Vikram Solar IPO Opens For Subscription Today — Should You Subscribe Or Avoid? Read Anand Rathi's Report

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Anand Rathi Report

Vikram Solar Ltd. will launch 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.

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 Issue:

• Million Funding Capex for Phase-I & Phase-II project and

• general purpose.

Strengths:

• One of the largest Indian solar PV module manufacturers with 4.50 GW operational capacity and actual production of 1,286.10 MW as on March 31, 2025.

• Strong R&D focus with robust quality control systems.

• Strong technical proficiency in the solar PV module manufacturing.

• Strong presence in domestic and international markets.

• Strong brand recognition and customer base due to good understanding of the customers and the high quality of products.

• Robust financial performance with a strong order book, providing clear visibility on future growth.Led by promoters and an experienced management team with an excellent track record.

Key Strategies:

• Maintain domestic market position through strategic expansion of solar PV module manufacturing and backward integration into solar cell manufacturing.

• Continued focus on developing new and innovative products and services.

• Expand the BESS manufacturing operations.

• Strengthen domestic presence through a dedicated retail network and distribution model.

• To become a significant global player in the international solar PV module market.

• Diversify the supply chain.

• Expand into captive projects and cater to the untapped potential in the C&I renewable energy market.

• Further new initiatives for decarbonization.

Valuation:

Vikram Solar is one of India’s largest makers of solar PV modules, with 4.50 GW of installed capacity and over 17 years of industry experience as of March 2025. Its portfolio spans high-efficiency PV modules, EPC, and O&M services, serving top clients like NTPC and Adani.

To meet the fast-growing demand, the company is scaling up its solar PV module capacity to 15.50 GW by FY26 and 20.50 GW by FY27 through both new (Greenfield) and existing (brownfield) projects.

The Company is also diversifying into solar cell manufacturing with two facilities in Tamil Nadu, having a total planned capacity of 12 GW by FY27. In addition, it is setting up a Greenfield BESS project, starting with 1.00 GWh and expandable to 5.00 GWh by FY27.

This strategic entry into energy storage will strengthen the company’s growth prospects and improve profitability. On the valuation front, based on annualized FY25 earnings, the company is seeking a P/E of 85.8 times, and a post-issue market capitalization of approximately Rs 1,20,090 million, making the issue appear aggressively priced. We believe, business includes high capex, client concentration, and global supply chain exposure.

Yet, strong order book (10.3 GW), backward integration, and government support position it well for long-term growth. Thus, we assign Subscribe for Long-Term rating for this issue.

Key Risk:

• Revenue concentration:

In FY25, FY24, and FY23, solar PV modules contributed 98.2%, 97.3%, and 46.8% of total operating revenue, respectively. Since the business is heavily reliant on this product, any slowdown in demand could have a significant impact on revenue and profitability.

• Customer dependency:

In FY25, 77.50% of revenue came from the top five customers and 88.72% from the top ten customers. This high reliance on a limited customer base means that any adverse developments with these customers or deterioration in relationships could affect financial performance.

• Expansion risk:

• The Company’s future growth is tied to setting up a new manufacturing facility in Tamil Nadu through its subsidiary, VSL Green Power Private Limited, in two phases, along with cost-effective expansion of existing capacity. Any delay or failure in executing these plans could harm business growth, reputation, financial strength, and operations.

• Raw material price volatility:

Fluctuations in the prices of wafers, solar PV cells, and other key inputs driven by demand shifts or other factorscan increase material costs, adversely affecting profitability and overall financial performance.

• Legal exposure: The Company, along with certain Directors (including Promoters) and one Corporate Promoter, is involved in ongoing legal proceedings. Any unfavorable outcome could result in liabilities, penalties, or reputational damage, negatively impacting the company’s financial condition and cash flows.

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