The Rs 838.91 crore-initial public offering (IPO) of Transrail Lighting shall open for bidding on Thursday, December 19. The company shall be offering its shares in the range of Rs 410-432 apiece. Investors can apply for a minimum of 34 equity shares and its multiples thereafter. Bidding for the offer shall close on Monday, December 23.
The IPO of Transrail Lighting includes a fresh share sale of Rs 400 crore and an offer-for-sale (OFS) of up to 1,01,60,000 equity shares by its promoter Ajanma Holdings, amounting to Rs 438.91 crore. The net proceeds from the issue shall be utilized towards financing working capital requirements; funding capital expenditure; and general corporate purposes.
Incorporated in 2008, Mumbai-based Transrail Lighting is an engineering and construction company focused on power transmission and distribution and manufacturing lattice structures, conductors, and monopoles. Transrail Lighting raised Rs 245.97 crore from anchor investors by allocating 56,93,832 equity shares at Rs 432 apiece.
Transrail Lighting has a presence in 58 countries, including Bangladesh, Kenya, Tanzania, Niger, Nigeria, Mali, Cameroon, Finland, Poland, and Nicaragua, with turnkey EPCs and supply projects. The company has completed the EPC of 34,654 CKM of transmission lines and 30,000 CKM of distribution lines, both domestically and internationally as of June 30, 2024.
Transrail Lighting reported a net profit of Rs 51.74 crore with a revenue of Rs 929.70 crore for the three-months ended on June 30, 2024. Transrail Lighting has reserved 50 per cent of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will have 15 per cent reservation. Retail investors will have 35 per cent of the allocation in the IPO.
Inga Ventures, Axis Capital, HDFC Bank, IDBI Capital Market Services are the book running lead managers of the Transrail Lighting IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed at both BSE and NSE on December 27, Friday. Here's what a host of brokerage firms said about the IPOs of Transrail Lighting:
Reliance Securities Rating: Subscribe Transrail Lighting has a track record of four decades in providing a comprehensive solution on a turnkey basis in power transmission and distribution market with key outperformance projects and a strong track record completing more than 200 projects, said Reliance Securities.
"With a healthy orderbook of international and domestic clients, experienced promoters with strong management team and consistent financial performance, the growth momentum would continue in the coming years. Hence, we recommend a subscribe rating to the issue," it said.
Choice Broking Rating: Subscribe Transrail Lighting is one of the leading Indian EPC companies, ranked 4th in the power transmission and distribution sector for FY24. Their expertise includes integrated manufacturing of lattice structures, conductors, and monopoles, said Choice Broking in the IPO note.
"With its growing presence, the company has increased its top line and bottom line. We believe TLL has a strong growth potential, supported by government initiatives and the overall positive outlook for the industry. Thus, we recommend a 'subscribe' rating for this issue," it said.
SBI Securities Rating: Subscribe for long-term Transrail Lighting is valued at FY24 P/E and EV/EBITDA multiples of 24.9 times and 12.1 times, respectively. It has a proven financial track record. The company’s unexecuted order book of Rs 10,213 crore as of June 2024 is 2.5 times of FY24 revenues which provides healthy revenue visibility for medium term, said SBI Securities with a 'subscribe for long term' rating.
SMIFS Rating: Subscribe We recommend subscribe to the issue as Transrail's strategic initiative including expanding its product and service portfolio, strengthening its substation and underground cabling businesses, and capitalizing on the international market, especially in regions with growing energy infrastructure needs will drive future earnings growth, said SMIFS.
Canara Bank Securities Rating: Subscribe Transrail Lighting is fairly valued with, which is lower than the industry peers. The company demonstrates superior financial metrics, said Canara Bank Securities. "The company’s strategic focus on innovation, capacity expansion, and global diversification positions it well for long-term sustainable growth," it added with a 'subscribe' rating for the IPO.
StoxBox Rating: Subscribe for long-term The substantial investments in the power T&D sector will provide Transrail Lighting with ample opportunities to expand its market presence, secure new projects, and achieve economies of scale, said StoxBox. Given its strong position in the market, the company is poised to capitalize on emerging market opportunities," it said with a 'subscribe for long-term' rating for the IPO.
InCred Equities Rating: Subscribe Transrail fared well versus its close peers on margin and return ratios. Transrail has a book-to-bill ratio of 2.5 times, higher than its peers. Transrail has a strong order book of Rs 10,200 crore & healthy order pipeline, said InCred Equities. "We recommend subscribing , given the opportunities in power business, healthy order book, higher return ratios compared to peers and reasonable valuation." it said.