Employee - Transrail Lighting IPO

Transrail Lighting IPO Details

Transrail Lighting IPO Date

Transrail Lighting IPO will open for subscription on December 19, 2024, and close on December 23, 2024. On December 24, 2024, investors will be updated about the allotment status. 

Investors who have been allotted the company’s shares can expect them to be credited into their demat accounts on December 26, 2024. The shares will be listed on the NSE and the BSE on December 27, 2024. 

Transrail Lighting IPO Price Band

The IPO combines a fresh issue and an offer-for-sale (OFS) component. The Transrail Lighting IPO price band has been set between ₹410 to ₹432 per share. Interested investors can choose a price within this band to apply for the IPO. 

The IPO is a book-building issue of ₹838.91 crore, with a fresh issue of 0.93 crore shares (amounting to ₹400 crore) and an offer-for-sale component of over 1.01 crore shares (totalling ₹438.91 crore). 

The Transrail Lighting IPO listing price will be determined on December 27, 2024. The listing price is the price at which a company’s shares debut on the stock exchanges.

Transrail Lighting IPO Lot Size

Transrail Lighting IPO details have been declared. The minimum lot size for an application is 34 shares, and the investor would have to apply for a minimum of 1 lot. Meanwhile, the IPO issue size is approximately ₹838.91 crore.

Transrail Lighting IPO Objective

The company will use ₹250 crore from the net IPO proceeds to fund incremental working capital requirements and ₹90.7 crore for capital expenditures. The rest will be utilised for general corporate purposes.

The net proceeds from the offer-for-sale component will be received by the promoter selling shareholders, and the company will not receive any proceeds from this. Additionally, the company expects to benefit from listing on the stock exchanges as it will enhance its visibility and brand image. 

About Transrail Lighting 

Incorporated in 2008, Transrail Lighting is an Indian engineering, procurement, and construction (EPC) company that focuses primarily on the power transmission and distribution (T&D) sector. 

The company has a footprint in 58 countries, including markets such as Bangladesh, Kenya, Nigeria and Finland. As of June 30, 2024, it has completed 34,654 circuit kilometres (CKM) of transmission lines and 30,000 CKM of distribution lines. Meanwhile, the unexecuted order book of the company stood at ₹10,100 crore in FY24, which is nearly double compared to ₹5,907 crore order book in FY22. International orders make up 64.47% of the total order book. 

Transrail Lighting has over four decades of experience and has successfully completed more than 200 projects globally, particularly in Asia and Africa. In the international market, the company mainly focuses on projects that are funded by multilateral funding agencies like the World Bank and ADB, which reduces the risk of payment defaults. 

In addition to EPC projects, the company operates in other segments, such as civil construction, poles and lighting, and railway services, providing solutions for earthwork, track linking, overhead electrification, and signalling. The company has four manufacturing facilities in India, one each in Maharashtra and Gujarat and two facilities in Silvassa. 

Between FY21 and FY24, the company's revenue from operations rose at a CAGR of over 20.67%, while net profit rose 53.33% during the same period. In FY24, the domestic market contributed 51.06% to overall revenue, while the rest came from international business.  

The power transmission sector in India is growing consistently, with a projected investment worth ₹3 trillion in the transmission sector and up to ₹4 trillion in the distribution segment between 2025 to 2029. Meanwhile, in the international markets, the lack of electricity access in Africa and the need to modernise infrastructure in Latin America presents significant order-win opportunities for Transrail Lighting Limited. 

Now, Transrail Lighting Limited is launching its initial public offer (IPO). The total IPO issue size is ₹838.91 crore, comprising a fresh issue and an offer-for-sale component. Its shares will be listed on the NSE and BSE.

Company Name:  Transrail Lighting Limited

Company Established On: February 18, 2008

Company Type: Private Limited Company

CEO/MD:  Randeep Narang    

 Financial snapshot

Transrail Lighting IPO Analysis

Strengths and Opportunities

1. The company has over 200 successfully completed projects, which showcase its extensive implementation skills in power transmission and distribution (T&D) across India and international markets.
2. Its expertise in manpower, material supply, and world-class machinery enables efficiency in executing its projects.
3. The company has in-house tower testing that validates over 486 towers across various configurations, including self-support towers, monopoles and telecom masts.
4. It has state-of-the-art facilities in Gujarat, Maharashtra, and Silvassa, where it produces galvanised steel towers, conductors, and poles. 
5. It has a strong balance of international and domestic orders, with leading projects secured in Bangladesh, Cameroon and Tanzania.
6. The company has 114 experienced designers and engineers who use leading software tools like PLS Tower, Staad Pro, and AutoCAD. 
7. Its promoters and senior management bring over 40 years of expertise in EPC. 
8. The EBITDA margin as of June 30, 2024, was 13.12% and for FY2024, 2023, and 2022, it stood at 11.71%, 9.32%, and 8.75%, respectively. 
9. The company’s export projects are supported by multilateral funding agencies such as the World Bank and the ADB to ensure financial risk mitigation.
10. It uses advanced tools like LiDAR, AGI 32, and SolidWorks, which helps the company ensure the delivery of high-quality projects with precision and efficiency.

Risks and Threats

1. The company's order book is subject to cancellation, modification or delay, which may impact its financial condition and reputation.
2. Due to delays, cancellations, or changes in project timelines and costs, its actual revenues may vary from those in the order book.
3. Long execution periods for EPC contracts can result in excess costs or fluctuations in revenue due to various uncertainties.
4. The company relies heavily on government tenders. Delays or a lack of tenders can significantly impact its revenue and operations. 
5. The company also operates in international markets and faces risks from currency fluctuations and geopolitical uncertainties. 
6. Actions against its former parent company, Gammon India Limited (GIL), could adversely impact its reputation and business.
7. The company has significant capital expenditure and working capital requirements, which can require additional financing.
8. The company received show cause notice from RBI for past FEMA non-compliance. If outstanding dues are paid, this can lead to adverse actions. 
9. Disruption or shutdown of manufacturing facilities can majorly impact the company’s operations, cash flows and financial condition.

How to apply for the Transrail Lighting IPO?

If you are interested to invest in Transrail Lighting IPO, following are the steps to apply:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Transrail Lighting IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

You can also pre-apply for the Transrail Lighting IPO on Upstox which usually begins a day before the IPO opens for subscription.