HBL Power: Signs of change

RailTel w/Quadrant Future Tek

RailTel Corporation of India Limited signed a memorandum of understanding (MoU) with Quadrant Future Tek Limited for works related to KAVACH installation on May 1, 2024.

In the process of understanding the new entrants, I discovered that Quadrant Future Tek Limited has a DHRP on their website. They are in the works to list on the exchanges. Their DRHP is dated June 2, 2024. I have concentrated only on Kavach related notes in their DHRP.

About the company: Quadrant Future Tek Limited

• The manufacturing operations of the Company are based in Basma, Mohali and Railway Signalling & Embedded System Design centre at Bengaluru, Karnataka and Hyderabad, Telangana.
  • Bengaluru & Hyderabad – consists of 24 employees in the Railway Signalling & Embedded System Design centre, which is approximately 9.02% of our total employees.
  • Mohali – our manufacturing facility, situated in Basma, Mohali, Punjab, with a dedicated Production floor area of approximately 60,000 sq. ft.
• Quadrant is a research-oriented company, engaged in developing new generation Train Control and Signalling Systems that offers the highest level of safety and reliability to rail passengers and also possess an irradiated / E- beam cable manufacturing facility with Electron Beam Irradiation Centre.
• The Company offers speciality cables for Railways rolling stock and Naval (Defence) industry.
• Our facility also possess end to end infrastructure capabilities for production of Solar & EV Cables.
• We believe that our competitive advantage is our technology and innovation-driven approach, our efficiency in operations, maintaining quality control, experienced domain professionals and R&D structure enabling indigenously developed solutions.
• Our Company caters to two different industries, namely:
  • (i) Cable industry with niche technology for manufacture of E-beam cables which are primarily used in various industries requiring stringent norms, including Railways, Defence, Renewable Energy & Electric Vehicle sectors and growing applications across industries; and
  • (ii) Railways sector for Automatic train protection (ATP) and KAVACH system and growing demand in related technologies and development of new systems to enable safety and capacity augmentation in railways.
• The IPO proceeds are for:
  • 175 cr = funding working capital
  • 25 cr = capes for development of electronic interlocking system
  • 25 cr = working cap loan repayment/prepayment.

• Entered into an exclusive Memorandum of Understanding with RailTel for delivering the specific targeted opportunities related to KAVACH in Indian Railways and other Countries Railways.
• Unique technology for the manufacture of cables that meets the stringent requirements for multiple industries, namely Railways, Naval Defence, Renewable Energy & Electric Vehicle sectors.
• For enhancing the safety standards and faster movement, Indian Railways is developing and creating technology in areas such as signalling and telecommunication with 15,000 kms being converted into automatic signalling and 37,000 kms to be fitted with ‘Kavach’, the domestically developed Train Collision Avoidance System (CareEdge Report).
• The Indian train control system market size was estimated to be valued at USD 208 million in CY23, which is further expected to reach USD 208 million in CY24. For the forecast period CY24-CY30, the market anticipated to grow at a notable CAGR of 12.6%. (CareEdge Report). Once implemented, KAVACH will be the world’s cheapest automatic train collision protection system, costing approx. ₹ 5.00 million per kilometre to operate compared to about ₹ 20.00 million per kilometre worldwide.
• We have vertically integrated manufacturing operations for the hardware and software required for Train Control and Signalling Division which allow us to manage manufacturing processes in-house, from design and development to manufacturing and delivery.
• The train control and signalling division primarily consists of 3 parts:
  • Train Collision Avoidance System,
  • Electronic Interlocking System and
  • Multi Section Digital Axle Counter.
    Presently our Company has developed solution for Train Collision Avoidance System.
• Based on our registration to develop indigenized KAVACH (Indian Railway ATP) and successful Type testing, we have been accorded proto-type approval by Indian Railways / RDSO and further technical clearance for deployment of our systems at 5 railway stations, 10 trains / locomotives and 5 units of Remote Interface Unit besides the track on a stretch of 43.6 km at “Moula-Ali (Excluding) – Raghunathapalli section of South Central Railway – Reach 2” covering 5 stations and 10 train sets. The said order is for an aggregate value of ₹ 168.60 million. [16.8 cr]
• Initial Order: Based on our registration to develop indigenized KAVACH (Indian Railway ATP) and successful Type testing, we have been accorded prototype approval by Indian Railways / RDSO and further technical clearance for deployment of our systems at:
  • 5 railway stations,
  • 10 trains / locomotives and
  • 5 units of Remote Interface Unit besides the track on a stretch of 43.6 km at “Moula-Ali (Excluding) – Raghunathapalli section of South-Central Railway – Reach 2” covering 5 stations and 10 train sets.
  • The said order is for an aggregate value of ₹ 168.60 million.
• For the said deployment of Kavach equipment, our Company has nearly completed the entire civil work required and is in the process of deploying stationary, RIU and onboard Kavach systems. Upon successful completion of the project execution, warrant period shall be 2 years and thereafter AMC period shall be 1 year separately for onboard and trackside systems.
• Our Company is inter-alia responsible for technology maintenance and upgradation as per the specifications of RDSO for entire life cycle of the project, meet RDSO specifications to be eligible for participation in upcoming tenders of KAVACH on Indian Railways, provide technical expertise for the project execution along with provision of expert manpower and required technology solutions and to participate in KAVACH tenders of Indian Railways or other countries jointly with RailTel.
  • For the present implementation of our Train Collision Avoidance System, we have only one customer, i.e. Indian Railways.

• On May 01, 2024, our Company has entered into a Memorandum of Understanding with RailTel Corporation of India Limited (“RailTel”), a Government of India undertaking, to define a framework of inter-se co-operation to (i) establish high level understanding of intended opportunities to pursue within the said MoU, (ii) KAVACH as a means of Automatic Train Protection System for Railways in India and abroad, and (iii) to re-align and broaden the above targeted scope as per the opportunities within other countries and their Railway System. This Memorandum of Understanding shall remain in force unless terminated by either of the parties in accordance with terms hereof. RailTel shall lead engagement and discussion with key stakeholders within Indian Railways and other Country’s Railways and to participate, market and implement KAVACH technology jointly with Quadrant in Indian Railways and in other countries.
  • This MoU shall remain in force unless terminated by either of the parties.
  • RailTel shall lead engagement and discussion with key stakeholders within Indian Railways and other Country’s Railways and to participate, market and implement KAVACH technology jointly with Quadrant in Indian Railways and in other countries
• For implementation of a TCAS system, 4 systems are separately installed, comprising of:
  1. on-track equipment (e.g. RFID tags),
  2. track side equipment (e.g. railway towers),
  3. indoor equipment (e.g. station TCAS, relay, etc) and
  4. on-board equipment (i.e. Loco TCAS, Driver Machine Interface, etc).
     Kavach is the first system in India which has bought all these four systems together.