The IPO frenzy continues. Quadrant Future Tek and Capital Infra Trust InvIT IPOs have opened for bidding on January 07. The IPOs will close on January 09. Quadrant Future Tek aims to raise Rs 290 crore from the primary markets while Capital Infra Trust InvIT targets raising Rs 1578 crore. What would be a better bet for you? Here are details about both the IPOs that you need to consider before you subscribe:
Quadrant Future Tek IPO
The Punjab-based Quadrant Future Tek manufactures speciality cables for railway rolling stock and the naval (defence) industry, focusing on electron beam-irradiated cables for high-performance, fire safety, and lightweight applications. It has expanded its portfolio to develop an automatic train protection system using RFID technology to prevent train collisions, under the RDSO’s Kavach project.
Financials: The company’s revenue grew to Rs 151.8 crore in FY24 from Rs 104.3 crore in FY22, a compounding growth of 20.6% on year. Its net profit stood at Rs 14.7 crore in FY24 against Rs 1.9 crore in FY22. The company’s EBITDA margin stands at 24.1% and a profit margin of 9.7% in FY24. However, the company reported a loss of Rs 12.1 crore in the first half of FY25.
Valuation: At the upper price band of Rs 290, the company is available at a P/E of 78.8x (FY24), which appears expensive compared to peers, said Geojit Financial Services in an IPO note. However, its entry into Train Control Systems and government support for railway modernization are positives. “Despite concerns over negative PAT and limited experience in Train Control Systems, we recommend subscribing on a short-term basis for high-risk investors,” said Geojit Financial Services.
Objective: Quadrant Future Tek issue is entirely a fresh issue, which means the entire amount raised through IPO will go to the company. The company stated that it will use the funds to purchase machinery, long-term working capital requirements for the speciality cable division (Rs 149.7 crore), capital expenditure (Rs 24.4 crore), repayment of loans (Rs 23.6 crore), and cover general corporate purposes
Risk factors: Its business is dependent on a single manufacturing facility, and is subject to certain risks in its manufacturing process. Any slowdown or shutdown in the company’s manufacturing operations can affect its business, financial condition and results of operations.
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