InvestorQ : Can you tell me about the details of the Vikram Solar IPO, filed with SEBI?
Lavanya Subramanian made post

Can you tell me about the details of the Vikram Solar IPO, filed with SEBI?

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Anamika Sodhani answered.
2 months ago
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Even amidst the tepidity in the IPO markets, fresh filings are going on at a normal pace. The latest to file for IPO is Vikram Solar, which is one of the leading solar module manufacturers in India. Vikram Solar has just filed its draft red herring prospectus (DRHP) with SEBI for its proposed IPO. Typically, it takes SEBI around 2-3 months to approve the IPO post which it sends its observations to the issuer. The actual process starts after that.

Let me talk about the actual issue of Vikram Solar. The total size of the IPO will be in the vicinity of Rs.2000 crore. Out of this overall IPO size, Rs.1,800 crore will be by way of an offer for sales by the promoters and promoter group companies. The balance Rs.200 crore will be raised by way of fresh issue of capital. In terms of top line revenues, Vikram Solar is already the second largest in India after Adani Green Energy.

The offer for sale is neither capital dilutive nor EPS dilutive and also does not infuse any fresh funds into the company. It is more about change of ownership and higher free float. However, listing does give recognition and visibility to the company. The fresh issue component of Rs.200 crore would be EPS dilutive and also capital dilutive. However, it will also bring in fresh funds to be utilized by the company in the course of business.

Here are the financials of Vikram Solar. For FY21, Vikram Solar posted a 4% growth in revenues at Rs.1,577 crore while the net profits jumped more than six-fold from Rs.6.04 crore in FY20 to Rs.37.14 crore in FY21. The issue of Vikram Solar will be lead managed by JM Financial and Kotak Mahindra Capital. The IPO will perhaps hit the market around late May or June after the IPO issue is hopefully through by then.

Vikram Solar is poised to benefit from the renewable energy thrust of the government. The company has operational plants in West Bengal and Tamil Nadu with a total solar module manufacturing capacity of 2.5 gigawatts (GW). Currently, the government is already pushing for higher levels of clean and renewable energy. In these conditions, Vikram Solar sees a huge opportunity on focussing on the green energy side of the business.

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