Domestic module producer Vikram Solar Ltd has filed preliminary documents with SEBI to raise money via an initial public offering (IPO) for Rs. 2000 crore. The IPO includes a new issue of up to Rs. 1,500 crore and an Offer-for-Sale (OFS) of up to 5,000,000 equity shares by the selling stockholders. The company may explore a pre-IPO placement worth Rs. 300 crore, which would reduce the size of the initial issuance.
Vikram Solar manufactures solar photovoltaic (PV) modules and is a provider of integrated solar energy solutions, including engineering, procurement, and construction (EPC) and operations and maintenance (O&M). As of December 31, 2021, the firm had a 19% market share and 2.5 GW of installed manufacturing capacity for solar PV modules. It also grew its global presence by opening a sales office in the United States of America and a procurement office in China, and it has provided solar PV modules to customers in 32
countries. The company has two facilities, one in Falta, Kolkata, with a current capacity of 1.2 GW, and expects to upgrade the manufacturing plant to 3 GW by fiscal 2023. The second plant is in Tamil Nadu, where a new 2GW facility is planned. Both of these plants are strategically positioned with easy access to ports, rail, and roadways, facilitating both domestic and international operations.
NTPC, Rays Power Infra, Amp Energy India, Azure Power India, West Bengal State Electricity Distribution Company Ltd, Solar Energy Corporation of India, West Bengal Power Development Corporation Ltd, Hindustan Petroleum Corporation Ltd, and Keventer Agro Ltd are among the company’s domestic customers. Amp Solar Development Inc (client since 2019), Safari Energy LLC, Standard Solar Inc, and Southern Current are among the company’s overseas customers.
Vikram Solar Ltd Financial Status
| Particulars | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue From Operation | 16,101.38 | 16,396.83 | 20.168.36 |
| EBITDA | 1945.02 | 1621.82 | 1828.16 |
| Contribution Margin | |||
| Profit After Tax (PAT) | 16,276.02 | 16,619.74 | 20,312.94 |
| EPS | 1.48 | 0.86 | 1.55 |
| ROE | 0.99% | 1.20% | 0.78% |
Objective of the Issue
The proceeds from the issue will be used for
- worth Rs.1,238.80 crore funding capital expenditure for setting up 2000 megawatts integrated solar cell and solar module manufacturing facility at Tamil Nadu through its wholly owned arm VSL Green Power Pvt Ltd
- general corporate purpose.
Vikram Solar Ltd IPO Key Points
Strengths
- One of the largest Indian solar PV module manufacturers with 2.5 GW (inclusive of trial production i.e. which is not yet commercially available) capacity having strong presence in domestic and international markets along with a large order book providing clear visibility on future growth
- Ability to provide EPC and O&M services as a supplemental value add to its solar PV module manufacturing business
- Business and operations are supported by macroeconomic factors and a favourable regulatory landscape
- An early adopter in technology with manufacturing facilities based on global best practices
Risks
- The success depends on its ability to build new manufacturing plants and add production lines in a cost-effective manner, both of which are subject to risks and uncertainties
- Unable to benefit from the government policies like PLI scheme and various other policies
- The company does not have long-term contracts with suppliers of solar PV cells and all other raw materials and therefore are susceptible to potential unavailability of raw materials
- It derives a significant amount of revenue from only one product
- Changes in the price of wafers, solar PV cells and other raw materials due to changes in demand or other factors
- Company, certain of its directors, some of whom are also promoters, and one of the corporate promoters are involved in certain legal proceedings
Vikram Solar Ltd IPO FAQs
Q1. What is the minimum lot size and investment required for the Vikram Solar IPO?
Ans. Vikram Solar IPO details are yet to be announced.
Q2. What is the price band of the IPO?
Ans. Vikram Solar IPO details are yet to be announced.
Q3. When does the Vikram Solar issue open and close?
Ans. Vikram Solar IPO details are yet to be announced.
Q4. What is the size of Vikram Solar IPO issue?
Ans. The IPO comprise of of a fresh issue of up to Rs.1,500 crore and an Offer-for-Sale (OFS) of up to 5,000,000 equity shares by the selling shareholders.
Q5. Who are the promoters/key personnels of Vikram Solar?
Ans. Vikram Solar is promoted by Hari Krishna Chaudhary, Gyanesh Chaudhary, Hari Krishna Chaudhary Family Trust, Gyanesh Chaudhary Family Trust, Vikram Financial Services Limited and Vikram Capital Management Private Limited (formerly, Monolink Trexim Private Limited).
Q6. What is the allotment date of Vikram Solar?
Ans. Vikram Solar IPO details are yet to be announced.
Q7. What is the Vikram Solar listing date?
Ans. Vikram Solar IPO details are yet to be announced.
Q8. Who are the book runners for Vikram Solar IPO?
Ans. JM Financial Limited and Kotak Mahindra Capital Company Ltd are the book running lead managers to the issue.
Q9. What is the objective of the issue?
Ans. The proceeds from the issue will be used for:
- worth Rs.1,238.80 crore funding capital expenditure for setting up 2000 megawatts integrated solar cell and solar module manufacturing facility at Tamil Nadu through its wholly owned arm VSL Green Power Pvt Ltd
- general corporate purpose
