Vikram Solar IPO Opens For Subscription — Should You Bid? Read DRChoksey's Analysis

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DRChoksey Report

Vikram Solar Ltd. launched its initial public offering on Aug. 19 and the offer closes for subscription on Aug. 21.

The Kolkata-based solar energy solutions provider company has fixed the price band in the range of Rs 315 and Rs 332 per equity share with a face value of Rs 10. Investors can place bids starting from a minimum of 45 shares and in multiples thereafter.

The Rs 2,079-crore IPO comprises of fresh issue of shares up to Rs 1,500 crore and an offer for sale of up to 17.45 million equity shares by promoters worth Rs 579 crore.

The allotment for Vikram Solar IPO is expected to be finalized on Aug. 22.

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

JM Financial Ltd., Nuvama Wealth Management Ltd., UBS Securities India Pvt., Equirus Capital Pvt. and PhillipCapital India Pvt. are the book-running lead managers for the issue while MUFG Intime India Pvt Ltd. is the registrar to the offer.

Objects of the Offer

1. Partial funding of capex through investment in wholly owned Subsidiary (Phase-I Project),

2. Funding of capex through investment in wholly owned Subsidiary (Phase-II Project),

3. General corporate purpose.

Outlook:

Vikram solar is one of largest the pure-play solar PV module manufacturer in India, with an extended operational experience of 17 years, over which it has rapidly scaled its manufacturing capacity from 12 MW in 2009 to 4.5GW as of Jun’25.

Over the past few years, it has pivoted its strategy towards domestic manufacturing of solar modules from EPC and O&M segments, to leverage the financial incentives provided by the government and to capitalize growing domestic demand for solar based renewable energy source led by initiatives including National Solar mission and ALMM restrictions.

The company plans to rapidly scale its manufacturing operations by executing significant expansion its solar module capacity to 20.5 GW by FY27, backward integrate into solar supply chain by venturing into solar cell by setup of 12 GW capacity by FY27 in Tamil Nadu and diversify revenue base by venturing into BESS with an installed capacity of 5 GWh by FY27.

Despite of pivoting its focus on module manufacturing, the Company has been able to grow its revenue and Ebitda at 28.5% and 62.6% CAGR, led by sustained increase in domestic demand, technological upgradations and higher operating leverage driven by higher capacity utilizations.

Moreover, it has been able to drive improvement in Ebitda margins from 9.0% in FY23 to 14.4% in FY25, on the back of government interventions including levy of custom duty and Agriculture Infrastructure and Development Cess (AIDC), along with ALMM restrictions on all imports and domestic manufacturers.

The company through its initial issue plans to raise Rs ~150 billion through fresh equity, to fund the CapEx of Rs 136.5 billion to augment its solar module, solar cell and BESS capacities in India and the US, and Rs 13.5 billion for general corporate purposes.

We believe the company to deliver strong revenue and profitability growth on the back on higher utilization, increased capacity and margin improvement realized by synergy benefit with its current operations.

Viram Solar initial issue is available at 24.8x TTM EV/ Ebitda, compared to peer average of 26.3x TTM EV/Ebitda. We believe the its initial issue to be fairly valued, and assign a “Neutral” rating, led by its inferior margin and return profile compared to the peers on back of lack on backward integrations.

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