Quadrant Future Tek IPO Day 2 Live Updates: Issue booked 48.99x so far, retail portion subscribed 136.06x. Check GMP

The initial public offer of Quadrant Future Tek IPO has been subscribed 48.99 times on the second day of subscription today, at 17:00 IST, as per BSE data.

The initial share sale received bid for 28,41,22,850 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 137.21 times subscription while the quota for non-institutional investors got subscribed 87.22 times. The qualified institutional buyers (QIBs) part is booked 46%.

The initial public offer of Quadrant Future Tek IPO has been subscribed 48.57 times on the second day of subscription today, at 16:45 IST, as per BSE data.

The initial share sale received bid for 28,16,87,500 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 136.06 times subscription while the quota for non-institutional investors got subscribed 86.46 times. The qualified institutional buyers (QIBs) part is booked 46%.

• Automatic Train Protection
• Dispatch Centralized System
• Centralized Monitoring System

• The company faced a litigation dispute among promoters regarding alleged conflicts of interest involving board members engaged in competing activities. This issue was resolved amicably after reaching the NCLT. However, there remains a risk that similar disputes could occur in the future, potentially affecting the company’s operations and prospects.
• The company, along with Vivek Abrol and Mohan Krishan Abrol, has filed a settlement application with SEBI for delayed compliance, which could potentially impact its reputation if resolved unfavorably.

The initial public offer of Quadrant Future Tek IPO has been subscribed 44.53 times on the second day of subscription today, at 15:45 IST, as per BSE data.

The initial share sale received bid for 25,82,80,350 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 129.28 times subscription while the quota for non-institutional investors got subscribed 76.57 times. The qualified institutional buyers (QIBs) part is booked 26%.

The company has been actively expanding its operations in niche segments like aerospace, defense, and renewable energy sectors, which require specialized cable solutions.

• To continue focus on new products through constant research and development.
• Expansion of business to other areas of Automatic Train Protection and railway safety. 
• Expansion of cable business in new sectors
• Continue to grow share of the business from non promoter group companies

In CY23, the market size of Automatic Train Protection System segment was valued at USD 113 Mn. While, the market size of Dispatch Centralized System was valued at USD 29 Mn.

Quadrant Future Tek Limited is a research-focused company specializing in Train Control and Signalling Systems under the KAVACH project, enhancing safety and reliability for Indian Railways. It also manufactures specialty cables for railways, defence, and renewable energy, using advanced Electron Beam technology for superior performance.

The initial public offer of Quadrant Future Tek IPO has been subscribed 37.47 times on the second day of subscription today, at 14:00 IST, as per BSE data.

The initial share sale received bid for 21,73,03,500 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 111.93 times subscription while the quota for non-institutional investors got subscribed 62.36 times. The qualified institutional buyers (QIBs) part is booked 20%.

The Indian Specialty Cable and Train Control System market is expected to witness significant growth. The company's position as a leading Original Equipment Manufacturer (OEM) is bolstered by a strategic Memorandum of Understanding (MoU) with RailTel Corporation to supply KAVACH, along with a substantial ₹978.6 crore order secured from Chittaranjan Locomotive Works (CLW). These strong growth drivers make us recommend subscribing to the IPO.

However, with a small issue size of ₹290 crore and a 10% retail quota, the chances of allotment in the retail segment appear limited. In the bNII category, the likelihood of allotment improves with larger application sizes.

Over FY22-24, sale of transaction to related party constituted around 20-34% of revenue. Also, in H1FY25, it contributed ~44% of revenue from operations. Related party transaction is subject to conflict of interest, which could be detrimental to business functioning.

The Specialty Cables division manufactures and supplies both single and multi-core control and power cables, signaling cables, cables for locomotives and EMUs, as well as screened and un-screened single and multi-core power cables for naval ships. As of September 30, 2024, the Company’s Specialty Cable division had an installed capacity of 1,887.60 metric tonnes, which operated at an average capacity utilization of 50-55% during FY22-24.

In terms of revenue contribution within the Specialty Cable division, Indian Railways accounts for over 90%, with the remainder coming from Naval contracts under the defense sector.

The initial public offer of Quadrant Future Tek IPO has been subscribed 32.06 times on the second day of subscription today, at 12:42 IST, as per BSE data.

The initial share sale received bid for 18,59,67,900 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 99.62 times subscription while the quota for non-institutional investors got subscribed 50.97 times. The qualified institutional buyers (QIBs) part is booked 9%.

Its single manufacturing facility situated in Basma, Mohali, Punjab undertakes manufacturing and supply of Specialty Cables and Train Control & Signaling systems. Further, high capex equipment like Electron Beam Accelerator and polymer compounding line currently do not have backup. Any breakdown or failure of equipment and performance below expected levels of output could adversely affect its production performance.

The company primarily generates revenue through its specialty cable division, as revenue from Train Control & Signaling Division is yet to materialize. On an average, Top five customer and Top customer contributes over 75% and 49% of its revenue respectively. Agreements with any of its customers are not long term in nature, and orders secured are subject to termination. Any delay, cancellation or failure to secure orders in the future could adversely impact business performance.

