- Our view
- Subscribe
- Market cap then
- ~INR 398.23 Cr.
- Price band
- INR 181 to 191 per share
Solarium Green Energy Ltd provides turnkey solar EPC and O&M services alongside solar product sales. Minerva Capital Research Solutions recommends Subscribe to its IPO, citing the company’s execution record, improving margins and solar-sector tailwinds; the report notes an implied market capitalisation of ~INR 398.23 Cr.
About Solarium Green Energy
Incorporated in Dec’15 in Ahmedabad, Gujarat, Solarium Green Energy was promoted by Ankit Garg and Pankaj Vallabhbhai Gothi. The company moved from manufacturing solar PV panels to turnkey solar solutions, providing EPC and O&M services for residential rooftop, Commercial & Industrial (C&I), ground-mounted and Government projects. It also sells solar PV modules, PV inverters and availability-based tariff meters to B2B clients. Its installed polycrystalline solar panel manufacturing capacity of 70 MW was shut down in Feb’24 and the facility is now used as a master warehouse.
Solarium Green Energy IPO Details
| Particulars | Details |
|---|---|
| Price Band (INR) | 181 to 191 |
| Face Value (INR) | 10 |
| Implied M.Cap (INR Cr.) | 398.23 |
| Exchange | BSE SME |
| Minimum Lot Size (Retail | HNI) | 600 | 1,200 |
| Issue Opens on | 06-Feb-2025 |
| Issue Closes on | 10-Feb-2025 |
| Fresh Issue of Shares (#) | 5,499,600 |
| Offer for Sale (#) | 0 |
| Funds Mobilized (INR Cr.) – Fresh Issue of Shares | 105.04 |
| Objects of Issue (INR Cr.) – Funding of Working Capital Requirement | 71.00 |
| Objects of Issue (INR Cr.) – Funding of general corporate purposes | [●] |
| Objects of Issue (INR Cr.) – Funding of issue related expenses | [●] |
The IPO reservation is QIB shares offered <=50%, Retail shares offered >=35%, and NII (HNI) shares offered >=15%.
Strengths
- Management and execution record: The company has shifted from manufacturing to EPC and expanded into newer geographies. From FY22 to H1-FY25, it commissioned 11,195 residential rooftop projects, 172 C&I projects and 17 Government projects.
- Order book and bids: The un-executed order book for C&I and Government projects was ~INR 140 Cr. as on 31-Dec’24. The company had also submitted bids for Government projects worth INR 825 Cr. and was L1 in projects worth INR 60 Cr. for which a Letter of Award was awaited.
- Residential work under execution: ~2,221 residential rooftop solar projects were also under execution as on Sep’24.
- Solar-sector support: PM Surya Ghar: Muft Bijli Yojana targets rooftop solar power for 1 Cr. households by March’27, with a scheme outlay of INR 75,021 Cr.
- Broader solar offerings: The company provides solutions across rooftop solar, ground-mounted projects, solar trees, car ports, solar-wind hybrid projects and energy storage systems.
Business Mix
The report notes that product sales declined after the company closed its 70 MW polycrystalline solar panel manufacturing capacity. Residential rooftop work accounted for 51.1% of revenue in 6M-FY25, while Government projects contributed 25.2%.
| Particulars | FY22 | FY23 | FY24 | 6M-FY25 |
|---|---|---|---|---|
| Residential Rooftop | 25 | 31 | 40 | 42 |
| C&I and ground mounted | 27 | 7 | 7 | 10 |
| Government Projects | - | 5 | 59 | 21 |
| Product sales | 116 | 56 | 71 | 10 |
| Total Revenue | 167 | 99 | 177 | 82 |
Solarium Green Energy Key Financials
| Particulars (INR Cr.) | FY22 | FY23 | FY24 | 6M-FY25 |
|---|---|---|---|---|
| Revenue | 167 | 99 | 177 | 82 |
| Gross Margin % | 14.9% | 20.3% | 26.7% | 37.8% |
| EBITDA % | 2.8% | 6.0% | 13.6% | 14.4% |
| PAT % | 1.2% | 1.8% | 8.8% | 9.2% |
| Debt (Short+Long) | 15 | 27 | 31 | 33 |
| Equity | 3 | 5 | 20 | 33 |
| Debt/Equity | 4.93x | 5.64x | 1.51x | 1.01x |
| NWC | 5 | 11 | 41 | 50 |
| NWC (days) | 11 | 40 | 85 | 111 |
| ROE % | 45.3% | 44.9% | 124.4% | 28.3% |
| ROCE % | 19.1% | 15.9% | 54.2% | 18.7% |
NWC includes Inventory, Receivables & Payables; & NWC days is computed as % of rev.
Revenue increased from 99 in FY23 to 177 in FY24, while EBITDA % rose from 6.0% to 13.6%. The report notes that sustaining improved margins while managing working capital will be a key monitorable.
IPO Valuation and Our View
At the implied market capitalisation, the issue is valued at P/E ratios of 25.54x on FY24 PAT and 26.36x on FY25 PAT (annualized H1-FY25). Citing the management team, project execution record and solar-sector tailwind, Minerva Capital Research Solutions recommends Subscribe to the issue.
- INR 181 to 191
- IPO price band per share
- ~INR 398.23 Cr.
- Implied market capitalisation
- Subscribe
- Recommendation
Key Risks
- Policy and regulation: A change in the policy or regulatory framework currently incentivizing solar power adoption could affect the business.
- Working capital: Operations are working-capital intensive, particularly as the company expands for higher Government projects.
- Input prices: Price fluctuations in solar PV panels and inverters could lead to lower margins.
Management
Ankit Garg is Chairman & Managing Director and Pankaj Vallabhbhai Gothi is Whole-time Director. The report describes their experience in sales, marketing and business development in the solar and construction equipment industries as more than 12 years and more than 9 years, respectively. The company’s employee count increased from 86 in FY22 to 253 as on 30-Sept’24.
Our View
The report’s Subscribe view rests on Solarium Green Energy’s project execution record, improved margins following its move to EPC and the solar-sector tailwind. Order conversion, margin sustainability and working-capital needs remain important monitorables, alongside the stated risks from policy changes and input-price movements.
Standard disclosures
- Research Analyst has served as an officer, director or employee of subject company(ies): No
- We or our associates have received compensation from the subject company(ies) in the past 12 months: No
- We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past12 months: No
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- We or our associates or Research Analyst or his/her relative's financial interest in the subject company(ies)- No
- Nature of financial interest in subject company, if any –Nil
- We, our associates or Research Analyst have actual/beneficial ownership of 1% or more securities of the subject company (ies) at the end of the month immediately preceding the date of publication of Research Report – No
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Regulatory disclosures
Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).
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Rating rationale
Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.
- Buy:> 15%
- Hold: -5% to 15%
- Reduce: -15% to -5%
- Sell: <-15%