Vikram Solar IPO: Betting on India’s Solar Future or Paying a Premium for Growth?

About the Issue:
Vikram Solar Ltd is preparing to launch its Initial Public Offering (IPO) for equity shares. See the issue details below.

Objects of the Issue:
The objectives of the company are to partially fund the capital expenditure for the Phase-I Project, fund the capital expenditure for the Phase-II Project, and utilise the remaining proceeds for general corporate purposes. The company intends to allocate approximately Rs 769.73 crore for Phase-I and Rs 595.21 crore for Phase-II from the net proceeds of the issue.

Promoter Holding:
The promoters of Vikram Solar are Gyanesh Chaudhary, Gyanesh Chaudhary Family Trust, and Vikram Capital Management Private Limited. The promoter shareholding in the company stands at 77.64 per cent before the issue and is expected to reduce to 63.11 per cent after the issue.

Company Profile:
Vikram Solar Limited is one of India’s largest solar photovoltaic (PV) module manufacturers, with over 17 years of industry experience. As of the Red Herring Prospectus date, the company operates two state-of-the-art manufacturing facilities in West Bengal and Tamil Nadu, with a combined installed capacity of 4.50 GW. It is listed on the Ministry of New & Renewable Energy’s Approved List of Modules and Manufacturers (ALMM) with a capacity of 2.85 GW as of June 30, 2025.
Incorporated on December 2, 2005, as International Leather Clothiers Private Limited, the company shifted its focus from clothing to renewable energy in 2008, adopting the name Vikram Solar Private Limited and aligning with the Vikram Group. It became a public limited company in 2017. Its core offerings include solar PV module manufacturing, as well as Engineering, Procurement, and Construction (EPC) and Operations & Maintenance (O&M) services. Vikram Solar has a global footprint, with offices in the United States and China, and has supplied modules to 39 countries, shipping over 7.12 GW as of March 31, 2025. 

Financials 

Total Income increased from Rs 2,091.91 crore in FY23 to Rs 3,459.53 crore in FY25, marking a growth of 37.09 per cent in FY25 over FY24 and 65.41 per cent over two years, indicating strong sales momentum. EBITDA increased from Rs 186.18 crore in FY23 to Rs 492.01 crore in FY25, reflecting growth of 23.41 per cent in FY25 and 164.23 per cent over FY23, suggesting better margins and cost control. Profit After Tax (PAT) increased from Rs 14.49 crore in FY23 to Rs 139.83 crore in FY25 — a rise of 75.33 per cent in FY25 and 865.27 per cent over FY23, showing a sharp improvement in operational efficiency and profitability.
The company has shown a strong performance improvement over the last three years, with significant growth in key financial parameters. Total Assets increased from Rs 2,476.29 crore in FY23 to Rs 2,832.15 crore in FY25 — an increase of 9.54 per cent from FY24 and 14.37 per cent over FY23, reflecting capacity expansion or higher asset utilisation. The company’s Net Worth turned positive from a negative Rs 0.08 crore in FY23 to Rs 0.86 crore in FY25, and Reserves & Surplus increased from Rs 113.07 crore to Rs 932.6 crore, highlighting a strong recovery in shareholder value and retained earnings. Overall, the figures indicate a remarkable turnaround, with robust revenue growth, margin expansion, and strengthening of the balance sheet.

Valuation & Returns 

The company's upcoming IPO is priced at a premium compared to its listed peers, with an estimated P/E of around 85.88 times (based on FY25 earnings and the upper band of the post-IPO price), against the 40–47 range of companies like Waaree Energies, Premier Energies, and Websol Energy. While peers enjoy stronger return ratios—Websol’s RoNW at 55.65 per cent and Premier Energies at 33.21 per cent—Vikram’s RoNW stands at 11.26 per cent, indicating room for operational efficiency improvement. The higher valuation may be driven by its rapid financial growth, with revenue rising from Rs 2,524 crore in FY24 to Rs 3,459 crore in FY25 and PAT nearly doubling to Rs 139.83 crore in the same period. The company’s large-scale expansion plans, including capacity upgrades and new facilities, also support a growth narrative that investors may be willing to pay a premium for.

Outlook:
The company's outlook remains highly promising, driven by aggressive expansion, diversification, and strong market positioning. The company is scaling up its installed solar module capacity from 4.50 GW to 15.50 GW by FY26 and 20.50 GW by FY27, alongside backward integration with a 3.00 GW solar cell facility in Tamil Nadu. This strategy will strengthen cost efficiency and quality control, supported by IPO proceeds earmarked for expansion. Diversification into Battery Energy Storage Systems (BESS) with a planned 1.00 GWh facility (expandable to 5.00 GWh) further positions Vikram Solar as a leading player in renewable energy and storage solutions.
The company benefits from robust order book visibility, growing from 2.78 GW in FY23 to 10.34 GW in FY25, ensuring revenue stability and margin protection. Its focus on high-efficiency N-type and HJT modules, coupled with strong R&D, enhances competitiveness in the evolving solar market. Financially, Vikram Solar has delivered consistent growth, with revenues and profitability improving at healthy CAGRs, while expanding its domestic distributor base and international presence across 39 countries. Backed by an experienced management team and ESG commitments, the company is well-placed to capture India’s renewable energy growth, though risks of raw material dependence and execution challenges remain.
Vikram Solar has strong long-term potential with its expansion and diversification plans in renewable energy. But for short-term investors, the IPO looks risky due to high valuation and lower returns ratios compared to peers, which may limit listing gains.