Vikram Solar Eyes ₹1,500 Crore IPO with DRHP Filing to SEBI

Vikram Solar Limited, a leader in green energy sector and participant in the solar photovoltaic (PV) module manufacturing industry, has lately filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to elevate and raise  ₹1,500 crore through an Initial Public Offering (IPO). This strategic movement event is geared toward expanding its production capabilities and strengthening its market presence in the renewable power sector.

Vikram Solar IPO Structure and Purpose

This upcoming Vikram solar IPO includes in its prospectus a fresh issue of stocks amounting to ₹1,500 crore with an offer for sale (OFS) of as much as 17.45 million equity shares which approach the promoter institution. The face value of each equity share is ₹10. The IPO also includes a reservation for eligible employees, with a reduction for the ones taking part within the employee subscription portion.

The funds raised from the IPO are mainly aimed toward:

1. Bolstering Vikram Solar’s production capabilities. Of the proceeds, ₹793.36 crore will be allotted to set up a 3,000 MW solar mobile and module manufacturing facility through its subsidiary, VSL Green Power Private Limited. 

   
   

2. Another ₹602.95 crore might be used to enhance the capability of its current solar module facility from 3,000 MW to 6,000 MW, a major shift important for meeting the growing demand for solar energy electricity throughout India and globally.

The book-running lead managers for Vikram Solar's IPO encompass JM Financial, Nuvama Wealth Management, and different outstanding other financial institutes and establishments. These managers will play an important position in the IPO procedure, making sure the prime efficient allocation and pricing of shares. Link Intime India Private Limited has been appointed as the registrar for the IPO.

Financial Performance and Growth

Vikram Solar has shown strategic, impressive financial growth in its DRHP. The company's revenue accelerated by 21.11% year-on-year (y-o-y) to ₹2,510 crore in FY24 and at the same side of the growth trajectory, its profit after tax surged by 450% in the same time period of the year.  This increase is attributed to the decline in raw material expenses and strategic decisions and moves inclusive of ceasing fixed-price EPC contracts, which previously exposed the business enterprise to volatility in raw material costs. 

As of October 10, 2024, Vikram Solar Unlisted share priceis ₹460 per share and the face value is ₹10 per share.

Growth and Market Position

The current manufacturing capacity of 3.50 GW with Vikram Solar plans to make this bigger expansion and impact to 10.50 GW in FY26 and 15.50 GW by the end of FY27, inclusive of a new 3 GW solar cellular manufacturing plant in Tamil Nadu.

The Viram solar company's strong order book, standing at 8,214.63  MW as of the DRHP filing prospectus, displays robust market demand and its ability to steady widespread contracts, consisting of a 397.70 MW venture from NTPC Renewable Energy and a 1 GW order from a JSW Energy subsidiary.

Strategic Initiatives and Market Demand

Vikram Solar's strategic projects are focused on enhancing its manufacturing and production capabilities and meeting the developing demand for solar energy solutions. The business enterprise's presence spans 23 states and three union territories, running via a community of distributors, dealers, and system integrators. This extensive network guarantees that Vikram Solar can effectively cater to the diverse requirements of its customers across India.

Vikram Solar’s expansion plan is aligned with the Indian government’s concentration on reaching renewable electricity targets, in particular as solar energy maintains to play an essential role in India's energy segment mix. Notably, Vikram Solar has been identified as a Tier 1 PV module manufacturer by Bloomberg New Energy Finance (BNEF) in 2014, which underscores its recognition for delivering reliable and awesome high-quality solar products. 

How Vikram Solar position itself in Competitive landscape

Vikram Solar operates in an enormously competitive sector-specific segment in green energy and has maintained a sturdy foothold, both in India and across the world. The company presently exports PV modules to 39 countries and has mounted a presence in 23 Indian states and three union territories. Its clients range from public sector utilities together with NTPC to most important private organizations like Neyveli Lignite Corporation.

Additionally, Vikram Solar’s presence and engagement in Engineering, Procurement, and Construction (EPC) projects has helped it execute or initiate over 275 initiatives with a total capacity of 1.03 GW as of March 2024. This combination of manufacturing and project development initiatives offers the organization a competitive edge in a market that is expected to witness huge increase over the subsequent decade.

Despite strong opposition from different solar corporations like Waaree Energies, which is likewise planning an IPO, Vikram Solar’s as well maintained its position in the marketplace and proven track record giving it a distinct benefit. The company's focus on sustainability initiatives and its listing at the Ministry of New and Renewable Energy’s Approved List of Module Manufacturers (ALMM) in addition make its credibility inside the solar sector.

Peers Comparison Based on EPS as on 31st March, 2024 

​

Conclusion

Vikram Solar's upcoming IPO represents a strategic move to stabilize and secure the capital requirements for its ambitious growth plans. Given its solid order book value, impressive financial results, and significant emphasis on enhancing its manufacturing capacities, the company is well-positioned to capitalize on the increasing demand for solar energy both in India and overseas. The money raised from the IPO will allow Vikram Solar to increase production capacity, improve efficiency, and further its goal of becoming a top player in global solar technology.

For investors, this vikram solar emerging IPO might offer a lucrative opportunity to be part of India's growing renewable energy sector. Along with robust government support and assistance and an expanding marketplace for green and clean energy, Vikram Solar's future investment looks promising.