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Vikram Solar

By Geetanjali Kedia
about 17 hours ago

IPO Size: Rs. 2,079 cr

  • Fresh Issue of Rs. 1,500 cr for capex of Rs. 1,365 cr

  • Offer For Sale (OFS) of Rs. 579 cr by the promoter (78% to shrink to 63% post IPO)

Price band: Rs. 315-332 per share

M cap: Rs. 12,009 cr, implying 17% dilution

IPO Date: Tue 19th Aug to Thu 21st Aug 2025, Listing Tue 26th Aug 2025

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

 

Kolkata-based Solar PV Module Manufacturer

Vikram Solar manufactures solar photovoltaic (PV) modules, having 4.5 GW of installed (rated) capacity in West Bengal and Tamil Nadu, with an effective capacity of 2.85 GW. Its enlisted capacity, as per Ministry of New & Renewable Energy’s Approved List of Modules and Manufacturers (ALMM) is 2.85 GW, as of 30.6.25. Outstanding order book stood at 10.34 GW, planned to be executed in the next 1.5 years.

 

4x Capacity by FY27E

Vikram Solar is undertaking Rs. 3,150 cr capex, for a 3-pronged expansion:

  • Capacity Increase: Greenfield expansion of PV module manufacturing capacity in Tamil Nadu to 15.50 GW, by FY26E and brownfield expansion in West Bengal and US, taking capacity up to 20.50 GW, by FY27E.

  • Backward Integration: 2 solar cell manufacturing facilities in Tamil Nadu, aggregating 12 GW, of which, 3 GW is likely to be commissioned by Sep 2026

  • Diversification: 1 GWh greenfield battery energy storage system project (BESS) in Tamil Nadu, with final capacity of 5 GWh by FY27E.

Of this, Rs. 84 cr has been deployed, Rs. 1,365 cr planned from fresh issue proceeds and Rs. 1,700 cr will be debt from IREDA. Thus, company’s capacity will rise by 3x over the next 20 months.

 

Growing, but stands Lower in the Pecking Order

In line with massive domestic industry growth, Vikram’s FY25 module sales rose 87% YoY to 1.6 GW, but revenue grew by only 36% YoY to Rs. 3,423 cr, due to declining end-product prices. Lack of backward integration and lower capacity utilization (58% vis-à-vis 75% for Premier and 61% for Waaree) keeps Vikram’s EBITDA margin lower than peers, at only 14%, against 27% for Premier, 19% for Waaree and 44% for Websol. Thus, Vikram’s FY25 PAT was at Rs. 140 cr, leading to 4% net margin and EPS of Rs. 4.6.

Vikram’s debtors outstanding are over 4 months, against 1-1.5 months for peers, indication long cash conversion cycle. Lower operating margins, coupled with large credit periods keeps Vikram’s RoE at just 16.6%, against 27%+ for peers.

While company’s net debt has reduced to Rs. 41 cr now, the debt-funded capex will propel debt-equity ratio to about 0.5x going forward.

Thus, Vikram Solar stands the lowest in the pecking order, among peers Waaree Energies, Premier Energies and Websol, on most counts - capacity, integration level, utilisation, operating margin, working capital management and leverage.

 

Valued closer to Peers

M cap of Rs. 12,000 cr leads to an EV/EBITDA multiple of 16x and a PE multiple of nearly 40x, even after factoring in 40% EBITDA growth and 100% PAT growth in FY26E.

Largest listed integrated peer Waaree Energies, with 25 GW order book, is trading at an EV/EBITDA multiple of 14x, based on FY26E guidance of Rs. 5,500 cr to Rs. 6,000 cr guidance, and at a PE multiple of 38x.

Debt-free, integrated peer Premier Energies is trading at 19x EBITDA multiple and 40x PE for its superior operational performance, with 95% cell capacity utilization, 54% RoE and 27% EBITDA margin.

Even smaller, but integrated peer Websol, is trading at a PE multiple of 30x for higher margin.

ALMM II compliance will require mandatory domestic sourcing from June 2026, which will be an industry tailwind for all players. Growth of domestic Solar Energy sector is not disputed, but Vikram Solar’s IPO pricing discounts all positives upfront.

 

3x Valuation Surge in 15 months

In June 2024, company had raised Rs.704 cr from marquee UHNIs like Plutus Wealth, Haldirams family among others, at Rs. 122 per share. Current IPO price is at a 270% premium, in less than 15 months, which is unjustified, given FY25 PAT rose by a lower rate of 75% YoY.