| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 275 to ₹ 290 | 50 | 07th Jan, 2025 – 09th Jan, 2025 | ₹ 290.00 Cr |
About Quadrant Future Tek Limited IPO
Quadrant Future Tek Limited is a research-oriented organization engaged in developing next-generation Train Control and Signalling Systems under the KAVACH project of the Indian Railways. These systems offer the highest level of safety and reliability to rail passengers. The company operates a speciality cable manufacturing facility equipped with an Electron Beam Irradiation Centre. The speciality cables manufactured by the company are used in railway rolling stock and the naval (defence) industry. Additionally, the facility boasts end-to-end infrastructure capabilities for the production of Solar and EV cables. The company has a dedicated facility for manufacturing, testing, researching, and developing speciality cables and producing the hardware required for the Train Control and Signalling Division. This facility is located at Village Basma, District Mohali. The company offers speciality cables for industrial usage and other applications where fire and safety, lightweight and long-term performance are of utmost importance. The company is accredited with various national and international certifications, namely, NQA Certification Limited and ROHS Certification Private Limited for its speciality cables division. The company have a wide product portfolio, which includes railways rolling stock cables, naval defence, marine cables, solar PV cables, automotive cables, and connectors & junction boxes. The company also provides end-to-end solutions for electrical 190 connectors and wiring harnesses with the complex arrangement of various wires and cables as per the client’s demand.
Objective of the Quadrant Future Tek Limited IPO
The company proposes to utilize net proceeds towards funding the following objects:
- Funding long-term working capital requirements of company;
- Capital expenditure for development of an Electronic Interlocking System;
- Prepayment or repayment of all or a portion of outstanding working capital term loan availed by the Company; and
- General corporate purposes.
Rationale To Quadrant Future Tek Limited IPO
Entered into an exclusive Memorandum of Understanding with RailTel for delivering the specific targeted opportunities related to KAVACH in Indian Railways and other country’s railways
On May 1, 2024, the company entered into a Memorandum of Understanding (MoU) with RailTel Corporation of India Limited (“RailTel”), a Government of India undertaking. The MoU establishes a framework of cooperation to:
(i) Define intended opportunities to pursue under the agreement,
(ii) Position KAVACH as an Automatic Train Protection System for railways in India and abroad, and
(iii) Expand and realign the targeted scope to include opportunities within other countries’ railway systems.
The company has partnered exclusively with RailTel to deliver specific opportunities related to KAVACH for Indian Railways and other international railway systems. Under the terms of the MoU, RailTel has committed not to solicit, negotiate, accept, or engage with any other party regarding this specific business opportunity, ensuring exclusive collaboration with the company. This agreement makes the company eligible to supply KAVACH equipment as an OEM to RailTel for projects awarded to RailTel, including the implementation of the KAVACH system both in India and internationally. The MoU remains valid until terminated by either party. RailTel will lead stakeholder engagements within Indian Railways and international railways while jointly marketing and implementing KAVACH technology with the company. The company will be responsible for technology maintenance and upgrades in compliance with RDSO specifications throughout the project lifecycle. Additionally, the company will meet RDSO requirements to qualify for future KAVACH tenders, provide technical expertise, expert manpower, and necessary technology solutions, and jointly participate with RailTel in KAVACH tenders for Indian and international railway projects.
Advanced manufacturing facilities with a diverse range of power and control cables with a focus on innovation and cost competitiveness
The company is one of the few manufacturers in India approved by RDSO, DGQA, and the Indian Register of Shipping, specializing in single core and multi-core control and power cables, as well as signalling cables for railway coaches, locomotives, and EMUs. It also supplies cables for naval ships. In FY22, the company began supplying cables for naval ships, generating Rs. 30.5 million in revenue, which increased to Rs. 369.2 million in FY23, making up 24.2% of total sales. Its competitive advantage stems from its Railway Signalling and Embedded System Design team, product innovation, and commitment to quality. All products are manufactured at its Basma, District Mohali, Punjab facility, which holds quality management certifications. The company handles all operations in-house, from raw material sourcing to various manufacturing processes, ensuring cost control and high quality. The facility has an installed production capacity of 1,887.6 MTPA as of September 30, 2024, with regular product inspections and quality checks. Advanced testing procedures for copper cables include electrical, mechanical, and chemical tests using specialized equipment. Additionally, the company has invested in a 2.5 MeV Electron Beam Industrial Accelerator for efficient cable manufacturing and complies with AERB requirements. The company received Fresh Registration for the “List of RDSO Vendors for Developmental Orders” on December 14, 2017 and the company have over six years of experience in manufacturing irradiated wires. The company’s in-house research facility, coupled with the approval of RDSO and DGQA, constitutes a high barrier to entry for other companies to emulate.
