Solarworld Energy Solutions files draft papers with SEBI to raise ₹600 crore via IPO

Solarworld Energy Solutions, a provider of solar energy solutions, has submitted preliminary documents to SEBI on September 29 to raise ₹600 crore through an initial public offering (IPO). The IPO includes a fresh equity share issuance worth ₹550 crore and an offer-for-sale of shares valued at ₹50 crore by the promoter, Pioneer Facor IT Infradevelopers. The company’s promoters hold an 82.15% stake, while public shareholders, including Value Quest Scale Fund, own the remaining 17.85%.

Based in Uttar Pradesh, Solarworld Energy specializes in engineering, procurement, and construction (EPC) services for solar power projects. The company may also secure an additional ₹110 crore via a preferential issue or another method prior to filing the Red Herring Prospectus with the Registrar of Companies. If this pre-IPO placement is successful, the amount raised will be subtracted from the fresh issue.

The firm plans to use ₹420 crore of the fresh issue proceeds to invest in its subsidiary, Kartik Solarworld, to partially fund the construction of a 1.2 GW solar PV TopCon Cell manufacturing facility in Pandhurana, Madhya Pradesh. The remaining funds will go towards general corporate purposes.

Solarworld Energy operates under two models: the capital expenditure (CAPEX) model and the renewable energy service company (RESCO) model, offering operations and maintenance (O&M) services as part of both. By August 2024, around 95% of the company's EPC projects included bundled O&M services, typically for two to five years. The company has completed projects with a total capacity of 253.67 MW AC (or 336.17 MW DC) and is working on projects totaling 420 MW AC (or 592 MW DC). As of August 2024, its order book stood at ₹799.7 crore, with notable clients such as SJVN Green Energy, Haldiram Snacks, Ethnic Food Manufacturing, and Samiksha Solarworld.

Additionally, in May 2024, Solarworld entered into an equity cooperation agreement with ZNSHINE PV-Tech Co Ltd, a Bloomberg NEF tier-1 supplier from China, to establish a solar panel manufacturing facility. This partnership aims to integrate backward into the company’s services by utilizing in-house components. Over FY25 to FY29, it is expected that 180-185 GW of solar capacity will be added.

Competing with listed companies such as Sterling & Wilson Renewable Energy, Waaree Renewable Technologies, KPI Green Energy, Gensol Engineering, and Oriana Power, Solarworld has shown strong financial growth. The company's net profit surged by 248.4% to ₹51.7 crore in FY24, while revenue grew by 115.5% to ₹501 crore over the previous fiscal. Nuvama Wealth Management and SBI Capital Markets have been appointed as the merchant bankers for the issue.

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