Quality Power has acquired a 51% stake in Mehru Electrical and Mechanical Engineers for INR 120 crore. This is in line with the company’s IPO plans and will strengthen its capabilities in high-voltage instrument transformers, setting the stage for a global presence.
Quality Power-Mehru acquisition is done through a Share Purchase Agreement (SPA). Mehru has expertise in manufacturing oil-filled and dry-type instrument transformers for transmission grids up to 500kV. This will give Quality Power a competitive edge in supplying critical electrical infrastructure to power utilities, renewable energy sectors and automation industries.
Investors positively reacted to the deal as Quality Power’s stock surged 11% and touched an intraday high of INR 374.30 per share on stock exchanges. This is a clear vote of confidence in the company’s ability to extract synergies from Mehru and execute its long-term strategy.
Quality Power-Mehru: Technological Strength
Mehru was established in 1997. It manufactures high-quality Instrument Transformers up to 500KV, tested to international standards. With advanced labs and global clients such as ABB, GE, and Siemens, the company is operating in 53+ countries.
Mehru has a diverse product range :
- Current Transformers (CTs)
- Potential Transformers (PTs)
- Inductive Voltage Transformers (IVTs)
- Capacitor Voltage Transformers (CVTs)
- High Voltage Test Kits
- Precision Grade Test Benches
With this acquisition, Quality Power strengthens its high-voltage equipment manufacturing capabilities, especially in HVDC and Flexible AC Transmission Systems (FACTS) networks.
Financials & Expansion Plans
This was one of the key objectives of Quality Power’s recent IPO, where the company had allocated INR 117 crore for this transaction. The deal is done ahead of time, showcasing Quality Power’s commitment to its strategy.
The company has a strong balance sheet with free cash flow of INR 100 crore, debt of INR 25 crore and a pipeline of inorganic growth opportunities. Mehru’s financials are :
- FY24 Revenue: INR 250 crore
- FY24 PAT: INR 10.2 crore
- H1 FY25 Revenue: INR 112.2 crore
- H1 FY25 PAT: INR 4.9 crore
Future Projections & Valuation
With the latest acquisition of Mehru Electrical, the company’s growth will speed up. The projections are:
- FY25E: INR 382 crore | PAT: INR 83.5 crore
- FY26E: INR 605 crore | PAT: INR 134 crore
Analysts are estimating a fair value of INR 561 per share, which is a 32% upside from current levels. A 40x multiple on FY26E Operating PAT is meriting the company’s technological edge, global reach, and strategic positioning in the emerging nuclear energy and grid stability segments.
Management’s Vision
Commenting on the acquisition, Bharanidharan Pandyan, Joint Managing and Whole-time Director of Quality Power said:
“This was one of the primary objectives of our IPO, and I am delighted to say we have done it lightning fast. Mehru’s deep engineering expertise combined with our advanced manufacturing and global supply chain makes us a force to be reckoned with in the high voltage space.”
He added that Quality Power’s entry into the high-barrier-to-entry markets of FACTS, grid stability and renewable integration will cement our leadership in the multi-billion dollar power infrastructure space.
The Bigger Picture
Quality Power-Mehru acquisition is more than just a financial transaction—it solidifies Quality Power’s position as a technology-driven company. With a presence in over 100 countries, the company will ride the wave of grid modernization, power quality solutions and sustainable energy integration.
For investors, this means Quality Power is a long-term play on India’s power infrastructure story. While the IPO was met with guarded optimism, this acquisition will change the perception and attract new institutional interest.
Quality Power made its stock market debut on 24 February 2025; the issue was subscribed 1.2X. Quality Power was listed in a negative territory with an 8.73% loss. However, due to the ongoing bearish market, half of the IPO listed last year are trading below their allotment price. Quality Power plunges more than 20% from its allotment price. Currently, it is trading around INR 361.10 per share following the recovery, reflecting a 15% down from allotment price.
For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.