Valuation of Quadrant Future Tek Limited IPO
Quadrant Future Tek Ltd. is a research-focused company developing advanced Train Control and Signalling Systems for the Indian Railways under the KAVACH project. It has two main divisions: The Specialty Cables Division and the Train Control and Signalling Division. It also has a manufacturing facility featuring an Electron Beam Irradiation Centre. The domestic speciality cable market was valued at USD 536 million in 2023 and is expected to reach 589 million in 2024. The Indian Train Control System market was valued at USD 159 million in 2023, with projections to rise to USD 208 million in 2024, growing at a CAGR of 12.7% from 2024 to 2030. In the interim budget of FY2024-25, the FM allocated Rs. 2.55 lakh crore to Indian Railways, a 5.8% increase. The KAVACH automatic train protection system aims to enhance safety, expanding coverage to 4,500 kilometres next year and targeting 44,000 kilometres over five years. Additional tenders for 6,000 kilometres are expected soon. Financially, the company’s revenue from operations grew from Rs. 1,042.5 million in FY22 to Rs. 1,518.2 million in FY24, marking a CAGR of 20.6%. Its EBITDA increased from Rs. 95 million to Rs. 366.6 million during the same period. A strategic MoU with RailTel Corp. and a Rs. 78.6 crore order from Chittaranjan Locomotive Works strengthen the company’s position as a leading Original Equipment Manufacturer (OEM). The issue is valued at a price-to-earnings (P/E) ratio of 59.1x on the upper price band based on FY24 earnings, which is deemed fair compared to its peers. Considering the above compelling factors, we recommend a “SUBSCRIBE” rating for this issue.
What is the Quadrant Future Tek Limited IPO?
Quadrant Future Tek IPO is a book built issue of Rs 290.00 crores. The issue is entirely a fresh issue of 1.00 crore shares. Login to your account now.
How to apply for the Quadrant Future Tek Limited IPO through StoxBox?
To apply for the Quadrant Future Tek Limited IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Quadrant Future Tek Limited IPO open?
Quadrant Future Tek Limited IPO is opening on 07th January 2025. Apply Now
What is the lot size of the Quadrant Future Tek Limited IPO?
The Lot Size of Quadrant Future Tek Limited IPO is 50 equity shares. Login to your account now
When is the Quadrant Future Tek Limited IPO allotment date?
The allotment Date for Quadrant Future Tek Limited IPO is 10th January 2024. Login to your account now.
When is the Quadrant Future Tek Limited IPO listing date?
The listing Date for Quadrant Future Tek Limited IPO is 14th january 2025. Login to your account now
What is the minimum investment required for the Quadrant Future Tek Limited IPO?
In the Retail segment the minimum investment required is Rs. 14,500. Login to your account now
What is the maximum investment allowed for the Quadrant Future Tek Limited IPO?
In the Retail segment the maximum investment requirement is Rs. 188,500. Login to your account now
What are the risks associated with investing in the Quadrant Future Tek Limited IPO?
- Single manufacturing unit: The business is dependent on a single manufacturing facility and is subject to certain risks in the manufacturing process. Any slowdown or shutdown in the manufacturing operations could adversely affect the business, financial condition, and results of operations.
- Failure to deliver the product: On December 12, 2024, the company received a purchase order from Chittaranjan Locomotive Works (CLW) for the supply and installation of Onboard Kavach equipment for 1,200 locomotives, valued at Rs. 978.6 crores, including taxes. Failure to meet obligations, such as timely delivery and maintenance, could negatively impact business, financial performance, and future opportunities in similar tenders.
- Less experience in Train Control Systems: The company has recently expanded into Train Control Systems, making it difficult to predict its performance and future prospects. Further, promoters lack experience in this segment of the railway industry. If the company cannot effectively scale and manage its business or implement strategies, it could adversely affect the quality of its products and services.
When will the Quadrant Future Tek Limited IPO shares be credited to my Demat account?
The Quadrant Future Tek Limited IPO be credited to the account on allotment date which is 13th January 2025. Login to your account now
Where can I find the Quadrant Future Tek Limited IPO prospectus?
The prospectus of Quadrant Future Tek Limited IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Quadrant Future Tek Limited IPO?
| IPO Open Date | Tuesday, January 7, 2025 |
| IPO Close Date | Thursday, January 9, 2025 |
| Basis of Allotment | Friday, January 10, 2025 |
| Initiation of Refunds | Monday, January 13, 2025 |
| Credit of Shares to Demat | Monday, January 13, 2025 |
| Listing Date | Tuesday, January 14, 2025 |
| Cut-off time for UPI mandate confirmation | 5 PM on January 9, 2025 |
