Vikram Solar IPO Date 2025: What You Need to Know

The company has demonstrated good topline growth, and its income from operations has grown from ₹2,073.23 crore in FY23 to ₹2,510.99 crore in FY24 and again to ₹3,423 crore in FY25. This growth trend shows a continued robust demand for its products and services in the open market.

Some very interesting developments consistently on the bottom line. The company went from a net loss of ₹629.4 million in FY22 to a net profit of FY144.91 million in FY23 to a net profit of FY793.2 million in FY24. The company was still profitable in FY25 with a net profit of ₹139.83 crore. This was made possible based on a dramatic improvement in margin from an EBITDA margin that improved from 8.98% in FY23 to 15.87% in FY24.

A more careful examination of the FY25 data shows that the EBITDA margin is moderating to 14.37%; this is not a sign of operational weakness, rather it is a direct outcome of the recent strategic repositioning from the export market, which has much higher margins available. International markets, and more specifically the US market, have historically provided a margin per watt in the region of 10 – 15% higher than the domestic market for all sales. The deterioration in export revenue has been stark; it fell from 61.58% of total revenue in FY24 to 1.00% in FY25. The strategic pivot to domestic sales was necessitated by the rising geopolitical risks and trade tariffs. The EBITDA margin compression is a direct and reasonable outcome of this change in the revenue composition.

Table: Consolidated Financials (₹ in million)

Key Financial Ratios

The balance sheet of the business reflects an improved financial health. The Debt/Equity ratio has improved from 2.00x to 1.81x over the past 2 years, indicating a gradual derisking of the balance sheet. The IPO proceeds are expected to add a significant capital contribution, which will bolster financial standing and provide the necessary cash flow required to pursue expansion without substantially becoming indebted.

A notable point of concern is the company’s working capital intensity. It has high debtor days of 172 days and an increase in working capital days from 42.1 days to 64.0 days. This high intensity is common in the EPC and export business models due to extended credit terms. The proceeds from the fresh issue will be crucial for managing this intensity and ensuring liquidity for operations.

Comparative Valuation and Critical Assessment

Table: Peer Valuation Comparison

The valuation premium indicated by the market is a direct result of a high-growth premium. The valuation the market has assigned to the company does not stem from its past or current performance but from its potential for hyper-growth in the future. This is a fairly common occurrence for a company that is going through a structural change. The company is important to note has just switched from having a precedent net loss in its income statement to a profitable one with aggressive capital expenditures on its plans to grow and become a global leader. Based on the company’s extreme changes in structure and plans to grow, capital was infused to allow the market to project that valuation premium, hoping that the structural changes and growth plan would validate that valuation as the new capacities come online and backward integration drives the margin profile.

Industry Setting and Basic Positioning

Indian Sun-based Vitality Advertise Outlook

The Indian solar power industry is on a solid growth trajectory supported by the country’s rising energy demand and a significant move toward renewable energy. The showcase is anticipated to enroll a CAGR of 19.8% during the period. India’s driven target of accomplishing 500 GW of non-fossil energy capacity by 2030, which is entirely up from the current installed capacity of 66.70 GW (as of February 2023), positions the fragment as a key development motor for the economy. Specifically, the sun-powered PV section is anticipated to rule the showcase, driven by falling module costs and large-scale utility ventures.

The Role of Government Policies

The Indian government has created a highly supportive policy environment that provides a strategic advantage for domestic manufacturers.

• The Approved List of Models and Manufacturers (ALMM): This framework is a critical regulatory instrument that creates a “captive market” for domestically manufactured modules. It mandates that government-backed and utility-scale projects must procure modules exclusively from this approved list. Vikram Solar has one of the largest enlisted capacities on the ALMM at 2.85 GW. 

• Production Linked Incentive (PLI) Scheme: The PLI scheme offers a performance-linked mechanism that rewards actual production, not just capacity creation, and promotes operational efficiency and domestic value addition. Vikram Solar’s Phase-I project has received a PLI award – the PLI is directly tied to vertically integrated manufacturing with production ramp-up.
• Basic Customs Duty (BCD): The government has provided an effective barrier to cheaper imports from countries such as China by imposing a 40% BCD for imported solar modules and a 25% BCD for solar cells. The BCD directly improves the cost competitiveness of Indian manufacturers and serves as a key driver for import substitution.

