In the world of finance and investment, one of the most anticipated events is the upcoming Initial Public Offerings (IPOs) from Vikram Solar Ltd and Midwest Ltd. Both companies have recently filed their draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to float their IPOs, drawing attention from investors and market analysts alike.
Vikram Solar Ltd IPO Overview
Vikram Solar Ltd, headquartered near Kolkata, is recognized as India’s leading producer of solar photovoltaic modules. Since its inception in 2009, the company has substantially expanded its production capacity from a modest 12 MW to an impressive 3.50 GW as of the latest reports. According to a CRISIL analysis, Vikram Solar is ranked among the top players in the industry, with 2.43 GW of capacity listed on the Ministry of New and Renewable Energy’s Approved List of Module Producers (ALMM) as of July 2024. This growth underscores the company’s pivotal role in promoting sustainable energy solutions.
IPO Details
Vikram Solar is aiming to raise ₹1,500 crore through the IPO, which will consist of fresh shares issuance complemented by an offer for sale of approximately 17.45 million equity shares by its promoter group. This strategic move is expected to enhance the company’s capital base for future initiatives.
Share Structure and Employee Engagement
The face value of each equity share in Vikram Solar’s IPO is set at ₹10. To encourage participation among its workforce, the company will offer discounts for eligible employees during the employee subscription segment. In addition, a “pre-IPO placement” worth up to ₹300 crore may also be considered, reflecting the company’s proactive approach to engage with investors.
Utilization of Funds
The proceeds from the new issuance will be allocated strategically: ₹793.36 crore will focus on capital expenditure directed towards establishing a comprehensive 3,000 MW solar cell and module manufacturing facility within its wholly owned subsidiary, VSL Green Power Private Ltd. Furthermore, ₹602.95 crore is earmarked for expanding the current solar module manufacturing facility from 3,000 MW to 6,000 MW, in addition to reserves for general corporate purposes. This planned expansion aligns with the broader target of enhancing solar energy production in India.
Management and Oversight
The IPO is being managed by a group of experienced book-running lead managers including Nuvama Wealth Management, indicating robust support for this offering. Link Intime India Private Ltd serves as the registrar, ensuring a smooth process for investors.
Midwest Ltd IPO Overview
Midwest Ltd, based in Hyderabad, is another company setting its sights on the public market. It specializes in the exploration, mining, processing, marketing, distribution, and export of natural stones, with a diverse portfolio that includes granite, heavy mineral sands, quartz extraction, and the processing of rare earth elements like titanium.
IPO Structure and Offer Details
For its IPO, Midwest proposes a combination of fresh shares worth up to ₹250 crore alongside an offer for sale (OFS) that could reach ₹400 crore from Promoter Selling Shareholders. This includes an estimated ₹360 crore from Kollareddy Rama Raghava Reddy and ₹40 crore from Guntaka Ravindra Reddy. Similar to Vikram Solar, there will be reservations for eligible employees, coupled with a discount for those participating in the employee segment.
Pre-IPO Considerations
Midwest Ltd is also looking at a potential ₹50 crore “pre-IPO placement” which, if executed, would adjust the size of the fresh issue. This flexibility may enhance investor confidence and interest during the subscription period.
Allocation of Proceeds
The net proceeds from Midwest’s IPO are planned for specific capital expenditures: ₹127.05 crore for Midwest Neostone Private Ltd, ₹25.75 crore for the acquisition of electric dump trucks, and ₹3.26 crore to integrate solar energy solutions at certain mining locations. Additionally, ₹53.80 crore will be designated for the pre-payment/re-payment of outstanding borrowings and other general corporate purposes. This comprehensive allocation aims to reinforce both operational capabilities and financial health.
Management and Advisory Team
Midwest Ltd’s IPO is being guided by a proficient team of book-running lead managers, including DAM Capital Advisors Ltd, Intensive Fiscal Services Private Ltd, and Motilal Oswal Investment Advisors Ltd. KFin Technologies Ltd will serve as the issue registrar, providing further assurance of a structured offering to potential investors.
Disclaimer: The insights and forecasts provided in this article represent the views of individual analysts and financial experts. As with any investment decision, it is advisable for investors to consult certified experts before proceeding.
