Rays Power Infra Limited IPO Details

Several new companies are planning to go public beginning in 2024. The latest among these is the Mumbai-based Rays Power Infra Limited. Rays Power Infra Limited is a leading manufacturer of solar power in India with more than 1207 MW of installed power capacity. The company is involved in turnkey solar power projects and handles everything from engineering to construction and procurement for clients. 

Rays Power Infra has filed preliminary papers for a Rs. 300 crore public issue. Presently, it is waiting for approval from SEBI and thereafter it will announce the IPO launching date.

Continue reading this blog to learn more about the company, its strengths, weaknesses and more.

Also Read: How To Apply For An IPO?

About Rays Power Infra Limited

Incorporated in 2011, Rays Power Infra is one of the leading solar power companies in India. It has implemented solar power projects with a combined capacity of 1,207 megawatts peak. Behind the history of the acquisition of land and its ability to liaise with the authorities of State land, Rays Power Infra has acquired more than 5,700 acres of plot for all its customers across India. 

Rays Power Infra is involved with turnkey solar power development projects with activities including land aggregation, execution of power purchase agreements, allocation of bay that exist between the sellers and buyers, and delivery of turnkey solar services. 

Apart from this, it is also involved in conducting solar EPC business and provides its customers solar park development services independently. These customers are offered services all throughout the entire value chain of solar power production. 

Additionally, the company added more services to other sectors of infrastructure including distribution, smart metering and transmission. To carry out its solar EPC business and turnkey solar services, Rays Power Infra Limited provides its customers with any kind of maintenance and operations services as per the requirements of its clients. In fiscal year 2020, this company ventured into the supply of E2W, commonly known as electric two-wheeler vehicles. 

Rays Power Infra has executed projects in all over 13 states existing in India including Rajasthan, Uttarakhand, Punjab, Tamil Nadu, Uttar Pradesh, Arunachal Pradesh and more. In recent years, it has expanded its operations in Vietnam and Bangladesh. 

Rays Power Infra has received orders of Rs. 618.90 crore from other business segments, Rs. 292.04 crore from turnkey solar services, Rs. 476.27 crore from solar EPC business, Rs. 454.80 crore from solar parks business and more, as of October 31, 2023. These orders aggregated to Rs. 1,842.01 crore.

During the fiscal year 2022 to 2023, the revenue of this company from Rs. 544.42 crore rose to Rs. 776.58 crore during the fiscal year 2021 to 2022. Profits after tax for this year gradually rose to Rs. 131.04 crore from the preceding year. 

Rays Power Infra IPO Details and Objectives

In January 2024, Rays Power Infra Ltd filed its draft red herring prospectus (DRHP) to the market regulator Securities and Exchange Board of India (SEBI) to launch its IPO. The company aims to raise funds for working capital requirements and general corporate usage. 

The IPO comprises two parts- a fresh issue and an offer for sale. The fresh issue consists of equity shares amounting up to Rs. 300 crores and an offer for sale of up to 2.99 million shares by promoter selling shareholders. The promoters involved in this OFS include Pawan Kumar Sharma, Sanjay Garudapally and Ketan Mehta. 

Once launched, its shares will get listed on BSE and NSE. However, this company has yet to make a declaration of its total offer size and price band of its upcoming IPO along with the bid opening and closing dates. For that, it has to wait till it receives SEBI’s green light.

Strengths

Before investing in an IPO, you must be aware of the strengths. This will enable you to make informed decisions. The strengths are: 

• It is an established solar power EPC company with a presence across the solar value chain. The company is also in a good position for capitalisation in the fastest-growing solar industry in India.
• Rays Power Infra Ltd has a history of executing solar EPC projects successfully across India since 2011.
• The company has grown steadily over the years with a team of experienced professionals. In an industry requiring working capital management, large equipment and manpower, it is important to stay careful during business expansion.
• Rays Power Infra Limited has a history of strong financial performance. Its total income has increased steadily at a CAGR of 54.22% during the fiscal year 2021-23. Following this, the solar firm is capable of lowering its costs and achieving high profit margins.

Also Read: How Can You Analyse An IPO?

Risks Involved

Apart from strengths, there are some risk factors involved with the business activities of Rays Power Infra Ltd IPO. They are:

• There are certain contingent liabilities of Rays Power Infra Ltd. Any disruptions in the contingent liabilities will affect the entire business, financial conditions and its results of operations.
• The company can get negative cash flows from its operating activities. Negative cash flows would impact the ability of Rays Power Infra Limited to service debt obligations and avail fresh borrowings.

Also Read: Risk of investing in IPO

Summing up

The launch date and price of Rays Power Infra Ltd IPO are yet to be decided by the company. Before these details are available, you must understand the business and its future scope if you are interested in investing. Go through the DRHP available on SEBI’s website to understand the company’s strengths, risks, threats, opportunities and financial situation. 

To understand the scope of your investment, you need to understand the company’s position in the industry it operates in. Go through its history and assess the capabilities of the management team. If you find it difficult to assess the merits/demerits of an IPO, you can always get help from a qualified investment expert.

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