Vikram Solar Ltd

About Vikram Solar Limited IPO

Vikram Solar Limited IPO is an IPO of TBA. It consists of an offer for sale up to 17,450,882 equity shares and a fresh issue aggregating up to ₹1,500 crores. The shares will be allotted on TBA. The credit of shares to the demat account will take place on TBA and the initiation of refunds will take place on TBA.

Objective of Vikram Solar Limited IPO

• Partial capital expenditure funding through investment in their wholly owned subsidiary, VSL Green Power Private Limited, for setting up an integrated 3,000 MW solar cell and 3,000 MW solar module manufacturing facility.

• Funding of capital expenditure through investment in their wholly owned subsidiary, VSL Green Power Private Limited, for expanding the manufacturing capacity of the solar module manufacturing facility set up under the Phase-I Project from 3,000 MW to 6,000 MW at the Project Site (Phase-II Project).

• General corporate purposes.

Industry Outlook

India aims to build its presence across all stages of PV manufacturing over the next two to three years. In November 2020, the GoI introduced the PLI scheme for manufacturing high-efficiency solar PV modules with a financial outlay of ₹4,500 crores. It later enhanced the outlay by ₹19,500 crores under the Union Budget for fiscal 2023.

Renewable energy installations (incl. large hydro) have increased threefold to ~191 GW as of March 2024, as compared with ~63 GW as of March 2012 (source: MNRE), led by various central and state-level incentives. As of March 2024, installed grid-connected renewable energy generation capacity (incl. large hydro) in India constituted ~43% of the total installed generation base in India.

India is expected to add around 175-180 GW of solar capacity over fiscals 2025-2030. Considering the average module price of USD 0.22/Wp, this capacity addition provides a total opportunity of USD ~3800-4000 crores over fiscals 2025-2030.

Due to PLI capacities, domestic module production is expected to increase by 64-69 GW. Utilisation rate is expected to average between 40-45% between FY24- FY29. About 20-30% of production is to be driven towards exports to the extent of 13-15 GW in FY29. Exports in FY24 are driven by two factors: The USA’s ban on the Chinese region and supply chain diversification.

Company Information

As of March 31, 2024, Vikram Solar Limited is one of India’s largest solar photovoltaic (“PV”) modules manufacturers in terms of installed capacity, with more than 15 years of experience in the industry. They have one of the largest enlisted capacities among pure-play non-captive manufacturers in the Ministry of New & Renewable Energy’sApproved List of Module Manufacturers (“ALMM”) with 2.43 GW enlisted therein as of July 2024.

Vikram Solar Limited strives to deliver reliable solar solutions through highly efficient and innovative products, and they propose to achieve this through their specialised high-efficiency PV module manufacturing.

They have developed strong engineering capabilities in designing highly-automated production lines using specifically chosen tools, allowing them to increase the average efficiency level (i.e. a measure of electrical energy generated from a solar module to the amount of light energy from the sun that is incident on it (Efficiencies)) of their products from 17.52% in CY 2016 to 23.34% in CY 2024.

Vikram Solar Limited IPO Risk Factors

• As of Fiscal 2024, 76.13% and 89.38% of their revenue from operations is derived from their top five customers and top ten customers, respectively, and thus, their revenue from operations is highly dependent upon a limited number of customers. Any adverse changes affecting their customers or their relationship with such customers could have an adverse effect on their financial performance and the results of operations.

• Changes in the price of wafers, solar photovoltaic cells and other raw materials due to changes in demand or other factors could adversely affect their cost of materials, which may have a material adverse effect on their business, financial condition and results of operations.

• Their exports, which as of fiscal 2024, fiscal 2023 and fiscal 2022 represented 61.58%, 21.63% and 11.05%, respectively, of their total revenue, may be dependent on the policies passed by the governments of exporting countries, in particular, the United States, as in fiscal 2024, fiscal 2023 and fiscal 2022, 99.22%, 83.80% and 96.95%, respectively, of their total export sales is derived from the United States. Any unfavourable change in such policies may adversely affect their business, results of operations, and prospects.

Anchor Investor Information

The Anchor Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date.

IPO Registrar and Book Running Lead Managers

Book running lead managers:

JM Financial Limited
Nuvama Wealth Management Limited
UBS Securities India Private Limited
Equirus Capital Private Limited
PhillipCapital (India) Private Limited

Registrar for the IPO is Link Intime India Private Limited

Business Model

The company earns its revenue through the following sources:

(i) Domestic solar PV module sales that comprises:
(a) key customer accounts for orders with a larger volume (10MW –500MW and above) and
(b) sales through a distribution network for smaller retail orders, whereby they sell their products to distributors via exclusive arrangements who resell onwards to end-customers;
(ii) export of solar PV module sales to their global key customer accounts and
(iii) integrated end-to-end solar energy solutions, offering engineering, procurement and construction (EPC) services, operations and maintenance (O&M) services to their customers.

Company Growth Trajectory

They have expanded their global footprint through a sales office in the United States of America and a procurement office in China and have supplied solar PV modules to customers in 39 countries, as of March 31, 2024. Since their inception, up to March 31, 2024, they have shipped over 5.40 GW of solar PV modules globally (including India) and over the last three fiscals, they have shipped 2.07 GW of solar PV modules globally (including India). Their international customers include some of the marquee renewable energy players, including PureSky Community Solar Inc. and Sundog Solar LLC, etc. Their revenue from operations derived from their exports has also increased at a CAGR of 184.42% between fiscal 2022 to 2024 and represented 11.05%, 21.63% and 61.58% of their revenue from operations for fiscals 2022, 2023 and 2024, respectively.

Company Market Position

As of March 31, 2024, they are one of India’s largest solar photovoltaic (PV) modules manufacturers in terms of installed capacity, with more than 15 years of experience in the industry (Source: CRISIL Report).

The company is the first Indian company to be featured in the Kiwa Photo-Voltaic Evolution Labs (PVEL) report in 2017 in relation to the results of their modules reliability testing and being a ‘Top Performer’ for six consecutive times in PVEL’s Reliability Scorecard since 2019 (Source: CRISIL Report), in various segments (namely simulated hail, thermal cycling, damp heat, UV exposure and degradation, light-induced degradation, static and dynamic load, and light and elevated temperature-induced degradation tests).

Their capability in the solar domain extends beyond solar PV manufacturing, where in 2013, they designed and installed a 100kW installation at the Cochin International Airport, Kochi, Kerala, which is the world’s first fully solarised airport, and further they were also one of the first to execute a floating solar plant in India (Source: CRISIL Report).

How To Check Allotment Status of Vikram Solar Limited IPO?

You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar Link Intime India Private Limited. To check the status on the BSE website:

• Visit the BSE website
• Click on “Investor Services” and choose “Application Status Check”
• Choose the issue type — Equity or Debt (Equity in this case)
• Select the Issue Name from the drop-down. The issue name is the company’s name, which is Vikram Solar Limited
• Enter your application number or PAN number
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

• Visit the Link Intime India Private Limited website
• Choose “Public Issues” from the “Investor Services” drop-down
• Select Vikram Solar Limited from the drop-down
• Enter your PAN number or Application number
• Click on “Submit” to know the allotment status