| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 410 to ₹ 432 | 34 | 19th Dec, 2024 – 23rd Dec, 2024 | ₹ 838.91 Cr |
About Transrail Lighting Ltd IPO
Transrail Lighting Ltd. (TLL) is an engineering, procurement, and construction company primarily focusing on power transmission and distribution (T&D). The company is backed by a four-decade-long legacy of providing comprehensive power transmission and distribution solutions. Other than T&D, the company also operates in other business verticals such as civil construction, poles & lighting and railways. TLL has completed more than 200 projects in the power T&D vertical since its inception. The company operates both in India and internationally, primarily across Asia and Africa. The geographic split of revenue (as of FY24) is as follows: India (41.5%) and international (58.6%) The company has footprints in 58 countries, including Bangladesh, Kenya, Tanzania, Niger, Nigeria, Mali, Cameroon, Finland, Poland, and Nicaragua, encompassing turnkey EPCs and supply projects. As of June 30, 2024, the company has undertaken EPC projects covering 34,654 circuit kilometres (CKM) of transmission lines and 30,000 CKM of distribution lines, both domestically and internationally. The company provides EPC services for 765 kilovolt (kV) substations. The company caters to a wide client base in India, including central public sector undertakings under the Ministry of Power of India and state government-run and private power T&D companies. The revenue breakup from domestic operations (as of FY24) is as follows: Central PSU (81.1%), Private parties (17.9%) and state board (1.0%). Revenue break up from international activities (as of FY24) is as follows: Asia – other than SAARC (4.2%), Africa (45.1%), Americas (2.4%), Europe (0.8%) and SAARC (47.5%). The company operates with the help of four manufacturing units: one in Deoli, one in Vadodara and two units in Silvassa with impressive capacity utilization of 97.3%, 95.8%, 81.1% and 99.4%, respectively. The revenue split between business verticals (as of FY24) is as follows: Power T&D (83.8%), Civil Construction (9.3%), Railways (2.4%) and Poles & Lighting (4.4%).
Objective of the Transrail Lighting Ltd IPO
The company proposes to utilize net proceeds towards funding the following objects:
- Funding incremental working capital requirements of the company;
- Funding capital expenditure of the company; and
- General corporate purposes
Rationale To Transrail Lighting Ltd IPO
Strong order book coupled with strategic expansion ensures revenue visibility
TLL boasts a strong order book supported by a healthy mix of international and domestic clients. The majority of the order book consists of orders from the T&D vertical (90.6%), which remains the key area of focus and specialization. Civil construction (7.2%), Railways (1.6%), and Poles and lighting (0.6%) follow. The order book as of Q1FY25 stands at Rs. 1,02,131 million, which highlights healthy revenue visibility. The company also delivered consistently steady topline growth, further bolstering its position and underscoring its ability to retain and acquire new customers (grew its global reach from 46 countries in FY21 to 58 countries in Q1FY25). TLL’s plan to strengthen its presence in countries such as South and West Africa, Southeast Asia and SAARC further enhances its order book horizon while aiding in achieving economies of scale. Moreover, the company further plans to expand its footprint in current and new markets like LatAm, Middle-East and North African countries by leveraging resources and experiences achieved in the past.
Integrated service approach and strategic initiatives enhance EPC capabilities
The company operates its EPC business in an integrated manner, having developed key in-house competencies and resources to deliver projects from conceptualization to completion. TLL utilizes industry-leading design and engineering software, including PLS Tower, PLS Poles, I Tower, Bocad, Staad Pro, PLS Star, PLS CAAD, PLS Lit, DiLux, AGI 32, Autocad 3D, Solidworks, and more, ensuring it provides cutting-edge solutions in execution safety and quality. Its in-house integrated model includes a dedicated design and engineering team for each business vertical, enabling timely project completion without compromising on quality and allowing the company to capture a larger proportion of the EPC value chain. To further streamline processes and improve profitability, TLL aims to achieve full backward integration, reducing dependency on third-party suppliers for key products. Moving forward, the company plans to expand its footprint into allied and ancillary infrastructure sectors. It proposes acquiring the BH business of Gammon Engineers and Contractors Private Limited to broaden its scope to hydropower projects. Additionally, the company plans to enhance its presence in the solar EPC industry by undertaking turnkey projects related to solar rooftops, solar streetlights, and ground-mounted solar projects. These strategic initiatives will enable TLL to diversify its offerings and expand its sectoral horizon.