The interaction of the ALMM, PLI, and BCD creates a powerful “strategic moat” for Vikram Solar. The combination of these policies meaningfullyde-risksk Vikram Solar’s domestic growth by providing a protectedhigh-demandnd market. This policy-driven environment is a significant offset to the company’s geographic and trade risk exposure in the international market.

Key Risks and Mitigants

Geopolitical and Trade Risk

Vikram Solar’s reliance on the US market for its export revenues represents a sizeable geopolitical risk. Exports represented 61.58% of Vikram Solar’s revenues in FY24, with 99.22% of that revenue going to US dollar-denominated markets. The recent tariff regime in the US, whereby Indian imports are subject to a combined 50% general duty, along with the anti-dumping investigation, represents a tangible and serious risk to the company’s profitability. This risk is no longer theoretical as the company’s export revenue dropped meaningfully to just 1.00% in FY25, as sourced from this trade pressure.

The Company’s first response is an immediate tactical pivot towards its domestic market, which is less volatile and insulated. The Company will see some evidence of this change in the mix of revenues in FY25. The long-term mitigation strategy includes a large backward integration strategy to design and commence construction of a solar cell manufacturing factory that will reduce or replace the Company’s sourcing of imported raw materials from China, East Asia, and Southeast Asia, accounting for greater than 80% of their imported raw material costs in FY25. The strategic intention is to create a more resilient and self-sustaining supply chain.

Operational and Execution Risks

The plan to expand manufacturing capacity from 4.50 GW to 20.50 GW by FY27 is very ambitious and therefore exposes the firm to considerable execution risk. The firm needs to execute on the potential for delays and/or cost overruns, and also issue enough product to meet market demand for such a significant increase in capacity. The proceeds from the IPO are specifically meant to reduce the financial burden of the expansion and provide the cash flows required for the Phase I and Phase II projects.

The company also faces challenges with its high working capital intensity. This is a common characteristic of businesses with large EPC contracts and export sales, which often involve extended credit terms and long receivable cycles. The company’s high debtor days of 172 days underscore this risk, which requires careful management and will be partially addressed by the capital raised from the fresh issue.

Customer and Revenue Concentration Risks

The business has a significant amount of customer concentration risk. The top five customers contributed to 77.50% of the company’s revenue in FY25, while the top ten accounted for 88.72%. The loss of a major client or a substantial decline in ordering activity from a primary client would have an outsized impact on the company’s ability to financially perform. Customer concentration risk is inherent to large-scale utility and EPC projects that have historically driven the business.

Table: Revenue Concentration (FY23-FY25)

Investment Rationale and Conclusion

A Synthesis of Investment Drivers

The rationale for investing in the Vikram Solar IPO is twofold. First and foremost, the operational and financial turnaround has been a remarkable journey from losses to a sustainably profitable business with growth in topline sales. This indicates that management has performed well and/or the company is now a more relevant player in its market.

Secondly, Vikram’s growth strategy is aggressive and explicit, providing a unique market opportunity within India’s energy transition. There are planned ramp-ups to 20.50 GW capacity in FY27 and retrofitting its gas turbine power plants to facilitate integrated solar cell manufacture, but both these strategies are driven by market need and geopolitical weakness. A successful outcome of Vikram Solar will drastically change the company in terms of scale and profitability.

Thirdly, there is a very strong domestic policy environment that Vikram is benefiting from. The combination of ALMM, PLI, and BCDise creates a protected domestic market, which translates to reliable, predictable, and consistent revenues. This is fundamental to the investment in Vikram Solar, as there is so much volatility in international export markets. This Thispolicy-drivenn moat has taken away a significant amount of geopolitical risk already from Vikram’s export business.

Final Recommendation

Based on a comprehensive analysis, the Vikram Solar IPO, while appearing “exorbitantly priced” on traditional valuation metrics, presents a compelling long-term investment opportunity. The high valuation is a premium assigned to the company’s potential for future growth, which is anchored in its strategic capacity expansion, backward integration, and a strongly supportive domestic policy environment.

The IPO is appropriate for well-informed and cash-rich investors with an investment horizon of at least three years. These investors should reflect on the company’s fundamental change and the degree to which it resonates with India’s long-term energy narrative, which offers a compelling growth narrative beyond valuations in the near term. The execution risk, working capital requirement, and customer concentration can be managed in terms of the proceeds of the IPO and the…”