The much-anticipated Transrail Lighting Limited IPO, which opened for bidding on December 19, 2024, has drawn significant attention from investors. With its tentative listing date set for December 27, 2024, the IPO is expected to deliver promising returns based on its strong fundamentals and financial performance. Link Intime India Pvt. Ltd., serving as the registrar for this book-built issue, will announce the allotment status on December 24, 2024. Below is a detailed analysis of Transrail Lighting Limited IPO, its financial metrics, growth potential, and investment considerations.
IPO Overview and Key Details
Transrail Lighting Limited has issued a total of 1,94,09,257 shares, comprising a fresh issue of 93,00,000 shares and an offer for sale (OFS) of 1,02,00,000 shares. With a face value of Rs 2 per share, the price band is set between Rs 410 and Rs 432, targeting a total issue size of Rs 838.91 crore. The lot size for bidding is a minimum of 34 shares. Investors have until December 23, 2024, to participate in the bidding process.
Key Dates and Figures:
| Particular | Date/Details |
|---|---|
| IPO Open Date | December 19, 2024 |
| IPO Close Date | December 23, 2024 |
| Issue Size | Rs 838.91 crore |
| IPO Allotment Date | December 24, 2024 |
| Refund Initiation Date | December 26, 2024 |
| IPO Listing Date | December 27, 2024 |
| Price Band | Rs 410 to Rs 432 |
| Lot Size | 34 shares |
| Face Value | Rs 2 per share |
| Issue Type | Book-Built Issue |
| Listing On | BSE & NSE |
The shares are divided among retail investors, qualified institutional buyers (QIBs), non-institutional investors (NIIs), and employees.
Share Allocation:
| Investor Category | Shares Offered | Quota (%) |
| Retail Investors | 66,42,805 | 34.22% |
| Qualified Institutional Buyers (QIB) | 37,95,889 | 19.56% |
| Non-Institutional Investors (NII) | 28,46,917 | 14.67% |
| Employees | 4,29,814 | 2.21% |
| Total | 1,94,09,257 | 100% |
Financial Highlights
The financial performance of Transrail Lighting Limited has been noteworthy, with significant growth in revenue and profit margins. Below is a summary of the company’s financial health over recent years:
Financial Metrics (in crores):
| Year Ended | 30th June 2024 | 31st March 2024 | 31st March 2023 | 31st March 2022 |
| Total Assets | 4,836.17 | 4,620.61 | 3,445.49 | 2,841.87 |
| Total Debt | 603.43 | 643.19 | 604.92 | 469.12 |
| Revenue | 929.70 | 4,130.00 | 3,172.03 | 2,357.20 |
| Profit After Tax (PAT) | 51.47 | 233.21 | 107.57 | 64.71 |
| Net Worth | 1,140.65 | 1,075.87 | 709.15 | 599.32 |
Revenue surged by 30.2% between FY23 and FY24, while PAT rose by an impressive 116.8% during the same period. The net worth increased substantially, demonstrating the company’s financial robustness.
Key Performance Indicators:
| Indicator | Value |
| Earnings Per Share (EPS) | 15.42 |
| Price-to-Earnings (PE) Ratio | 23.15 |
| Price-to-Book (PB) Ratio | 4.70 |
| Return on Equity (ROE) | 24.41% |
| Profit Margin | 5.65% |
| Debt-to-Equity Ratio | 0.56 |
Strong technical and financial metrics, such as an EPS of 15.42 and a PE ratio of 23.15, position the company favorably among its peers.
Objectives of the IPO
The proceeds from the IPO will be utilized as follows:
- Working Capital Requirements: Rs 21.70 crore will be allocated to meet working capital needs, enhancing operational efficiency and revenue growth.
- Capital Expenditure: Rs 90 crore will be invested in acquiring advanced equipment, such as TSE and CNC machines, to bolster its power transmission and infrastructure projects.
- General Corporate Purposes: The remaining funds will be used for corporate expenses, including marketing and setting up new ventures.
These strategic investments aim to strengthen the company’s competitive edge and operational efficiency.
Strengths and Opportunities
Strengths:
- Robust Financial Growth: Consistent revenue and profit growth highlight the company’s resilience and potential for sustained performance.
- Global Presence: Operating in 58 countries, the company has a diversified revenue base and exposure to international markets.
- Strategic Manufacturing Facilities: State-of-the-art facilities ensure quality compliance and meet global standards.
- Strong Order Book: A significant portion of the revenue is secured through government tenders and international clients.
Opportunities:
- Expanding Infrastructure Projects: Increasing investments in power transmission and infrastructure projects provide ample growth opportunities.
- Technological Advancements: Upgrading to modern machinery and techniques could enhance efficiency and product offerings.
- Market Demand: Growing energy and infrastructure demands in developing countries open new revenue streams.
Challenges and Risks
Despite its strengths, Transrail Lighting Limited faces several challenges:
- Dependence on Government Tenders: About 70% of the revenue comes from government contracts, making the company vulnerable to policy changes and contract cancellations.
- Foreign Exchange Risks: Revenue from international clients exposes the company to currency fluctuation risks.
- Cost Overruns: Unanticipated expenses in EPC projects can impact profitability and project timelines.
Peer Comparison
Transrail Lighting Limited operates in a competitive industry alongside prominent players such as KEC International Ltd., Skipper Ltd., and Kalpataru Projects International Ltd. Below is a comparison:
| Company | PE Ratio | EPS | ROE (%) | PAT (in cr.) | NAV (in cr.) |
| Transrail Lighting Limited | 22.05 | 19.59 | 21.68 | 2,332.05 | 86.79 |
| KEC International Ltd. | 91.95 | 13.49 | 8.50 | 3,470.00 | 159.00 |
| Skipper Ltd. | 75.97 | 7.66 | 9.10 | 820.00 | 84.00 |
| Kalpataru Projects Intl. Ltd. | 36.72 | 31.76 | 10.00 | 5,160.00 | 316.00 |
Subscription and Listing Details
As of December 23, 2024, the grey market premium (GMP) for Transrail Lighting IPO stands at Rs 182, indicating a potential listing price of Rs 614 per share. This suggests an estimated gain of 42.13% for investors. Subscription data and GMP trends should be monitored closely for updated insights.
Steps to Apply and Check Allotment Status
Applying for the IPO:
- Check IPO Details: Review the issue size, price band, lot size, and subscription status.
- Log in to Trading Account: Navigate to the IPO section and select Transrail Lighting IPO.
- Submit Application: Approve the UPI mandate to confirm your application.
Checking Allotment Status:
- Through BSE: Visit BSE Website, select equity, choose the IPO, and submit details.
- Through Registrar Portal: Visit Link Intime Website, select the IPO, and enter your details.
Final Thoughts
Transrail Lighting Limited IPO presents an attractive investment opportunity due to its strong financial performance, global presence, and strategic objectives. However, potential investors should consider risks such as dependence on government contracts and exposure to currency fluctuations. Comprehensive research and strategic investment planning are crucial to maximizing returns from this IPO.
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