IPO closes on 25 Sep'25
Solarworld Energy Solutions Ltd
Minimum Investment
₹ 14,742 / 42 shares
Subscribe for listing gains
- Solarworld Energy Solutions Ltd (SESL) has exhibited impressive revenue and PAT growth over the last three years. Its strong order book, improving margins and strategic positioning within the growing solar sector bolster its growth potential.
- A key transformative aspect of SESL’s business model is its shift into solar cell manufacturing. Approximately Rs 420 crore of the IPO proceeds will be allocated to establishing a 1.2 GW TopCon solar PV cell plant in Madhya Pradesh, through a subsidiary. This move promises backward integration, reducing reliance on external suppliers and boosting profitability, as cell manufacturing offers higher margins compared to EPC contracting. If executed well, this vertical could emerge as a high-margin growth engine, enabling SESL to evolve into a comprehensive solar solutions provider.
- However, the company's success will largely depend on how effectively it allocates these funds across various verticals, which will be a key factor to monitor.
- On the valuation front, the IPO is priced at a Price-to-Earnings (PE) multiple of 33x based on FY25 earnings, which is below the industry average.
- With fair valuations, strong sectoral tailwinds and SESL’s ambitious growth initiatives, investors may consider subscribing for potential listing gains. However, a longer-term investment stance should be approached with caution until the company proves consistent execution across its new verticals.
About the company
Founded in
17 Jul'13
Managing director
Kartik Teltia
- SESL is a rapidly growing player in India’s solar EPC and module manufacturing sectors. It offers integrated solutions across EPC, project development, operation and maintenance (O&M) and energy storage, catering to PSUs, corporate entities and industrial clients.
- SESL operates under two business models: the Capital Expenditure (CAPEX) model, which involves customer-owned projects and the Renewable Energy Services Company (RESCO) model, where the company owns the projects and sells power through Power Purchase Agreements (PPAs). This dual-model approach provides flexibility to its customers.
- As of July 2025, SESL has successfully completed 46 projects with a combined capacity of 254 MW. Its prominent clients include SJVN, Haldiram Snacks, Gujarat Urja Vikas Nigam, etc.
STRENGTHS
- Robust Growth: SESL has recorded exceptional growth from FY23 to FY25, achieving a 53% CAGR in operating revenue, 116% in EBITDA and 128% in net profit.
- Healthy Return Metrics: SESL delivers strong return ratios, with a Return on Equity (ROE) of 40.27%, reflecting substantial value creation for shareholders. Its Return on Capital Employed (ROCE) of 54.53% highlights efficient capital utilization.
- Margin Expansion: SESL has consistently expanded its margins, with the net margin increasing from 6.38% in FY23 to 14.14% in FY25 and the EBITDA margin growing from 9.84% to 19.60%, reflecting effective cost control and operational efficiency.
- Strong Order Book: As of July 2025, SESL’s order book stands at Rs 2,527.81 crore, ensuring robust revenue visibility for the medium term.
- Improved Leverage: The Debt-to-Equity ratio has steadily decreased from 2.95 in FY23 to 0.37 in FY25, reflecting solid financial management.
RISK FACTORS
- Client Concentration: SESL derives a substantial portion of its operating revenue from a small group of clients. In FY25, the top 5 clients contributed 97.96% of the operating revenue, with the largest client accounting for 79.19%. A loss or reduction in business from any of these key clients could have a significant adverse impact on the company’s financial performance.
- Geographic Concentration: As of July 31, 2025, 42 out of 46 completed projects were concentrated in states like Uttar Pradesh, Telangana, Maharashtra, Rajasthan, Haryana and Delhi. Additionally, in FY24 and FY23, 99.41% and 99.35% of SESL’s revenue came from EPC and O&M services in Uttar Pradesh. Any adverse changes in economic conditions or regulatory shifts in these regions could negatively affect the firm’s business and financial performance.
- Rising Trade Receivables: SESL’s trade receivables have grown substantially, from Rs 20.52 crore in FY23 to Rs 144.25 crore in FY25. Any inefficiencies in collecting receivables or defaults in payments could harm cash flow, disrupt operations, and erode financial stability.
- High Attrition Rate: With an attrition rate of 34% in FY25, SESL faces challenges in retaining talent. High employee turnover could disrupt operations, affect productivity and hinder the company’s long-term growth potential.
- Intense Competition: The solar sector is crowded with established players like Waaree Renewable and KPI Green, posing pricing and margin pressures.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 490 crore
Fresh Issue
₹ 440 crore
OFS
₹ 50 crore
Price range
₹ 333 - 351
Lot size
42 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
- Part-financing the establishment of a 1.2 GW solar PV TopCon Cell manufacturing facility in Madhya Pradesh; and
- General corporate purposes.
Dates
Bidding open
23 Sep'25
Bidding close
25 Sep'25
Allotment date
26 Sep'25
Refund date
29 Sep'25
Listing
30 Sep'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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