Vikram Solar IPO opens for subscription; GMP at 16%. Should you apply?

Vikram Solar’s Rs 2,079-crore IPO opened for subscription on Tuesday and will close on Thursday. The issue consists of a fresh share sale worth Rs 1,500 crore and an offer for sale (OFS) of Rs 579 crore. In the grey market, the stock is commanding a premium of around 16% over the issue price, signaling strong investor interest ahead of listing.

The price band has been fixed at Rs 315–332 per share, with a lot size of 45 shares. At the upper end of the price band, the company is expected to raise about Rs 2,079 crore.

Post issue, Vikram Solar’s market capitalisation will be in the range of Rs 11,471–12,009 crore. The company’s shares are proposed to be listed on both BSE and NSE.

Of the net issue, 50% has been reserved for Qualified Institutional Buyers (QIBs), 35% for retail investors, and 15% for Non-Institutional Investors (NIIs).

Company overview

Vikram Solar is one of India’s largest solar PV module manufacturers with 4.5 GW of installed capacity. It has shipped over 7 GW globally across 39 countries and counts NTPC, Adani Green, JSW Energy, Azure Power and ACME among its marquee clients.

The company is expanding aggressively with plans to scale capacity to 15.5 GW by FY26 and 20.5 GW by FY27. It is also diversifying into solar cell manufacturing and battery energy storage systems (BESS).

In FY25, Vikram Solar reported revenue from operations of Rs 3,423 crore, EBITDA of Rs 492 crore, and adjusted PAT of Rs 140 crore. Revenue has grown at a 29% CAGR over FY23–25, while EBITDA and PAT have expanded at 63% and 211% CAGRs, respectively.

Should you subscribe?

SBI Securities has recommended investors to subscribe to the issue. The brokerage notes that while Vikram Solar’s margins are currently lower than peers due to limited exports and lack of backward integration, expansion into solar cell manufacturing from FY27 is expected to lift profitability.

At the upper price band of Rs 332, the stock is valued at 85.9x FY25 earnings and 21.4x EV/EBITDA, which is in line with listed peers on an EV/EBITDA basis.

The brokerage highlights robust domestic demand from government schemes such as PM Surya Ghar Muft Bijli Yojana, PM Kusum, as well as utility-scale and C&I solar capacity additions, as key growth drivers.

JM Financial, Nuvama Wealth Management, UBS Securities India, Equirus Capital and PhillipCapital India are the book-running lead managers, while MUFG Intime India is the registrar to the issue.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)