Till date, the company has primarily generated revenue through its Specialty Cables division. Further, their indigenously designed and developed TCAS (KAVACH System) has received necessary approval from Indian Railway / RDSO to be deployed and accordingly the company has attracted orders worth ₹168.6mn (5 stations and 10 train sets) and ₹9,786.06mn (1200 locomotives) from CLW under India Railway. In addition to this, they also intend to develop electronic interlocking system by utilizing IPO proceeds. Their MoU with RailTel also boost their ability to secure TCAS orders from Indian Railways. We thereby assign “Subscribe” rating to the IPO.

Quadrant Future Tek is one the few manufacturers approved by RDSO, DGQA, and Indian Register of Shipping. 

The initial public offer of Quadrant Future Tek IPO has been subscribed 25.32 times on the second day of subscription today, at 11:12 IST, as per BSE data.

The initial share sale received bid for 14,68,46,400 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 81.41 times subscription while the quota for non-institutional investors got subscribed 38.44 times. The qualified institutional buyers (QIBs) part is booked 6%.

Over the years, the company has leveraged its expertise and experience to broaden its operations by including non-Promoter Group clients. The firm believes this has helped decrease their reliance on business from Promoter Group clients. The revenue generated from non-Promoter Group clients rose to 83.65% of their total revenue from operations in Fiscal 2024, compared to 65.81% in Fiscal 2022. For the six-month period ending September 30, 2024, the revenue from non-Promoter Group clients accounted for 62.99% of their total revenue from operations.

The company manufactures cables which meet stringent quality requirements and are used across multiple industries including railways, naval defense, renewable energy, and electric vehicle. The wires are equipped with Electron beam (E-beam) technology increases the strength, improves tensile strength, reduces flame spreading and smoke in case of fire, doesn’t affect performance at elevated temperatures and prevents short circuit.

The initial public offer of Quadrant Future Tek IPO has been subscribed 19.66 times on the second day of subscription today, at 10:18 IST, as per BSE data.

The initial share sale received bid for 11,40,50,100 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 65.08 times subscription while the quota for non-institutional investors got subscribed 28.62 times. The qualified institutional buyers (QIBs) part is booked 5%.

• Innovation and technological development undertaken by the Company for building Automatic Train Protection Systems.
• Entered into an exclusive Memorandum of Understanding with RailTel for delivering the specific targeted opportunities related to KAVACH in Indian Railways and other Countries Railways.

Quadrant Future Tek Limited possessing domain expertise in Train Control and Signalling Systems plans to continuously invest in research, design, and innovation to build safer, valuable, cost-effective solutions. 

The company have invested a significant amount towards capital expenditure aggregating to ₹594.41 million till date in developing platform for Automatic Train Protection system, including TCAS and intend to continue investing in upgradation of the said system including addition of newer technologies to enhance design and development capabilities, particularly with a view to expand operations. Investors looking to invest can invest in the IPO for the long term.

Quadrant's innovative signaling solutions are powered by its in-house design and development expertise. To meet the safety requirements of Indian Railways, the business has created a patented Train Collision Avoidance System. High reliability and cost competitiveness are ensured by its state-of-the-art facilities in Bengaluru and Mohali, which facilitate integrated operations from software design to hardware manufacture.

The market opportunity for KAVACH, India's indigenous Automatic Train Protection (ATP) system, is vast, driven by Indian Railways’ commitment to enhancing safety and efficiency. With plans to implement KAVACH across 44,000 km by 2029, including 20,000 locomotives and 8,000 stations, the project represents significant investment potential.

• Innovative Development in Automatic Train Protection Systems
• Strategic Partnership with RailTel for KAVACH Deployment
• In-House Design and Development for Rail Signalling Solutions
• Unique Technology for High-Performance Specialty Cables
• Advanced Manufacturing Facilities with Quality Focus
• Global Demand for Specialty Cables in EV and Renewable Sectors
• Market opportunity for KAVACH

Quadrant Future Tek Limited stands out with a healthy 24% EBITDA margin and impressive returns, including a 21% ROCE and 33% ROE, which highlight its profitability and operational efficiency. The company’s EV/order book ratio is reasonable at 1.3x. Considering these factors, along with its advanced technology, expanding order book, and long-term growth prospects, we assign a Subscribe rating to this IPO.

Quadrant Future Tek IPO GMP today is +210. This indicates Quadrant Future Tek share price was trading at a premium of ₹210 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Quadrant Future Tek share price is indicated at ₹500 apiece, which is 72.41% higher than the IPO price of ₹290.

Analyzing the grey market activities from the past 10 sessions, the IPO's GMP shows an upward trend today, indicating a robust listing. The minimum GMP recorded is ₹0, while the maximum GMP stands at ₹210, as per insights from investorgain.com experts.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

The initial public offer of Quadrant Future Tek IPO has been subscribed 15.81 times on the first day of subscription today, at 17:00 IST, as per BSE data.

The initial share sale received bid for 9,19,99,350 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 54.84 times subscription while the quota for non-institutional investors got subscribed 21.51 times. The qualified institutional buyers (QIBs) part is booked 5%.

