IPO closes on 23 Sep'25
Saatvik Green Energy Ltd
Minimum Investment
₹ 14,880 / 32 shares
Our Verdict:
Avoid
- Saatvik Green Energy Ltd (SGEL) has shown exceptional revenue and PAT growth over the last three years. Its solid order book, expanding margins and involvement in the expanding renewable energy sector strengthen its growth prospects.
- In terms of valuation, the IPO commands a Price-to-Earnings (PE) multiple of 24x based on FY25 earnings.
- SGEL plans to use part of the IPO proceeds to repay Rs 177 crore in outstanding borrowings of the company and its subsidiary. The funds will also be allocated to expanding its solar PV module manufacturing capacity to 7.8 GW with a new facility in Odisha by FY26 and setting up a 4.8 GW solar cell manufacturing facility in FY27.
- However, despite the aggressive expansion plans, we maintain a cautious stance on the IPO. Pure-play PV module manufacturers like SGEL have limited control over the solar value chain and are more exposed to margin volatility compared to vertically integrated players like Waaree Energies and Premier Energies, which have in-house solar cell production.
- Additionally, Indian Solar PV manufacturers currently operate at only ~50% of their capacity due to low demand from private Independent Power Producers (IPPs), raising the risk of market oversupply and intense price competition.
- Considering these factors, long-term investors should remain on the sidelines for now.
About the company
Founded in
29 May'15
Managing director
Manik Garg
- With an installed capacity of 3.8 GW, SGEL is one of India's largest manufacturers of solar PV modules. The company operates three module manufacturing units in Ambala, Haryana, covering over 724,000 square feet. It produces Mono PERC and N-Top Con solar modules, catering to residential, commercial and utility-scale projects.
- In addition to manufacturing, SGEL provides engineering, procurement and construction (EPC) services, along with operations and maintenance (O&M) solutions for both ground-mounted and rooftop solar projects.
STRENGTHS
- Robust Growth: SGEL has demonstrated exceptional growth from FY23 to FY25, achieving a compound annual growth rate (CAGR) of 88% in operating revenue, 285% in EBITDA and 571% in net profit.
- Impressive Return Metrics: SGEL boasts strong return ratios, with a Return on Equity (ROE) of 63.41%, reflecting substantial value creation for shareholders. Its Return on Capital Employed (ROCE) of 60.45% highlights efficient capital utilization.
- Margin Expansion: SGEL has consistently improved its margins, with the net margin increasing from 0.77% in FY23 to 9.76% in FY25 and EBITDA margin expanding from 3.92% to 16.40%, demonstrating effective cost control and operational efficiency.
- Strong Order Book: As of March 31, 2025, SGEL’s Order Book stood at Rs 5,076.85 crore, which provides robust revenue visibility for the medium term.
- Diversified Customer Base: SGEL has successfully established long-term relationships with a diversified set of customers both globally and within India. It serves industries such as manufacturing, automobile, cement, real estate, steel, energy, telecommunications and infrastructure. Over the past two years, its customer base has grown at a remarkable CAGR of 43%, reflecting the company’s expanding market reach and ability to cater to a broad spectrum of industries.
- Capacity Utilization: In FY25, SGEL achieved an impressive capacity utilization rate of 84%, reflecting its operational efficiency. Between FY23 and FY25, its solar module production volumes surged nearly six-fold to 1.46 GW, supported by domestic demand and favourable government policies.
RISK FACTORS
- Client Concentration: A significant portion of SGEL’s revenue is concentrated among a few key clients. In FY25, nearly 17% of the operating revenue came from the top customer and 44% from the top 5 customers. Any disruptions in relationships with these clients could materially affect financial performance.
- Dependency on Imports: SGEL’s manufacturing operations rely heavily on imported materials and equipment. In FY25, approximately 42.24% of the materials used in module production, including solar cells and aluminum frames, were sourced from China.
- Rising Trade Receivables: SGEL’s trade receivables have grown significantly, from Rs 20.92 crore in FY23 to Rs 399.51 crore in FY25. Inefficiencies in collecting receivables or payment defaults could adversely affect cash flow, disrupt business operations and weaken overall financial stability.
- Contingent Liabilities: As of March 31, 2025, SGEL’s contingent liabilities stand at Rs 626.8 crore. If these liabilities materialize, they could adversely impact the company’s operations, cash flow and financial condition.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 900 crore
Fresh Issue
₹ 700 crore
OFS
₹ 200 crore
Price range
₹ 442 - 465
Lot size
32 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
- Prepayment or scheduled repayment of certain outstanding borrowings availed by the Company and its subsidiary;
- Establishment of a 4 GW solar PV module manufacturing facility in Odisha; and
- General corporate purposes.
Dates
Bidding open
19 Sep'25
Bidding close
23 Sep'25
Allotment date
24 Sep'25
Refund date
25 Sep'25
Listing
26 Sep'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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