Solarworld Energy Solutions plans to raise Rs 600 crore via IPO

The Uttar Pradesh-based business, which specializes in engineering, procurement, and construction (EPC) services for solar-powered projects, has until the Red Herring Prospectus is filed with the Registrar of Companies to raise an additional Rs 110 crore through a preferential issue or another means. The amount mentioned above will be subtracted from the new issue if the company is successful in raising money through a pre-IPO placement. The capital expenditure (CAPEX) model and the renewable energy service company (RESCO) model are the two models that SolarWorld uses to provide solar energy solutions. It also offers operations and maintenance (O&M) services under these models. O&M services were packaged for two to five years in approximately 95% of its EPC projects until August 2024. The business additionally inked an equity cooperation agreement with ZNSHINE PV-Tech Co Ltd, a Bloomberg NEF tier-1 supplier from China, in May 2024 to establish a solar panel manufacturing facility. Applying backward integration to services that utilize internal components is its main goal. Between FY25 and FY29, 180–185 GW more solar capacity is expected. Currently, the company is engaged in projects totaling 420 MW AC, or 592 MW DC, and has finished projects totaling 253.67 MW AC, or 336.17 MW DC. At the end of August 2024, Solarworld had an order book valued at Rs 799.7 crore. SJVN Green Energy, Haldiram Snacks, Ethnic Food Manufacturing, and Samiksha Solarworld are among its key clients.

Initial Public Offering — Solarworld Energy Solutions:

The capital markets regulator SEBI received preliminary documents from solar energy solutions provider Solarworld Energy Solutions on September 29 in an attempt to raise Rs 600 crore through an IPO. An offer of shares by promoter Pioneer Facor IT Infradevelopers for the sale of shares valued at Rs 50 crore is combined with a fresh issuance of equity shares valued at Rs 550 crore to form the IPO. Public investors own the remaining 17.85% of the company’s shares, among them Value Quest Scale Fund. This leaves the promoters with an 82.15% stake.

Out of the proceeds from the new issue, it plans to invest Rs 420 crore in its subsidiary Kartik Solarworld, helping to partially finance the construction of a 1.2 GW solar PV TopCon Cell manufacturing facility in Pandhurana, Madhya Pradesh. Additionally, the money that remains will be put to use for standard business needs. The merchant bankers assigned to this issue are Nuvama Wealth Management and SBI Capital Markets.

Performance of Solarworld Energy Solutions:

In recent years, Solarworld has demonstrated strong financial performance, placing it in competition with publicly traded companies such as Waaree Renewable Technologies, Gensol Engineering, KPI Green Energy, Oriana Power, and Sterling & Wilson Renewable Energy. In comparison to the previous fiscal year, net profit in the fiscal year 2024 increased by 248.4% to Rs 51.7 crore, while revenue increased by 115.5% to Rs 501 crore.

Conclusion: Through an IPO, Solarworld Energy Solutions is raising money to invest Rs 420 crore in Kartik Solarworld, a subsidiary, and to use the remaining funds for general business purposes.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.