Five Reasons Why Top Brokerages Are Saying ‘Avoid’ For Clean Max IPO

Last Updated on February 24, 2026 by Rajat Bhati

India’s renewable energy sector remains a key focus of the stock market. The government has set a lofty target of achieving 500 GW of non-fossil fuel capacity by 2030, leading to widespread fanfare for every new IPO in this sector. Clean Max Enviro Energy Solutions became the latest entrant in this sector. This IPO has received a lukewarm response from brokerages.

Being India’s largest commercial and industrial (C&I) renewable energy provider with a portfolio of 2.80 GW, the company also boasts major clients like Amazon, Google, and Apple. However, brokerage sentiment regarding the IPO remains largely unchanged, and investors are advised to remain cautious. Major firms like ICICI Securities, Samco Securities, GEPL Capital, and SMC Global have expressed significant concerns, with some even issuing outright “avoid” ratings.

To succeed in the stock market, we need to look beyond the “green” branding and carefully analyze a company’s numbers. Here are the Clean Max IPO broker recommendations suggesting this IPO is a high-risk proposition for retail investors.

Clean Max IPO Snapshot

Clean Max IPO Red Flag #1: The Valuation Bubble (A P/E of 524x!)

The most glaring concern across every single brokerage report—from Ashika Research to Jainam Broking—is the valuation. In the world of investing, price is what you pay, and value is what you get. In the case of Clean Max, brokerages argue you are paying a “stratospheric” price for very little current value.

According to the ICICI Securities report, the IPO is priced at a staggering P/E (Price-to-Earnings) ratio of 524x based on FY25 earnings. Even SMC Global, which gave the issue a low ranking of 2/5, calculated the post-issue P/E at 386.22x.

To put this in perspective, let’s look at the industry peers:

• ACME Solar Holdings: Trading at a P/E of ~28x.
• Adani Green Energy: Trading at a P/E of ~119x.
• NTPC Green Energy: Trading at a P/E of ~132x.

Clean Max is asking for a premium that is 4 to 10 times higher than established industry leaders. GEPL Capital explicitly stated that the issue is “overly valued” relative to its moderate financial performance, leaving no “margin of safety” for the retail investor. When a company asks for such a massive premium, it must back it up with extraordinary profits—which brings us to the second red flag.

Clean Max IPO Red Flag #2: Profitability

On paper, Clean Max looks like a growth machine. Its revenue from operations grew at a CAGR of 52.71% between FY23 and FY25. However, a analyst looks at the “Net Profit”, not just the “Sales”).

The GEPL Capital report highlights a disturbing trend: while revenue has grown significantly, profitability has remained stagnant. In FY25, on a massive revenue of INR 1,495.7 crore, the company managed to scrape together a Net Profit of only INR 19.4 crore. This translates to a PAT Margin of a measly 1.3%.

Furthermore, the company has a history of losses, reporting a net loss of INR 59.5 crore in FY23 and INR 37.6 crore in FY24. The Return on Equity (ROE) is equally disappointing. While the industry average ROE stands around 10.16%, Clean Max has struggled with a 3-year average ROE of -2.02%. Brokerages argue that a company that cannot generate meaningful returns on its equity while operating at a large scale is a risky bet, especially at such high entry prices.

Clean Max IPO Red Flag #3: The Debt Trap and Liquidity Crunch

Renewable energy is a capital-intensive business, but Clean Max’s leverage levels are raising eyebrows. The total borrowings of the company stood at a massive INR 10,121.46 crore as of September 2025.

Samco Securities pointed out a critical metric: the Interest Coverage Ratio (ICR). Clean Max has an ICR of just 1.15, compared to the industry average of 1.60. This indicates that the company’s earnings are barely enough to cover its interest obligations. If interest rates rise or project revenues dip slightly, the company could struggle to service its debt.

Adding to this, ICICI Securities flagged a Current Ratio of 0.5. A ratio below 1.0 means the company does not have enough liquid assets to cover its short-term liabilities. This “liquidity crunch” means the company is heavily dependent on the IPO proceeds and constant refinancing to keep its operations running. While INR 1,122 crore of the fresh issue will be used to repay debt, brokerages note that this only scratches the surface of the total INR 10,000 Cr+ liability.

Clean Max IPO Red Flag #4: The Litigation Issue and Governance Gaps

Perhaps the most startling revelation comes from the Samco Securities report regarding outstanding litigations. For a company seeking over INR 12,000 crore in market valuation, its legal baggage is heavy.

The monetary claims in outstanding proceedings involving the company and its directors aggregate to approximately 24.23% of its Net Worth (as of FY23). Even the more recent figures show claims around 11-12% of Net Worth. As any journalist would tell you, a legal claim worth a quarter of a company’s net worth is a potential “black swan” event. An adverse outcome in these cases could severely impact the company’s financial stability and reputation.

Furthermore, Capital Market report highlighted significant regulatory non-compliance. The company has been unable to comply with certain BSE rules for its listed NCDs and has contravened provisions of the Companies Act, 2013 regarding the appointment terms of its directors. In a market where “Governance” is increasingly becoming a deciding factor for institutional investors, these lapses are hard to ignore.

Clean Max IPO Red Flag #5: High Concentration and Execution Risks

Finally, the company’s operational structure is highly concentrated, making it vulnerable to localized risks.

1. Geographical Concentration: According to Axis Capital and Ashika Research, 77.16% of the revenue (as of H1FY26) comes from just two states: Karnataka and Gujarat. Renewable energy is a state-subject, and any change in state-level policies, open-access regulations, or “banking” charges in these two states could cripple Clean Max’s business model.
2. Customer Concentration: The top 10 customers contribute nearly 45% of the total revenue. While these are high-credit-quality customers, the reliance on a few contracts means the loss of even one or two major clients could lead to a significant revenue collapse.
3. Technological Inexperience: Both SMC Global and Capital Market noted that the company is venturing into new 5 MW wind turbine technology and exchange-based power sales—areas where it has limited prior experience. This “execution risk” is heightened by the fact that 3.17 GW of their portfolio is still in the “contracted but unexecuted” phase, susceptible to cost overruns and delays.

Clean Max IPO Broker Recommendations: Verdict

When we look at the cumulative results of Clean Max IPO research notes, the picture is clear. Clean Max is a company with a strong market position and an impressive client list, but it is currently burdened by unsustainable debt, fragile profitability, and a massive legal overhang.

The fact that INR 1,900 crore of the ₹3,100 crore issue is an Offer for Sale (OFS) is the final tell. Promoters and existing investors (like Brookfield and Augment India) are taking money off the table at a time when the valuation is at an all-time high of 500x P/E.

As Samco Securities aptly concluded: “Given the availability of better-performing companies within the sector at more reasonable valuations, it would be prudent to avoid this offering.”

Clean Max IPO Research Notes:

• ICICI Securities: Unrated (Avoid due to 524x P/E)
• Samco Securities: Avoid
• GEPL Capital: Avoid
• SMC Global: 2/5 (Avoid)
• Jainam Broking: Avoid
• Capital Market: 43/100 (Cautious)

For retail investors, the IPO market offers plenty of opportunities. However, Clean Max Enviro Energy Solutions, at its current asking price, seems to be a case of “Overvaluation.”