Saatvik Green Energy IPO: Should You Subscribe Or Avoid? Read DRChoksey's Report

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DRChoksey Report

Saatvik Green Energy Ltd.'s initial public offering will open for subscription on Sep. 19 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.

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.

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 Offer

• Prepayment or repayment, in full or part, of certain outstanding borrowings.

• Investment in our wholly owned subsidiary, Saatvik Solar Industries Pvt. Ltd., through debt or equity for repayment/prepayment of its outstanding borrowings, in full or in part Investment in our wholly owned subsidiary.

• Investment in our wholly owned subsidiary, Saatvik Solar Industries Pvt Ltd., for establishing a 4 GW solar PV module manufacturing facility at Gopalpur Industrial Park, Odisha.

• General corporate purposes.

Strategies:

• Backward Integration

The company aims to setup a proposed 4.8 GW integrated cell line and a 4.0 GW module manufacturing facility at Odisha (targeted for FY27 and FY26, respectively) and plans to setup an ingot, cell, and wafer plant at Madhya Pradesh, with an approach to reduce reliance on external suppliers, strengthens supply chain and enhances long-term sustainability.

• Strategic Capacity Expansion

To meet rising demand, the company aims to add 1.0 GW module capacity as Ambala (Q2FY26) and setup new capacities at its proposed Odisha facility, with an vision to capture a larger market share and strengthen its presence in both utility-scale and distributed solar segments.

• Diversified Sales & Customer Base

The company plans to expand its EPC services globally while growing its domestic customer base across utilities, commercial and industrial, rooftop, and solar pump segments, supported by a robust distribution network of 53 selling partners, include 23 resellers, 19 distributors and 11 channel partners across various states in India.

• Adoption of Innovative Technology

The company continues to invest in cutting-edge technologies such as half-cut, MBB, circular-ribbon modules, N-TopCon, Mono PERC, and G12R TopCon modules (up to 625 Wp). Early adoption of technologies drives efficiency by reducing energy loss and positions the company as a leader in advanced solar solutions in India.

• Integrated Solutions Offering

It has built an integrated solar solution platform by offering manufactured modules, along with provision of EPC and O&M services, to ensure end-to-end solutions for reliable project execution, superior performance, and high customer satisfaction.

• Quality Control and Operational Excellence

The company maintains stringent quality assurance practices, including rigorous in-house testing, comprehensive documentation, automated process controls, and Six Sigma methodologies. These measures enhance productivity, ensure product durability and efficiency, and strengthen customer trust in its offerings.

Outlook:

Saatvik Green Energy, is one of the leading module manufacturer in India, with an overall module manufacturing capacity of 3.8 GW (as of Jun 30, 2025), spanning across ~724k Sq. Ft. facility at Ambala, Haryana. Since inception the company has delivered over 2.5 GW of module to domestic and international customers.

It deploys range of technologies to fulfill diverse consumer needs, through a distribution network of 53 selling partners, including 23 resellers, 19 distributors and 11 channel partners. Led by its big manufacturing base and its proximity to solar lucrative states including Rajasthan and Madhya Pradesh and strong exports, its revenue has witnessed a growth of 88.3% CAGR, while its Ebitda has grown at 364.5% CAGR over FY23- 25, led by improvement in margins on account of strong operating leverage. Though its initial issue, the company plans to raise ~Rs 9 billion, spit across ~Rs 7 billion of fresh issue and ~Rs 2 billion offer-for-sale.

Fresh issues is to be utilized for funding ~Rs 1.75 for prepaying borrowings, Rs 4.8 billion for funding proposed facility at Odisha and rest for general corporate purposes.

Saatvik Green Energy’s initial issue is priced at 20.0x TTM EV/Ebitda, compared to peer average of 28.0x TTM EV/Ebitda, which appears to be fairly priced in, on comparing its financial performance with its domestic listed peers.

Moreover, we expect the Company to perform better led by its proposed module and cell capacity at Odisha, which will drive improvement in overall margins.

We assign “Subscribe” rating to the issue.

Risks:

• High Customer Concentration - Top 10 customers contributed ~57.8% of revenue in FY25,reflecting high customer concentration. Losing any major customer could significantly impact its business and financial operation.

• High Volatility in Raw Material Costa and Other Supply Risks - Solar PV cell prices have witnessed significant swings over the last few years, and further swing can impact the cost structure overall profitability. Dependence on third-party suppliers means disruptions or unfavorable contracts could hurt operations and cash flow.

• Import Duties and Trade Restrictions - Levy of import duty on its raw material can significantly impact its margins, while trade barriers by customer countries can impact its revenue growth and business operations.

• High Operation Concentration - All its manufacturing capacities are located at Ambala, Haryana, exposing to higher operational risks such as local disruptions, change in political regime, and change in policy support, may delay production and shipments.

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