Saatvik Green Energy files draft papers to mobilise Rs 1,150 crore via IPO, to expand solar PV module facility – EQ

In Short : Saatvik Green Energy has filed draft papers with the Securities and Exchange Board of India (SEBI) to raise Rs 1,150 crore through an Initial Public Offering (IPO). The funds will be utilized to expand its solar photovoltaic (PV) module manufacturing facility, supporting its growth in the renewable energy sector and enhancing its production capacity to meet the growing demand for clean energy solutions.

In Detail : Gurugram-based Saatvik Green Energy has filed preliminary papers with the capital markets regulator SEBI as it plans to raise Rs 1,150 crore through its initial share sale for the expansion of solar photovoltaic module manufacturing facility.

The IPO is a combination of fresh issuance of equity shares worth Rs 850 crore, and an offer-for-sale of Rs 300 crore worth shares by the existing shareholders. Promoters Parmod Kumar and Sunila Garg will be selling Rs 150 crore worth shares in the offer-for-sale.

The company may also intend to raise Rs 170 crore before the filing of the red herring prospectus with the Registrar of Companies, i.e. a pre-IPO placement. If it manages to undertake the pre-IPO placement, the said amount will be reduced from the fresh issue component.

Promoters hold 90.05 percent stake in the company, and the remaining 9.95 percent stake is owned by the public shareholder Prashant Mathur.

Saatvik Green Energy commenced its solar photovoltaic module manufacturing operations in 2016 and has expanded its annual installed capacity from 125 MW in FY17 to about 1.8 GW in FY24. It currently operates two module manufacturing facilities in Ambala, Haryana and is in the process of adding a third 2.0 GW module manufacturing capacity, which is expected to be operational in the fourth quarter of current fiscal, taking the total installed capacity at Ambala plants to 3.8 GW.

Furthermore, it is also expanding manufacturing capacity with plans to set up cell and module manufacturing facility in Odisha. The new facility will have a cell line manufacturing capacity of 4.80 GW, which is expected to be operational in FY27; and a module production capacity of 4.0 GW, which is expected to be operational in FY26.

It intends to spend Rs 552.75 crore out of net fresh issue proceeds in Odisha facility through wholly owned subsidiary Saatvik Solar Industries.

The establishment of the proposed manufacturing facility in Odisha gives several locational advantages to the company. This includes the availability of a capital investment subsidy of 30 percent of the capital investment in plant and machinery with no upper cap, 100 percent reimbursement of stamp duty, power tariff reimbursement of Rs 2.00 per unit for 10 years, 100 percent electricity duty exemption for the first 10 years and employment subsidiaries in the form of reimbursement of ESI or PF contribution per month for seven years for employees that are domiciled in Odisha, as per the draft papers.

Out of the fresh issue funds, Saatvik Green Energy will utilise Rs 108.06 crore for repaying debt, and the remainder money for general corporate purposes.

The company also provides operations and maintenance (O&M) services to customers primarily with respect to the EPC projects undertaken by it.

The company that competes with recent listed peers like Waaree Energies, and Premier Energies has recorded profit at Rs 100.5 crore for the fiscal 2024, growing more than 21-fold from Rs 4.7 crore in the previous fiscal. Revenue during the year grew by 78.8 percent on-year to Rs 1,088 crore

EBITDA (earnings before interest, tax, depreciation, and amortisation) in FY24 surged 10-fold to Rs 147.6 crore but margin dropped significantly by 1,080 bps to 13.6 percent compared to previous fiscal.

Profit in the three-month period ended June 2024 stood at Rs 21.2 crore, growing by 52 percent from Rs 14 crore in the same period previous fiscal, with EBITDA rising 55.1 percent to Rs 32.5 crore and margin expanding by 420 bps to 13.2 percent during the same period. Revenue for the June quarter increased by 5.3 percent on-year to Rs 246 crore.

Saatvik Green Energy has appointed DAM Capital Advisors, Ambit, and Motilal Oswal Investment Advisors as merchant bankers for its public issue.