Transrail Lighting IPO opens today, Dec 19; Should you bid or avoid?

Transrail Lighting IPO: In the OFS, promoter Ajanma Holdings Private Ltd will sell 10.1 million shares. At present, Ajanma Holdings holds an 83.22 per cent stake in the Mumbai-based company

Transrail Lighting IPO: The initial public offering (IPO) of Transrail Lighting opens for public subscription today, December 19, 2024. At the upper end of the price band, the company seeks to raise Rs Rs 838.91 crore through the offering, which comprises a fresh issue of 9.3 million shares aggregating to Rs 400 crore and an offer for sale of 10.1 million shares aggregating to Rs 438.91 crore. The company announced that it raised Rs 245.97 crore from anchor investors in the bidding concluded on December 18, 2024.

 

In the OFS, promoter Ajanma Holdings Private Ltd will sell 10.1 million shares. At present, Ajanma Holdings holds an 83.22 per cent stake in the Mumbai-based company.

 

 

The public offering is available at a price band of Rs 410 to Rs 432 per share, with a lot size of 34 shares. Accordingly, investors can bid for a minimum of 34 shares and in multiples thereafter. A retail investor needs a minimum of Rs 14,688 to bid for one lot comprising 34 shares. 

 

Meanwhile, Transrail Lighting commanded a strong premium in the grey market on Thursday. The company’s shares were quoted at Rs 577 apiece in the grey market, reflecting a premium of Rs 145 or 33.56 per cent over the upper price band of Rs 432, according to sources tracking unofficial market activities.

 

The public subscription window for Transrail Lighting IPO will close on Monday, December 23, 2024. Following the closure of the subscription window, the basis of the allotment of shares is expected to be finalised on Tuesday, December 24, 2024, with shares credited to investors' demat accounts by Wednesday, December 26, 2024.

 

Shares of Transrail Lighting will tentatively list on the BSE and NSE on Friday, December 27, 2024.

 

Link Intime India serves as the registrar for the IPO, while the book-running lead managers for the issue include INGA Ventures Pvt., Axis Capital Ltd., HDFC Bank Ltd., and IDBI Capital Market Services Ltd.

 

As per its Red Herring Prospectus (RHP), all proceeds will be used to fund incremental working capital requirements, to support capital expenditure, and for general corporate purposes.

Should you subscribe to the Transrail Lighting  IPO?

Anand Rathi - Subscribe

Analysts at Anand Rathi have given a 'Subscribe' rating for Transrail Lighting IPO for the long term as they believe the company is committed to expanding its conductor, pole, and international businesses. With a presence in 58 countries, it aims to further strengthen and broaden its global footprint in the future.

 

At the upper band, the brokerage values the company at 24.8x its FY24 EPS. Following the issuance of equity shares, the company's market capitalisation is estimated at Rs 5,799.86 crore, with a market cap-to-sales ratio of 1.4 based on its FY24 earnings.

 

The growing demand for power, coupled with government initiatives, has driven the need for transmission and distribution lines.

 

"The company is well-positioned to supply transmission & distribution (T&D) products and efficiently manage multiple projects across various countries," Anand Rathi said.

 

Deven Choksey- Subscribe

Deven Choksey has recommended to 'Subscribe' Transrail Lighting IPO. As per the brokerage, the company stands out with a robust order book of Rs 10,213 crore, 91 per cent of it is concentrated in the Transmission & Distribution (T&D) segment and provides strong revenue visibility in the near to medium-term

 

"The company’s extensive in-house manufacturing capabilities for towers, poles, and cables offer a competitive edge, ensuring better control over quality and costs. For FY24, the company delivered healthy earnings before interest, tax, depreciation, and amortisation (Ebitda) margin of 12 per cent and a Net Profit Margin (NPM) of 7 per cent, leading to strong return ratios, with return on equity (ROE) at 24 per cent," the report said.

 

About Transrail Lighting

Incorporated in February 2008, Transrail Lighting Limited is an engineering and construction company focused on power transmission and distribution and manufacturing lattice structures, conductors, and monopoles.