GK Energy
IPO Size: Rs. 464 cr
- Fresh Issue of Rs. 400 cr to meet working capital needs of Rs. 322 cr
- Offer for Sale (OFS) of Rs. 64 cr by the promoter (93% stake to drop 79% post IPO)
Price band: Rs. 145-153 per share
- Rs. 100 cr pre-IPO placement at Rs. 153 per share on 26th Aug 2025
M cap: Rs. 3,103 cr, implying 15% dilution
IPO Date: Fri 19th Sep to Tue 23rd Sep 2025, Listing Fri 26th Sep 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Pune-based Solar Pump EPC Company
GK Energy is a 17 year old solar agri pumps EPC company, empaneled as a vendor under PM KUSUM Component-B scheme, with over 90% of Rs. 1,100 cr revenue generated from Maharashtra. It enjoys 15% market share in Maharashtra, under the scheme.
Having installed 8,600 pumps in the first 7 months of CY25, current order book stands at Rs.1,029 cr. It is undertaking backward integration, by establishing 1 GW solar panel manufacturing capacity in Maharashtra, to be operational by Sep 2026.
Margin Lower than Peers
On FY25 revenue of Rs. 1,095 cr, EBITDA of Rs. 204 cr led to 19% EBITDA margin. While this is healthy on an absolute basis, it trails peers Shakti Pumps (24%) and Oswal Pumps (29%). FY25 PAT stood at Rs. 133 cr, leading to 12% net margin and an EPS of Rs. 7.9, on equity of Rs. 35 cr (FV Rs. 2 each).
Asset Light Business
Company has only Rs. 13 cr of fixed assets, with funds required only for working capital, mainly debtors. This is the reason for IPO, as net working capital is close to 3 months.
Post Rs. 100 cr pre-IPO placement, net worth has expanded to Rs. 309 cr currently, with net debt under Rs. 60 cr. Thus, company’s plan for diversification to other states and backward integration via solar panel manufacturing (approx.. Rs. 250 cr capex) can be supported by the balance sheet.
FY25 RoE was over 60%, which is likely to remain over 35% post listing.
Priced Lower than Peers
M cap of Rs.3,100 cr leads to a PE multiple of 19.5x, on historic FY25 basis, lower than Shakti’s 26x and Oswal’s 21x. On FY26E EPS of about Rs. 9, GK Energy IPO is priced at PE multiple of 17x, which can expand by ~15%, making the pricing attractive.
21st Sep 2025 at 08:13 pm