Transrail Lighting IPO: Review
Reliance Securities: Subscribe
Reliance Securities in its note said that 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.
“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.
SBI Securities: Subscribe for long-term
The brokerage has issued a a ‘subscribe for long term’ rating to the IPO, citing the company is valued at FY24 P/E and EV/EBITDA multiples of 24.9 times and 12.1 times, respectively.
Transrail Lighting has a proven financial track record. The company’s unexecuted order book of ₹10,213 crore as of June 2024 is 2.5 times of FY24 revenues which provides healthy revenue visibility for medium term, it said.
Anand Rathi: Subscribe
The brokerage said that the company is well-positioned to supply T&D products and efficiently manage multiple projects across various countries. “We believe that the issue is fairly priced and recommend ‘Subscribe – Long Term’ rating to the IPO,” it said.
Canara Bank Securities: 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 said with a ‘subscribe’ rating for the issue.
Transrail Lighting IPO: GMP today
The company’s shares are commanding a grey market premium of ₹145 today, suggesting a potential listing premium of 33.56% over the issue price.
However, it is important to note that grey market premiums are just an indicator of how the company’s shares are stacked up in the unlisted market and are subject to change rapidly.
Transrail Lighting IPO: Anchor investors
Transrail Lighting has mobilised ₹246 crore from anchor investors including ICICI Prudential Mutual Fund and Tata Mutual Fund. Apart from these, Winro Commercial (India) Ltd, Bengal Finance and Investments, SBI General Insurance Company and LIC Mutual Fund are the top anchor investors.
Transrail Lighting IPO details
The IPO of Transrail Lighting includes a fresh share sale of ₹400 crore and an offer-for-sale (OFS) of up to 1,01,60,000 equity shares by its promoter Ajanma Holdings, amounting to ₹438.91 crore.
At present, Ajanma Holdings holds 83.22 per cent stake in the Mumbai-based company.
At the upper end of the price band, the IPO size has been pegged at ₹839 crore and a market capitalisation of nearly ₹5,600 crore.
Half of the issue has been reserved for qualified institutional buyers, 35% for retail investors and the remaining 15% for non-institutional investors.
The net proceeds from the issue will be utilised towards financing working capital requirements; funding capital expenditure; and general corporate purposes.
Transrail Lighting is one of the leading Indian Engineering, Procurement and Construction (EPC) companies with a primary focus on the power transmission and distribution business and integrated manufacturing facilities for lattice structures, conductors, and monopoles.
It has a footprint in more than 58 countries.
As of June 30, 2024, the order book stood at ₹10,213 crore. Of this, 64% comprises international orders (High margin), while the remaining 36% are domestic orders. The order book to sales ratio for FY24 is 2.5x, ensuring healthy revenue visibility over the medium term.
Inga Ventures, Axis Capital, HDFC Bank and IDBI Capital Markets & Securities are the book running lead managers to the issue, while Link Intime India Private Ltd is the registrar for the issue.
The allotment for the Transrail Lighting IPO is expected to be finalised on December 24, while the company’s shares will list on BSE, NSE with tentative listing date fixed as December 27.
