All you need to know about Vikram Solar’s IPO

Vikram Solar’s Upcoming IPO: What You Need to Know

Kolkata-based Vikram Solar, one of India's top solar photovoltaic (PV) module manufacturers, has recently taken a big step towards going public. The company has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) to secure funding through an Initial Public Offering (IPO).

What does Vikram Solar’s IPO Include?

Vikram Solar's IPO features a fresh issuance of shares intended to raise up to ₹1,500 crore, in addition to an offer-for-sale (OFS) of up to 17.45 million equity shares from the promoter group.

The face value of each equity share in this IPO is ₹10. The offer features a reserved allocation for eligible employees, who will receive a discount when participating in the employee subscription segment. Additionally, the company, in coordination with the book-running lead manager, may also consider a pre-IPO placement of specified securities valued at up to ₹300 crore.

How will the Fresh Funds be Used?

The fresh funds raised from this IPO will be used in a few key areas:

₹793.36 crore will be allocated for capital expenditures to invest in the wholly-owned subsidiary, VSL Green Power Private Ltd, for establishing a 3,000 MW solar cell and module manufacturing facility.

Additionally, ₹602.95 crore will be allocated to expand the existing solar module manufacturing capacity from 3,000 MW to 6,000 MW.

The remaining funds will be used for general corporate purposes, which typically cover operational expenses or new business initiatives.

Who is Handling the IPO?

The IPO will be managed by Nuvama Wealth Management and other book-running lead managers, while the registrar responsible for the IPO process will be Link Intime India Private Ltd.

This IPO marks an important step for Vikram Solar as they look to raise funds to expand their production and strengthen their position in the solar energy market.

Industry Analysis: 

In the Interim Budget for 2024-2025, the solar power grid infrastructure allocation increased to Rs. 8,500 Crore (US$ 1.02 billion) from Rs. 4,970 Crore (US$ 0.60 billion). As of December 2023, India's installed solar capacity reached 73.32 GW, a 26-fold increase over nine years. In 2023, 7.5 GW was added, and 9,008.47 MW in January 2024. Solar power contributed 16.9% of total installed power and 40.1% of renewable capacity, with 59 solar parks approved, totaling 40 GW. India generated 75.57 billion units (BU) of solar power in the first eleven months of FY24.

About Vikram Solar:

Vikram Solar Limited, one of India’s largest solar module manufacturers, operates in 39 countries and has shipped over 5.4 GW of modules globally. Established in 2005, with factories in Kolkata and Chennai, it produced 16,11,014 modules and shipped 878 MW globally in FY 2023-24. The company’s portfolio includes 1,400 MW+ commissioned EPC projects and 700 MW+ in ongoing O&M projects.

Key achievements include a 152 MW contract with NTPC, a 250 MW deal with Gujarat Industries Power, and a 397.7 MW supply for NTPC’s Gujarat Solar Project. Recognized as a ‘Top Performer’ in PVEL’s reliability scorecard for six consecutive years, Vikram Solar’s 3.5 GW production capacity is listed in Bloomberg NEF Tier-1. The company also launched TOPCon and HJT PV modules.

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