Vikram Solar Limited IPO

Headquartered in Kolkata, Vikram Solar started operation in 2009. Throughout its 12-year journey, the company expanded its business by supplying solar PV modules to 32 countries. Today, the total production of this company is 12MW of solar power. To further grow its business, Vikram Solar Limited has submitted its Draft Red Herring Prospectus to SEBI in March 2023. Recently SEBI approved their proposal and the company is taking steps to launch Vikram Solar Limited IPO soon. 

Here is a complete overview of Vikram Solar Limited’s DRHP that will help you plan your investment strategy. 

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About the Company

Vikram Solar is India’s largest module manufacturer of photovoltaic panels in terms of operation capacity and production of solar energy. In addition, it provides engineering, procurement and construction services with a combined experience of 1.42 GW across its portfolio. The company has been operating for the past 12 years and its head office is in Kolkata. 

During these 12 years, Vikram Solar has developed a business model with strong engineering capabilities to produce high-efficiency PV models. The company has also expanded its global presence by selling its PV products in 32 countries as of December 2021. The company also has a sales office in the United States and a procurement office in China.

Vikram Solar Limited commenced manufacturing in 2009 with an annual production rate of 12MW. By December 2021, its cumulative annual rated production grew to 2.5GW. This includes an aggregate of power generated across factories in Falta SEZ (West Bengal) and Oragudem (Tamil Nadu).  Factories in both these locations are situated strategically with access to ports, highways and railways. 

Vikram Solar Limited is currently working on its plan to upgrade the existing manufacturing plant in Falta. This shall help the facility to manufacture 3GW of solar electricity from its present 1.2GW production by the end of FY 2023.

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IPO Objectives

The leading producer of solar energy in India filed its DRHP for Vikram Solar Limited IPO in March 2023. Recently the company has received a nod from SEBI to go ahead with its plan to launch an IPO. According to its DRHP, the company’s IPO will consist of a fresh issue of equity shares worth up to Rs. 1500 crore and an Offer for Sale of 5 million equity shares. 

With the net proceeds the company shall earn from its upcoming IPO, Vikram Solar Limited is planning to install a new facility of 2GW in Tamil Nadu. The company shall use the remaining amount to fulfil other corporate requirements.

Vikram Solar Limited IPO Details

The promoter, Anil Chaudhary, will participate in the OFS offering 3,615,000 equity shares. The other shareholders taking part in the OFS include Pushpa Madhogaria selling 126,500 shares, Girish Kumar Madhogaria selling 258,500 shares and Vikram India Limited selling 1 million shares. The face value of each equity share is Rs. 10. 

Kotak Mahindra Capital Company and JM Financial are the book-running lead managers for this IPO. Link Intime India Private Limited is the registrar. 

Other information for this upcoming IPO is yet to be declared by the higher authorities of Vikram Solar Limited. These details include lot size, price band, and opening and closing dates of Vikram Solar Limited’s IPO. 

If you are an interested investor, consider keeping an eye out for this information so that you do not miss out on an opportunity to invest. 

Strengths

Here are some of the strengths of Vikram Solar Limited IPO that can make it a valuable investment:

• Vikram Solar Limited is India’s one of the largest Indian Solar Module manufacturers that hosts the capacity to produce 2,500 MW of electricity. This includes trial production of solar electricity which is not available for commercial purposes. 
• This company holds a strong brand recognition quality along with a well-established track record.
• The financial metrics of this company can prove its strong financial performance managed by a seasoned and professional management team with a remarkable track record. 
• The business and operations of Vikram Solar Limited are backed by macroeconomic factors with a favourable landscape.
• Vikram Solar Limited has a track record of being an early adopter of technology with globally recognised and acclaimed manufacturing facilities.

Risks Involved

Besides the above strengths, here are a few risks involved with the business of Vikram Solar Limited that you must consider before investing. 

• The outbreak of any communicable disease or any epidemic or situation like the COVID-19 pandemic might affect the business adversely. Such a scenario can bring a drop in the labour force and pose a hindrance in cash flow, results of operation and prospects. 
• The company’s success relies on the introduction of new manufacturing units and the addition of production lines. Maintaining a balance between this and cost-effective measures can be tricky.
• The company might be unable to benefit from various government schemes and policies like PLI.

Summary

The Indian solar module manufacturer, Vikram Solar Limited has received the green light from SEBI to float its IPO. The company intends to raise around Rs. 1,500 crore via a fresh issue to increase its production capacity. Through its OFS, the promoter and existing shareholders will sell 50 lakh equity shares.

Being the largest manufacturer of solar modules in India, the company is well-positioned to benefit from the net-zero carbon emission target set by the Indian Government. If you are interested, consider keeping an eye out for recent developments of this company.

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