Upcoming IPO: Vikram Solar Files DRHP With SEBI For Rs 1,500 Crore Public Issue; All You Need To Know

Vikram Solar Ltd has taken a step toward becoming a publicly listed entity by filing its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its upcoming Initial Public Offerings (IPOs). These IPOs are expected to attract strong investor interest given the companies' growth plans.

IPO Overview

Vikram Solar Ltd, headquartered near Kolkata, is India's largest producer of solar photovoltaic (PV) modules. Established in 2009, the company has grown its production capacity from an initial 12 MW to an impressive 3.50 GW as of its DRHP filing. According to a CRISIL analysis, Vikram Solar is recognized on the Ministry of New and Renewable Energy's Approved List of Module Manufacturers (ALMM), with 2.43 GW of non-captive capacity as of July 2024.

IPO Details and Objectives

The IPO will consist of fresh equity shares worth up to Rs 1,500 crore and an offer for sale (OFS) of up to 17.45 million equity shares by the promoter group. Each equity share carries a face value of Rs 10, and there will be a discounted provision for eligible employees participating in the employee subscription segment.

Vikram Solar may consider a "pre-IPO placement" by issuing securities worth up to Rs 300 crore in consultation with the book-running lead manager, which could result in a reduction in the size of the fresh issue.

Utilization of Funds

The proceeds from the fresh issuance are planned to be used for capital expenditure, manufacturing expansion, and general corporate purposes. Rs 793.36 crore will be invested through Vikram Solar's wholly-owned subsidiary, VSL Green Power Private Ltd, to establish a 3,000 MW solar cell and module manufacturing facility. Rs 602.95 crore will be used for expanding Vikram Solar's existing solar module manufacturing facility from 3,000 MW to 6,000 MW. The remaining funds will be allocated for various general corporate needs.

Key Players

Nuvama Wealth Management, among others, will handle the IPO. Link Intime India Private Ltd will be the official registrar for the IPO process.

The IPO of Vikram Solar represents an investment opportunity, given the company's leadership in solar energy. Vikram Solar's growth in solar manufacturing and Midwest's diversification into rare earth elements and mineral sands position them well for future expansion.