Quality Power shares close 9% lower on debut, market weakness weighs

Quality Power Electrical Equipments

Quality Power Electrical Equipments disappointed investors with its subdued debut on the bourses on February 24, falling nearly 9 percent following weakness in the market. The benchmark indices Nifty 50 and BSE Sensex corrected more than 1 percent.

The stock opened higher at Rs 430 on the National Stock Exchange, up 1.2 percent over the issue price of Rs 425 but immediately caught in bear trap and remained under pressure throughout session. It hit an intraday low of Rs 382.50 in late trade, before closing 8.73 percent down at Rs 387.9 with volume of 1.1 crore equity shares.

On the BSE, the stock plunged 8.93 percent to Rs 387.05 with volume of 4.78 lakh shares.

Quality Power Electrical Equipments ended the first session with a market capitalisation of Rs 2,965.33 crore.

The company that provides high-voltage electrical equipment and solutions for grid connectivity and energy transition raised Rs 858.7 crore via initial share sale of 2.02 crore shares at a price of Rs 425 per share. The public issue saw a muted response from investors, subscribed 1.29 times during February 14-18.

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The IPO was a mix of fresh issuance of equity shares worth Rs 225 crore, and an offer-for-sale of 1.49 crore shares worth Rs 633.7 crore. The price band for the offer was Rs 401-425 per share.

Quality Power is set to utilise fresh issue proceeds for the acquisition of Mehru Electrical and Mechanical Engineers, purchase of plant and machinery, and inorganic growth. The offer-for-sale funds were received by promoter Chitra Pandyan.