Solarworld Energy Solutions, a leader in solar energy solutions, has recently filed its Draft Red Herring Prospectus (DRHP) with SEBI. It aims to raise ₹600 crore via an initial public offering (IPO). This move positions Solarworld among the growing number of renewable energy companies opting to invest in IPO options to fuel their growth.
IPO structure details
The IPO comprises a fresh issuance of equity shares worth ₹550 crore and an offer-for-sale (OFS) of shares worth ₹50 crore by its promoter, Pioneer Facor IT Infradevelopers. This mix allows Solarworld to both raise new capital and allow the promoter to partially cash in their equity. Additionally, the company may raise ₹110 crore via a pre-IPO placement, which would reduce the fresh issue size if successful.
Fund allocation and usage
Of the ₹550 crore raised from the fresh issue, ₹420 crore will be invested in Solarworld's subsidiary, Kartik Solarworld, to finance the construction of a 1.2 GW solar photovoltaic (PV) TopCon Cell manufacturing facility in Pandhurana, Madhya Pradesh. The remaining funds will be utilised for general corporate purposes.
Investors looking to invest in IPO opportunities in the renewable energy sector will find Solarworld’s strategic investment in manufacturing appealing. By expanding its capabilities through backward integration, Solarworld aims to strengthen its position in the solar energy market.
Solarworld's operational strength
Solarworld offers energy solutions under two key models: capital expenditure (CAPEX) and renewable energy service company (RESCO). Its offerings also include operations and maintenance (O&M) services. A majority of Solarworld's completed projects come bundled with O&M services, highlighting its commitment to long-term service provision.
As of August 2024, Solarworld had completed projects totalling 253.67 MW AC (336.17 MW DC) and had ongoing projects with a capacity of 420 MW AC (592 MW DC). The company's order book stood at ₹799.7 crore, with key clients such as SJVN Green Energy, Haldiram Snacks, and Ethnic Food Manufacturing.
Should you invest in Solarworld's IPO?
Solarworld's strong financial performance bolsters its IPO prospects. In FY24, the company posted a 248.4% increase in net profit, reaching ₹51.7 crore, and revenue growth of 115.5% to ₹501 crore. For those looking to invest in IPO options with a robust growth trajectory, Solarworld presents an exciting opportunity, especially given the forecasted solar capacity additions of 180-185 GW between FY25 and FY29.
Invest safely
Solarworld Energy Solutions’ upcoming IPO represents a significant opportunity for investors to capitalise on the rapidly growing solar energy sector. With ₹600 crore on the line, of which ₹550 crore will be fresh equity, this IPO aims to fuel future growth. Investors keen to invest in IPO options within renewable energy should keep an eye on Solarworld's offering, as it combines a healthy financial track record with a clear strategic vision for expansion.
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