IPO Size: Rs. 900 cr 

• Fresh Issue of Rs. 700 cr for (i) Rs. 477 cr capex (ii) Rs. 177 cr debt repayment of Rs.450 cr net debt
• Offer For Sale (OFS) of Rs. 200 cr by promoter (90% to shrink to 76% post IPO)

Price band: Rs. 442-465 per share

M cap: Rs. 5,910 cr, implying 15% dilution

IPO Date: Fri 19^th Sep to Tue 23^rd Sep 2025, Listing Fri 26^th Sep 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Haryana-based Solar PV Module Manufacturer

Saatvik Energy, promoted by IIT-D and LSE educated Garg-brothers, manufactures solar photovoltaic (PV) modules, with 3.7 GW installed capacity in Ambala (Haryana), as of 31.3.25 or 1.7 GW effective capacity with 84% utilization. Recently, installed module capacity has increased to 4.8 GW (~2.7 GW effective capacity) with a healthy order book of over 4 GW modules / Rs. 5,077 cr, to be executed in the next 12 months. Company also undertakes solar EPC contracts.

Plans 2.5x Capacity Rise + Backward Integration

1. Company is undertaking greenfield expansion for 4 GW module capacity in Odisha, with Rs. 563 cr capex, to be operational by July 2026, and part-funded from IPO proceeds to the extent of Rs. 477 cr.
2. It is backward integrating with 4.8 GW solar cell manufacturing plant in Odisha, first phase (50%), of which, is expected to be commissioned by end of FY27E and balance in FY28E.  
3. Saatvik also plans further backward integration through ingot and wafer manufacturing unit in Madhya Pradesh.

IPO will only fund module expansion, while cell and ingot capex will be a mix of internal accruals and debt.

EBITDA Margin Weaker than Peers

On 1.4 GW module sales in FY25, revenue stood at Rs. 2,158 cr with Rs. 354 cr EBITDA. Due to lack of backward integration, Saatvik’s EBITDA margin of 14.8% is poorer than most peers - Premier (30%), Waaree (23%), Websol (44%) but close to recently listed Vikram Solar’s 14.5%. Although Saatvik’s 63% RoE is much higher than peers’ 25-33% range.

Debt Eating into Profits

High debt of Rs. 450 cr (rated A-, upgraded 1 notch in April 2025), on net worth of Rs. 227 cr, eats into profits, leading to PAT of Rs. 214 cr (10% net margin, as against over 13% to 14% for peers). Post listing, though, debt to equity will drop to 0.3:1, with net debt to EBITDA ratio comfortable at 0.5:1.

Priced Lower than Peers

Rs. 177 cr debt repayment from IPO proceeds and increased capacity keep FY26E profit outlook healthy. M cap of Rs. 5,910 cr and enterprise value (EV) of Rs. 6,200 cr lead to an EV/EBITDA multiple of 12x and a PE multiple of 16x, on current year basis, with an estimated FY26E EBITDA of Rs. 530 cr and PAT of Rs. 330 cr.

• Newly listed Vikram Solar’s Rs. 13,000 cr valuation implies a 17x EBITDA and 40x PE. Vikram’s EV is at Rs. 13,000 cr on Rs. 750 cr expected FY26E EBITDA, while Saatvik’s Rs. 530 cr EBITDA for similar module capacity, no integration at present and similar EBITDA margin, is asking for only Rs. 6,200 cr EV, being ~25% lower valuation vis-à-vis Vikram.
• Waaree Energies with 4x capacity and integrated play is trading at 17x EV/EBITDA and 31x PE multiple
• Premier Energies is ruling at 18x EBITDA and 35x PE, for 27% EBITDA (~2x of Saatvik), integrated capabilities and debt-free balance sheet
• Smaller integrated peer Websol is at 20x EBITDA and 30x PE for significantly higher margin. 

Thus, Saatvik’s IPO is priced lower than peers, even after accounting for commencement cell manufacturing only by end of FY27E.

ALMM II compliance requires mandatory domestic sourcing of solar cells from June 2026 which will be an industry-wide tailwind, although Saatvik may not be 100% backward integrated by then. Nonetheless, it will be a beneficiary in the long term.