Saatvik Green Energy IPO Opens: 'Subscribe For Long-Term' Says Anand Rathi — Check Issue Details

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Anand Rathi Report

Saatvik Green Energy Ltd.'s initial public offering launched today and the offer closes on Sep. 23. The manufacturer of solar photovoltaic modules in India and integrated solar project solution provider has fixed the price band in the range of Rs 442 to Rs 465 per equity share.

Investors can place bids starting from a minimum of 32 shares and in multiples thereafter.

The Rs 900-crore IPO comprises of fresh issue of 1.51 crore shares, worth Rs 700 crore, and an offer-for-sale component of 43 lakh shares, amounting to Rs 200 crore.

DAM Capital Advisors Ltd. Ambit Private Ltd., Motilal Oswal Investment Advisors Ltd. are the book-running lead managers for the public issue while KFin Technologies Ltd. is the registrar to the offer.

The allotment for Saatvik Green Energy IPO is expected to be finalized on Sep. 24. 

The shares will be listed on both the National Stock Exchange and the BSE on Sep 26.

Objects of the Issue:

1. Prepayment or repayment of all or a portion of certain outstanding borrowings and General purpose

2. Investment in wholly owned subsidiary Saatvik Solar Industries for setting up of a 4 GW solar PV module manufacturing facility at Odisha.

Strengths:

• Quality Customer Base and Large Order Book.

• Among the Leading Module Manufacturing Companies in India Offering Integrated Solutions to Independent Power Producers.

• Innovative Technology Solutions for the Solar Industry.

• Multiple Sales and Revenue Channels.

• Well-Positioned to Capture Favourable Industry Tailwinds.

• Experienced Promoters and Management Team with a Committed Employee Base.

Key Strategies:

• Backward Integration into Cell Manufacturing.

• Maintain the Position in the Solar Industry and Focus on Growing Share of Export Sales and EPC Services Internationally while expanding Customer Base in India and Internationally.

• Continue to Develop and Reinforce Technology to Manufacture Quality Modules.

• Expand Distribution Network across India and Create Retail Brand for Solar Panels.

Valuation:

Saatvik Green Energy, with an operational capacity of ~3.80 GW as of March 2025, is among India’s fastest-growing solar PV module manufacturers and is listed in MNRE’s Approved List of Module Manufacturers (ALMM), reinforcing its credibility.

The company is executing an aggressive capacity expansion plan, including a 4.00 GW module facility in Odisha by FY26 and a 4.80 GW solar cell line by FY27, supported by ~Rs 1,300 crore of capex funded entirely through internal accruals.

Beyond FY27, SGEL plans to establish a fully integrated ingot–wafer cell module facility in Madhya Pradesh, ensuring strong long-term growth visibility.

The company is strategically enhancing its market position by focusing first on expanding module manufacturing capacity, then integrating solar cell production, and eventually moving into raw material manufacturing.

On the valuation front, based on annualized FY25 earnings, the company is seeking a P/E of 27.4 times, and a post-issue market capitalization of approximately Rs 59,102 million, making the issue appears to be fully priced.

Based on benefits of backward integration, module capacity expansion, and cell integration which could capitalize in long run in its profitability. Hence, we assign Subscribe for long term rating for the issue.

Key Risk:

• Customer Concentration Risk: Top 10 customers contributed 57.77%, 63.86%, and 79.38% of revenue in FY25, FY24, and FY23, respectively. Loss of any key customer could materially impact revenue, profitability, and cash flows.

• Capital Expenditure Risk: A substantial portion of the Net Proceeds is earmarked for capital expenditure, including investment in the wholly owned subsidiary, Saatvik Solar Industries Private Limited, to establish a 4.00 GW solar PV module manufacturing facility at Gopalpur Industrial Park, Odisha. The project is exposed to risks such as execution delays, cost overruns, and unforeseen implementation challenges, which could adversely affect the company’s expansion plans, financial performance, and return on investment.

• Project and Land Lease Risk: The Company plans to deploy a major portion of Net Proceeds towards setting up a 4.00 GW solar PV module facility at Gopalpur Industrial Park, Odisha, on 14.12 acres of sub-leased land from Tata Steel Special Economic Zone Limited. Any execution delays, cost overruns, or non-extension of the sub-lease could adversely impact expansion plans and financial performance.

• Product Concentration Risk: The Company’s revenue is highly dependent on a limited product portfolio, with Mono PERC modules contributing 38.72%, 86.72%, and 71.72% of revenue from operations in FY25, FY24, and FY23, respectively. Heavy reliance on a single product category exposes the business to risks from technological shifts, evolving customer preferences, and market dynamics, which could materially impact growth and profitability.

• Dependence on Third-Party Suppliers: The Company relies on third-party suppliers for critical raw materials and components required in its manufacturing process. Disruptions in supply chain continuity or volatility in input prices could adversely impact production schedules, operating costs, cash flows, and overall financial performance.

• Exposure to Trade Policies and Import Duties: The Company is subject to import duties and regulatory restrictions on materials and equipment sourced from China for its manufacturing operations. In addition, its products face import duties and trade restrictions in certain export markets. Such measures may increase costs, impact competitiveness, and adversely affect margins and international sales.

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