The initial public offer of Quadrant Future Tek IPO has been subscribed 15.35 times on the first day of subscription today, at 17:00 IST, as per BSE data.

The initial share sale received bid for 9,19,99,350 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 54.84 times subscription while the quota for non-institutional investors got subscribed 21.51 times. The qualified institutional buyers (QIBs) part is booked 5%.

• To continue focus on new products through constant research and development.
• Make in India and focus on indigenization.
• Expansion of business to other areas of Automatic Train Protection and railway safety.
• Continue to grow share of their business from non-promoter group companies.
• Expansion of cable business in new sectors.

The company’s Railway Signalling and Embedded System Design center in Bengaluru and Hyderabad employs 28 people, representing about 9.49% of their workforce as of Oct’24. These are specialized in developing advanced Automatic Train Protection systems that are cost-competitive and innovative.

The initial public offer of Quadrant Future Tek IPO has been subscribed 12.10 times on the first day of subscription today, at 15:09 IST, as per BSE data.

The initial share sale received bid for 7,01,61,850 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 44.38 times subscription while the quota for non-institutional investors got subscribed 14.73 times. The qualified institutional buyers (QIBs) part is booked 2%.

Quadrant has implemented backward integration for polymer compounding, copper processing, and electronic manufacturing services (EMS) to optimize costs and maintain supply chain control.

• 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.
• Advanced manufacturing facilities with a diverse range of power and control cables with a focus on innovation and cost competitiveness.

The initial public offer of Quadrant Future Tek IPO has been subscribed 10.19 times on the first day of subscription today, at 14:06 IST, as per BSE data.

The initial share sale received bid for 5,91,10,450 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 37.96 times subscription while the quota for non-institutional investors got subscribed 12.04 times. The qualified institutional buyers (QIBs) part is booked 1%.

The company produces high-performance cables characterized by high melting points, lightweight design, non-toxicity, and durability. These cables are also cross-sold to the naval, defence, and electric vehicle (EV) sectors, enhancing cost efficiency and safety.

Railtel is among its major clients, with the company securing an order for 1,200 locomotives, scheduled for completion by November 2024.

The initial public offer of Quadrant Future Tek IPO has been subscribed 7.82 times on the first day of subscription today, at 12:45 IST, as per BSE data.

The initial share sale received bid for 4,53,69,450 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 29.58 times subscription while the quota for non-institutional investors got subscribed 8.95 times. The qualified institutional buyers (QIBs) part is booked 1%. 

• Single manufacturing unit
• Failure to deliver the product
• Less experience in Train Control 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 initial public offer of Quadrant Future Tek IPO has been subscribed 5.65 times on the first day of subscription today, at 11:54 IST, as per BSE data.

The initial share sale received bid for 3,27,52,150 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 22.42 times subscription while the quota for non-institutional investors got subscribed 5.75 times. The qualified institutional buyers (QIBs) part is yet to be booked.

The company caters to two different industries, namely (i) Indian Specialty Cables Industry with niche technology for manufacture of Speciality cables which has application in various industries including Railways, Naval Defence, Solar power & Electric Vehicle; and (ii) Train Control and Signalling System under Railways Industry towards Automatic Train Protection (ATP) and Automatic Train Operations (ATO) systems including KAVACH and growing demand in related technologies and development of new systems to enable safety and capacity augmentation in railways.

Quadrant Future Tek is currently valued at a price-to-earnings (P/E) ratio of 59x based on FY24 earnings, in line with industry peers also at a P/E of 59x, reflecting its growth potential. As Quadrant Future Tek scales operations, enhances integration and broadens its market reach, the company is well-positioned for sustainable growth.

Despite slower product adaptation by the total addressable market, Quadrant Future Tek has strategic positioning and a robust pipeline, therefore we recommend SUBSCRIBE, Quadrant Future Tek for long-term gains.

Quadrant Future Tek has experienced a compound annual growth rate (CAGR) of 44.85%, increasing its revenue from ₹72.83 crore in FY21 to ₹152.80 crore in FY23, with ₹100.37 crore reported for the nine-month period ending December 31, 2023. The company’s advantages include its technological know-how, comprehensive manufacturing capabilities, and solid partnerships, supported by experienced leadership under Mohit Vohra (Managing Director).

The growing demand for automated railway safety systems under the “Make in India” initiative and increasing applications for E-beam cables in renewable energy and EV sectors present significant growth opportunities. With its innovative solutions, robust financial performance, and focus on quality, Quadrant Future Tek Limited is well positioned for sustained growth and offers a promising investment opportunity.

1. Funding long-term working capital requirements of the Company

2. Capital expenditure for the development of Electronic Interlocking System;

3. Prepayment or repayment of all or a portion of outstanding working capital

term

4. Loan availed by the Company and

5. General corporate purposes.

The initial public offer of Quadrant Future Tek IPO has been subscribed 56% on the first day of subscription today, at 10:15 IST, as per BSE data.

The initial share sale received bid for 32,53,050 shares against 57,99,999 shares on offer, according to BSE.

The portion for retail investors received 2.01 times subscription while the quota for non-institutional investors got subscribed 72%. The qualified institutional buyers (QIBs) part is yet to be booked.