Valuation of Transrail Lighting Ltd IPO
Transrail Lighting Ltd. (TLL) is a leading EPC company with a market share of 8-10% in the EPC sector, specializing in power transmission and distribution. The company maintains a strong order book, ensuring revenue visibility and steady topline growth, supported by a mix of international and domestic clients. TLL’s strategic expansion into emerging markets and new regions aims to achieve economies of scale and drive global growth. The company’s integrated approach to EPC projects, using industry-leading design and engineering software, ensures high-quality execution. Furthermore, plans to diversify into allied infrastructure sectors and the solar EPC industry will broaden its market reach and reinforce its position in the infrastructure sector. India’s power transmission and distribution system has significantly expanded, with an estimated investment of Rs. 3.0 trillion expected in the transmission sector during FY2025-29 period. Additionally, the distribution segment is projected to attract investments worth Rs 3-4 trillion during the same period, driven by the government’s initiatives to enhance electricity access and ensure 24×7 power for all under the Revamped Distribution Sector Scheme. The substantial investments in the power T&D sector will provide TLL with ample opportunities to expand its market presence, secure new projects, and achieve economies of scale. The company reported strong financial growth between FY22 and FY24, with a CAGR of 32.5% in revenue, 51.8% in EBITDA, and 89.8% in PAT. The company is valued at a P/E ratio of 22.1x on the upper price band based on FY24 earnings, which is lower than the average P/E of the industry. Given its strong position in the market, the company is poised to capitalize on emerging market opportunities. Therefore, we recommend a “SUBSCRIBE” rating for the issue from a medium to long-term perspective.
What is the Transrail Lighting Ltd IPO?
Transrail Lighting IPO is a book built issue of Rs 838.91 crores. The issue is a combination of fresh issue of 0.93 crore shares aggregating to Rs 400.00 crores and offer for sale of 1.02 crore shares aggregating to Rs 438.91 crores. Login to your account now.
How to apply for the Transrail Lighting Ltd IPO through StoxBox?
To apply for the Transrail Lighting Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Transrail Lighting Ltd IPO open?
Transrail Lighting Ltd IPO is opening on 19th December 2024. Apply Now
What is the lot size of the Transrail Lighting Ltd IPO?
The Lot Size of Transrail Lighting Ltd IPO is 34 equity shares . Login to your account now
When is the Transrail Lighting Ltd IPO allotment date?
The allotment Date for Transrail Lighting Ltd IPO is 24th December 2024. Login to your account now.
When is the Transrail Lighting Ltd IPO listing date?
The listing Date for Transrail Lighting Ltd IPO is 27th December 2024. Login to your account now
What is the minimum investment required for the Transrail Lighting Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,688. Login to your account now
What is the maximum investment allowed for the Transrail Lighting Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 190,944. Login to your account now
What are the risks associated with investing in the Transrail Lighting Ltd IPO?
- The company has an outstanding FIR filed by the Central Bureau of Investigation (CBI), Anti-Corruption Bureau, Lucknow, Uttar Pradesh, regarding the Gomti River Project.
- Since Transrail Lighting Ltd.’s project management and turnkey EPC contracts have long execution periods and are prone to time overruns, the estimated project costs and revenue projections may differ from the actual costs incurred and revenues generated.
- The company is exposed to foreign currency fluctuation risks, particularly in relation to the import of raw materials, receivables from foreign projects and trade receivables.
When will the Transrail Lighting Ltd IPO shares be credited to my Demat account?
The Transrail Lighting Ltd IPO be credited to the account on allotment date which is 26th December 2024. Login to your account now
Where can I find the Transrail Lighting Ltd IPO prospectus?
The prospectus of Transrail Lighting Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Transrail Lighting Ltd IPO?
| IPO Open Date | Thursday, December 19, 2024 |
| IPO Close Date | Monday, December 23, 2024 |
| Basis of Allotment | Tuesday, December 24, 2024 |
| Initiation of Refunds | Thursday, December 26, 2024 |
| Credit of Shares to Demat | Thursday, December 26, 2024 |
| Listing Date | Friday, December 27, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on December 23, 2024 |
