Hello everyone, and welcome! This article delves into the Vikram Solar IPO, an anticipated offering in the solar sector. We’ll explore the official dates, price band, company valuation, and the latest Grey Market Premium (GMP) trends to assess potential listing gains. Stay tuned for a detailed breakdown.
Key IPO Dates
The Vikram Solar IPO is scheduled to open on August 19th. Investors will have three days to apply, with the IPO closing on August 21st.
- August 19th: IPO Opening Date
- August 20th: Second day for application
- August 21st: IPO Closing Date The allotment information is expected by August 22nd. Refunds for non-allottees are scheduled for August 25th, the same day shares will be credited to demat accounts. The company’s shares are expected to list on both BSE and NSE on August 26th.
Price Band and Lot Details
The face value of each share is set at ₹10. The upper price band, which is the cut-off price to apply, is ₹332 per share. Investors must apply for a minimum of 45 equity shares per lot.
Issue Size Breakdown
The total issue size for the Vikram Solar IPO is approximately ₹2079 crore. This comprises both a Fresh Issue and an Offer For Sale (OFS).
- Fresh Issue: ₹1500 crore will go directly to the company.
- Offer For Sale (OFS): ₹579 crore will be for existing promoters and shareholders. The IPO is a book-building issue and will be listed on both BSE and NSE.
Share Allocation
The shares will be distributed among different investor categories as follows:
- Qualified Institutional Buyers (QIBs): 50% of the total issue (including anchor investors).
- Retail Investors: 35% of the total issue, approximately ₹700 crore worth of shares.
- High Net Worth Individuals (HNIs): 15% of the total issue.
Minimum Investment
To apply for one lot in the Vikram Solar IPO, a minimum investment of ₹14,940 is required.
- For Small HNI category, the requirement is approximately ₹2,09,160.
- For Big HNI category, the requirement is approximately ₹1,98,960.
Promoter Holding
Before the IPO, the promoter holding stood at 77.64%. Post-IPO, the promoter holding will decrease to 63.11%.
Financial Performance Highlights
The company’s financial health shows consistent growth across key metrics:
- Assets: Increased from ₹2476 crore in FY23 to ₹2585 crore in FY24, and further to ₹2832 crore in FY25.
- Total Income: Rose from ₹2092 crore in FY23 to ₹2524 crore in FY24, reaching ₹3459 crore in FY25. This indicates consistent year-on-year growth, possibly influenced by government strategies in the solar sector.
- Profit: Witnessed a significant jump from ₹14.5 crore in FY23 to ₹79.72 crore in FY24, and then to ₹139 crore in FY25, marking an approximate 75% year-on-year increase in profit.
- EBITDA: Grew from ₹186 in FY23 to ₹398 in FY24, and ₹492 in FY25.
- Net Worth: Currently stands at ₹86 lakh.
- Reserves & Surplus: Showed improvement from ₹113 crore to ₹192 crore, and then to ₹323 crore.
- Return on Equity (ROE): Approximately 17%.
- Return on Capital Employed (ROCE): 24.49%.
- Debt-to-Equity Ratio: 0.19%, which is significantly below 1, indicating a positive fundamental aspect.
- Net Profit Margin: Approximately 4%.
- EBITDA Margin: Approximately 14.35%.
- Price-to-Book Value: 8.46.
Valuation Analysis and Peer Comparison
The company’s Price-to-Earnings (P/E) ratio is set at 75. This valuation appears to be at a premium compared to its listed peers in the solar energy sector.
- B Energy IPO: P/E of 46.
- Premier Energy IPO & Wari Energy IPO: Both have a P/E of 47.
- Websol Energy System: P/E of 40. The industry P/E is approximately 43. This suggests that Vikram Solar’s P/E of 75 makes the company’s valuation appear overvalued, potentially limiting listing gains.
Grey Market Premium (GMP) and Listing Expectations
Despite the perceived high valuation, the Vikram Solar IPO is a much-awaited offering. Currently, the Grey Market Premium (GMP) is trading around ₹69-₹60. Based on this GMP, the expected listing price could be around ₹401, suggesting a potential listing gain of approximately 21% or about ₹3105 per lot. However, the current GMP momentum is not strong enough to solely rely on it for an investment decision.
Outlook and Decision Making
Given the company’s strong financial performance and the growth potential of the solar sector in India, the IPO holds interest. However, the valuation, particularly the high P/E ratio compared to peers, is a point of concern.
Investors are advised to consider multiple factors before applying:
- The overall market conditions.
- The subscription levels on the first and second days.
- The ongoing momentum of the Grey Market Premium.
Staying informed about daily GMP updates and subscription figures will be crucial for making an informed investment decision in the Vikram Solar IPO.
