Transrail Lighting IPO Listing: Stock lists at 37% premium on BSE and NSE

Transrail Lighting IPO Listing

Transrail Lighting IPO Listing: ₹432 Share Entered at ₹590, Then Faced Pressure from Profit Booking

Overview of Transrail Lighting IPO Listing Performance: Transrail Lighting, an engineering and construction company primarily involved in power transmission and distribution (T&D), made a strong debut on the Indian stock markets today.

The company had launched its ₹838.91 crore Initial Public Offering (IPO) between December 19 and December 23, 2024, and the shares were listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) today.

Despite a strong opening, the stock faced some pressure due to profit booking in the early hours of trading.

The Transrail Lighting IPO offered shares at ₹432 each, and the response from investors was overwhelmingly positive.

On the listing day, the shares opened at ₹585.15 on BSE and ₹590.00 on NSE, marking a solid 36% gain for IPO investors from the issue price of ₹432.

However, after this strong opening, the shares witnessed a correction. The stock price fell to ₹544.30 on BSE, driven by profit-booking activities.

By the end of the first trading day, Transrail Lighting’s stock had partially recovered, closing at ₹553.30, reflecting a healthy 28.08% profit for those who invested in the IPO at the issue price.

IPO Subscription and Investor Response

The Transrail Lighting IPO was met with tremendous enthusiasm from the investment community, which was reflected in the subscription numbers.

The IPO was subscribed a remarkable 81.98 times, signaling strong investor confidence in the company’s future growth prospects. This oversubscription was spread across different categories of investors.

The Qualified Institutional Buyers (QIBs), a category that typically includes large institutional investors such as mutual funds, insurance companies, and foreign investors, exhibited a particularly strong appetite for the shares.

The QIB portion of the IPO was subscribed an impressive 197.41 times. This high level of demand indicated that large institutional investors have significant confidence in Transrail Lighting’s business model and financial growth trajectory.

The Non-Institutional Investors (NIIs), who typically include high-net-worth individuals (HNIs), also showed robust demand, with their portion being subscribed 78.31 times.

Retail investors, the backbone of many IPOs, contributed significantly as well, with their segment being oversubscribed 22.62 times.

Even the employee portion, which is reserved for Transrail Lighting’s staff, was oversubscribed by 4.39 times.

The overall strong response to the IPO highlighted the market’s optimism about Transrail Lighting’s future and its positioning in the growing power transmission and distribution industry.

Structure of the IPO: New Share Issuance and Offer for Sale (OFS)

The Transrail Lighting IPO had two primary components: the issuance of new shares and the Offer for Sale (OFS) by existing shareholders. Under the IPO, Transrail Lighting issued new shares worth ₹400 crore.

These proceeds will primarily be used for financing the company’s increased working capital requirements, capital expenditure needs, and general corporate purposes. The company has identified these areas as crucial for supporting its growth and scaling operations.

In addition to the new shares, the IPO included an OFS of 1,01,60,000 shares with a face value of ₹2, which were sold by the company’s existing shareholders.

The money from the OFS will not be received by Transrail Lighting but will go directly to the selling shareholders.

The use of the funds raised through the new shares will play a pivotal role in the company’s strategic plans to expand its capacity and capitalize on emerging opportunities in both the domestic and international markets.

As the company continues to win contracts and scale operations, the raised capital will provide the necessary financial backing for its ambitious growth plans.

About Transrail Lighting: A Leading Player in Power Transmission

Founded in February 2008, Transrail Lighting has emerged as a significant player in the engineering and construction sector, particularly in power transmission and distribution infrastructure.

The company manufactures critical components such as lattice structures, conductors, and monopoles, all of which are essential for constructing power transmission lines and substations.

Transrail Lighting’s business is spread across 58 countries, including emerging markets in Bangladesh, Kenya, Finland, Poland, and Nicaragua.

The company’s international presence is a testament to its ability to compete on the global stage and meet the growing demand for infrastructure development in power transmission.

The company has successfully completed over 200 power transmission and distribution projects globally.

These projects include the installation of transmission lines and substations, ensuring that energy reaches far-flung and underserved areas.

Transrail Lighting’s extensive experience in the T&D sector has enabled it to build a robust portfolio, and its reputation for timely execution and technical expertise has made it a preferred partner for large-scale infrastructure projects.

Transrail Lighting operates four manufacturing facilities located in India: one in Vadodara (Gujarat), one in Deoli (Maharashtra), and two in Silvassa (Dadra and Nagar Haveli).

These units are equipped with state-of-the-art machinery to produce high-quality T&D equipment, ensuring that the company remains competitive in an industry that requires precision and reliability.

Financial Performance and Growth Trajectory

Transrail Lighting has experienced remarkable growth in recent years, both in terms of revenue and profitability. In FY 2022, the company reported a net profit of ₹64.71 crore.

This figure grew significantly in FY 2023, reaching ₹107.57 crore, and is projected to further accelerate in FY 2024, with a net profit of ₹233.21 crore.

Over this period, Transrail Lighting’s revenue has grown at a compound annual growth rate (CAGR) of more than 32%, reaching ₹4,130 crore in FY 2024.

The company’s financial performance is a reflection of its solid execution capabilities, increasing market share, and expansion into new regions.

With increasing demand for electricity in both developed and developing countries, the need for power transmission infrastructure is expected to grow, providing Transrail Lighting with substantial opportunities for continued growth.

For the first quarter of FY 2024-25 (April-June 2024), Transrail Lighting reported a net profit of ₹51.74 crore and revenue of ₹929.70 crore.

These figures indicate that the company is on track to maintain its growth momentum, which bodes well for its future performance, particularly as the infrastructure development sector continues to expand.

Final Remarks: A Promising Future for Transrail Lighting

Transrail Lighting’s IPO has successfully captured investor attention, with strong demand across all categories.

The solid listing gain on the first day, despite some initial profit booking, reflects investor confidence in the company’s growth potential.

The company’s robust financial performance, impressive track record in power transmission projects, and strategic use of IPO funds for business expansion position it well for future growth.

With the global push for infrastructure development and modernization, particularly in the energy sector, Transrail Lighting is poised to benefit from an expanding market for T&D infrastructure.

As the company continues to scale its operations and deliver on its growth strategy, its presence in both domestic and international markets should further strengthen.

Investors looking for exposure to the growing power transmission and distribution sector might find Transrail Lighting an attractive investment opportunity moving forward.