Vikram Solar, a prominent solar photovoltaic module manufacturer based in Kolkata, has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) as part of its plans to launch an Initial Public Offering (IPO). This move marks a significant milestone for the company as it seeks to raise capital through fresh shares worth up to Rs 1,500 crore, along with an offer for sale (OFS) of up to 17.45 million equity shares from its promoter group.

IPO Structure and Employee Benefits

The IPO will have a face value of Rs 10 per share, with provisions for employee participation. Eligible employees will have a reserved portion, along with a discount in the employee subscription category. Additionally, Vikram Solar may consider issuing securities worth up to Rs 300 crore through a pre-IPO placement, depending on market conditions. The IPO will follow a book-building process, with 50% of shares allocated to qualified institutional buyers, 15% to non-institutional investors, and 35% reserved for retail investors.

Capital Allocation from IPO Proceeds

A significant portion of the proceeds from the fresh issue—Rs 793.36 crore—will be directed toward capital expenditure, primarily through investments in its subsidiary, VSL Green Power Pvt Ltd. This funding will help establish a new 3,000 MW solar cell and module manufacturing facility. Additionally, Rs 602.95 crore is allocated for scaling up Vikram Solar’s current module manufacturing plant from 3,000 MW to 6,000 MW, alongside general corporate expenditures.

Journey from Humble Beginnings to a Solar Leader

Vikram Solar began its operations in 2009 with an initial capacity of just 12 MW. By the time of filing the DRHP, its production capacity had surged to 3.50 GW. The company is one of the largest non-captive manufacturers listed on the Ministry of New and Renewable Energy's Approved List of Module Manufacturers (ALMM), with 2.43 GW listed as of July 2024, according to a report by CRISIL.

Maintaining a Strong Market Position

Since 2014, Vikram Solar has been recognized as a Tier 1 solar module manufacturer by BloombergNEF, a status it continues to hold in 2024. With an order book totaling 8,214.63 MW as of the DRHP filing date, the company’s future prospects appear bright. Key projects in the pipeline include a 397.70 MW project from NTPC Renewable Energy and a major 1.00 GW order from a subsidiary of JSW Energy.

Impressive Financial Growth

In fiscal 2024, Vikram Solar posted revenues of Rs 2,510 crore, representing a growth of 21.11%. Meanwhile, the company's profit after tax saw an extraordinary rise of 450.10%. Nuvama Wealth Management, among others, will serve as the book-running lead managers for the IPO, while Link Intime India Private Limited has been appointed as the registrar.

Expansion Plans to Meet Rising Market Demand

To cater to the increasing demand for solar energy solutions, Vikram Solar is expanding its production capacity. By fiscal 2026, the company aims to scale up its capacity to 10.50 GW, with plans to further grow to 15.50 GW by fiscal 2027. This expansion includes a new 3.00 GW solar cell manufacturing facility in Tamil Nadu, marking a major leap forward in the company’s capabilities.

Global Reach and Strategic Partnerships

Vikram Solar operates across 23 states and three union territories in India, supported by a wide network of distributors, dealers, and system integrators. Internationally, the company has a sales office in the United States and a procurement office in China. As of March 31, 2024, its solar PV modules are supplied to 39 countries, solidifying its position as a global player in the renewable energy market.

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