Quadrant Future Tek Limited, a Mohali-based, research-driven company, has received the final green light from the Securities and Exchange Board of India (SEBI) to raise ₹275 crore through its initial public offering (IPO). With its IPO application submitted on June 2, 2024, the company is now poised to tap into the equity market to fund its ambitious growth plans. Quadrant Future Tek, founded in 2015, specializes in next-generation train control and signalling systems, which are designed to offer enhanced safety and dependability for rail passengers. The company also operates in several other high-tech domains, including electron beam irradiation and E-beam cable manufacturing.
As Quadrant Future Tek prepares to enter the public market, this article will cover everything you need to know about the company, its financial performance, and the specifics of the upcoming IPO.
Overview of Quadrant Future Tek’s Business Operations
Quadrant Future Tek Limited stands out for its innovative solutions in the railway and defence sectors, offering advanced train control systems, signalling technologies, and specialised cables. Its product lineup includes next-gen railway rolling stock equipment and speciality cables tailored for defence applications.
Key Focus Areas
- Train Control and Signalling Systems
Quadrant’s core focus is on developing cutting-edge train control and signalling systems, designed to elevate the safety, reliability, and operational efficiency of railways. These systems provide state-of-the-art solutions to ensure passenger safety while enhancing the overall infrastructure of the railway networks. - Electron Beam Irradiation Centre
The company operates a specialised irradiation facility, which supports the production of high-quality E-beam cables. These cables are essential in a wide range of sectors, including railways, defence, and electric vehicles (EVs). - Wires and Cables for Defence and Railways
Quadrant Future Tek supplies specialty cables to the Indian Navy and other defence sectors. In addition, the company is a key player in the production of wires and cables for railway rolling stock, which has become a significant revenue driver for the company.
Infrastructure and Production Facilities
Quadrant Future Tek boasts advanced production facilities and design centres spread across multiple locations:
- Basma, Mohali: The company’s primary production plant is situated here, focusing on the manufacturing of wires, cables, and other high-tech products.
- Bengaluru and Hyderabad: The company operates the Railway Signalling & Embedded System Design Centres in these tech hubs, where the next generation of railway technologies are developed.
The company’s emphasis on research and development (R&D) has helped it establish a reputation as a leader in its field. Its products are designed to meet stringent quality and safety standards, making it a trusted supplier for critical infrastructure projects.
IPO Details: Raising ₹275 Crore
Quadrant Future Tek’s initial public offering will consist of fresh equity shares with a face value of ₹10 each, and the total issue size will be ₹275 crore. The funds raised through this IPO will be instrumental in driving the company’s future growth. Let’s take a look at how the proceeds will be allocated.
Utilisation of Funds
- ₹175 crore will be used to meet the company’s long-term working capital requirements, ensuring sustained operations and helping scale up production.
- ₹25 crore will be allocated to the development of the Electronic Interlocking System, a critical part of the company’s railway infrastructure offerings.
- ₹25 crore will go towards the prepayment or partial repayment of the company’s existing working capital term loan, reducing its debt burden and improving financial flexibility.
- The remaining funds will be used for general corporate purposes, helping the company to stay competitive and invest in future opportunities.
Key Partners in the IPO Process
- Sundae Capital Advisors Private Ltd has been appointed as the sole book-running lead manager, ensuring a smooth IPO process and efficient fund mobilisation.
- Link Intime India Private Limited will serve as the registrar of the issue, handling all administrative aspects related to the IPO.
Financial Performance of Quadrant Future Tek
Quadrant Future Tek Limited has demonstrated strong financial growth, driven primarily by increased sales to the railways and defence sectors. The company’s revenue from operations grew by an impressive 46.56% in fiscal year 2023, reaching ₹152.80 crore, compared to ₹104.26 crore in the previous year. This remarkable growth is a testament to the company’s ability to secure large contracts and consistently deliver high-quality products to its clients.
Profit Growth
One of the most striking aspects of the company’s financials is its substantial profit growth. Profit after tax (PAT) surged from ₹1.94 crore in FY22 to an impressive ₹13.90 crore in FY23. This substantial increase can be attributed to:
- Higher sales of wires and cables to both the railway and defence sectors.
- Efficient cost management and operational scaling, which helped improve margins.
Revenue Breakdown
The company derives most of its revenue from the sales of wires and cables, which cater to both the railways and defence sectors. Here’s a breakdown of the company’s revenue sources as of December 31, 2023:
- 74.05% of revenue came from the sale of wires and cables for the railway sector.
- 25.08% of revenue was generated from sales to the defence sector.
This diversified customer base has helped Quadrant Future Tek maintain financial stability and has positioned it as a reliable partner for large-scale infrastructure projects.
Strategic Importance of the IPO
Quadrant Future Tek’s IPO comes at a time when the Indian government is heavily investing in railway modernisation and defence infrastructure. With a focus on enhancing railway safety systems and supplying high-quality cables for critical applications, the company is well-positioned to benefit from these sectors’ robust growth. The proceeds from the IPO will allow the company to expand its operations, reduce debt, and invest in cutting-edge technologies, thus enhancing its competitive edge.
By bolstering its working capital and continuing to develop high-tech solutions like the Electronic Interlocking System, Quadrant Future Tek aims to further strengthen its market presence and deliver superior products to its clients.
Conclusion: A Promising Future for Quadrant Future Tek Limited
With its SEBI-approved ₹275 crore IPO, Quadrant Future Tek Limited is set to capitalise on its strong market position and robust growth trajectory. The company’s innovative focus on next-gen train control systems, speciality cables, and electron beam technologies makes it a key player in the railway and defence industries. The funds raised through the IPO will be instrumental in supporting its long-term growth plans, helping it stay ahead of competitors and meet the increasing demand for its products.
As the Indian railway and defence sectors continue to expand, Quadrant Future Tek is well-equipped to deliver cutting-edge solutions and capitalise on new opportunities in these dynamic markets.
Disclaimer: The views & recommendations above are those of individual analysts, experts and broking companies, not of OSTP Media. We advise investors to check with certified experts before making any investment decision.
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