Quadrant Future Tek IPO: A Market Sensation
The Quadrant Future Tek IPO has captured the attention of market participants, showcasing an impressive subscription rate of nearly 64 times on the final day of the bidding process. This overwhelming response is primarily driven by strong demand from retail investors, signaling a robust interest in the company’s growth potential and market positioning.
Rapid Subscription and Investor Interest
The IPO was fully subscribed within hours of its opening, a testament to the confidence investors have in Quadrant Future Tek. By 11:20 AM on Thursday, retail investors had subscribed to the issue by an astonishing 167.4 times, while non-institutional investors (NIIs) demonstrated their enthusiasm with a subscription rate of 122.7 times. Qualified institutional buyers (QIBs) also participated, subscribing to 50% of the quota reserved for them, further underscoring the broad appeal of this offering.
The IPO, valued at Rs 290 crore, consists entirely of a fresh equity issue of 1 crore shares and will remain open for bidding until January 9. The funds raised from this IPO are earmarked for several strategic initiatives, including supporting long-term working capital needs for the specialty cable division, capital expenditures for developing an electronic interlocking system, repayment of working capital term loans, and general corporate purposes.
Price Band and Market Premium
Investors looking to participate in the Quadrant Future Tek IPO can bid within a price band of Rs 275-290 per share. The minimum bid is set at 50 shares per lot, with the option to bid in multiples thereof. Ahead of the issue opening, the grey market premium (GMP) for Quadrant Future Tek remained robust, ranging between Rs 200-210, which translates to a remarkable 69% premium over the issue price. This strong GMP indicates positive market sentiment and investor expectations regarding the company’s future performance.
Analyst Recommendations: To Subscribe or Not?
Market analysts have largely recommended subscribing to the Quadrant Future Tek IPO, citing a favorable growth outlook for the Indian Specialty Cable and Train Control System markets. The company is strategically positioned to capitalize on emerging opportunities in these sectors. Analysts note that the company is valued at a FY24 P/E multiple of 79x at the post-issue capital of the upper price band, which is considered reasonable compared to its peers.
A strategic Memorandum of Understanding (MoU) with RailTel Corporation of India and a significant order worth Rs 78.6 crore from Chittaranjan Locomotive Works further bolster the company’s standing as a leading original equipment manufacturer (OEM). BP Wealth, a financial advisory firm, has expressed confidence in the IPO’s valuations, recommending a ‘Subscribe’ rating based on the company’s growth prospects and strategic partnerships.
Company Overview: Quadrant Future Tek
Quadrant Future Tek is a research-oriented company focused on developing next-generation train control and signaling systems under the KAVACH project for the Indian Railways. The company also operates a specialty cable manufacturing facility equipped with an Electron Beam Irradiation Centre, producing cables for railway rolling stock and the naval defense industry. This facility supports the end-to-end production of solar and electric vehicle (EV) cables, encompassing manufacturing, testing, and development of specialty cables and hardware for the Train Control and Signaling Division.
In FY24, Quadrant Future Tek reported a slight 1% year-on-year decline in revenue, while profit after tax (PAT) grew by 6%, indicating resilience in its financial performance amidst challenging market conditions.
Key Dates: Allotment and Listing
Investors eagerly awaiting the outcome of their bids can expect the allotment of shares for the Quadrant Future Tek IPO to be finalized on January 10, with the listing scheduled for January 14. This timeline is crucial for investors looking to gauge the market’s reception of the IPO and the company’s future trajectory.
Conclusion
The Quadrant Future Tek IPO stands out as a significant event in the current market landscape, reflecting strong investor confidence and a promising outlook for the company. With its strategic initiatives and robust market positioning, Quadrant Future Tek is poised to make a notable impact in the specialty cable and train control systems sectors. As the bidding process concludes, all eyes will be on the allotment and subsequent listing, marking a new chapter for this emerging player in the Indian market.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)