilized in railway rolling stock and the naval defence sector. Additionally, the facility is equipped with comprehensive infrastructure for producing Solar and EV cables, reflecting the company’s diversified capabilities and commitment to innovation.

Financially, the company experienced a slight revenue decline of 1 percent but saw its profit after tax (PAT) increase by 6 percent between the fiscal years ending March 31, 2023, and March 31, 2024.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.