India’s solar energy sector is booming with government support and global demand for clean energy solutions. In this market, Vikram Solar is going for an IPO to attract investors who are bullish on renewable energy.
With over 17 years of industry experience and a strong manufacturing presence, Vikram Solar is one of the largest solar PV module manufacturers in India. Before you invest, you need to understand the company’s business model and revenue streams, as these are the pillars of its growth.
2. Vikram Solar IPO Snapshot
| Detail | Information |
|---|---|
| IPO Dates | 19 – 21 August 2025 |
| Price Band | INR 315 – 332 per share |
| Issue Size | INR 2,049.70 – INR 2,079.37 crore |
| Fresh Issue | INR 1,500 crore |
| Offer for Sale (OFS) | 1,74,50,882 shares (INR 549.70 – 579.37 crore) |
| Lot Size | 45 shares |
| Retail Quota | 35% |
| Listing On | NSE, BSE |
| Promoters | Gyanesh Chaudhary, Gyanesh Chaudhary Family Trust, Vikram Capital Management |
3. Company Overview & Industry Position
- History & Growth – Founded in 2006, Vikram Solar started commercial production in 2009 with 12 MW capacity. Over the years, it has scaled up to 4.50 GW installed capacity as of 31 March 2025.
- Manufacturing Footprint – Facilities are located in Falta SEZ (West Bengal) and Oragadam (Tamil Nadu), both with proximity to ports, rail and road networks for efficient domestic and export operations.
- Market Position – Among pure-play non-captive players, Vikram Solar has one of the largest enlisted capacities in MNRE’s Approved List of Module Manufacturers (ALMM) with 2.85 GW as of 30 June 2025.
- Customer Segments – Supplies to large utility-scale developers, commercial & industrial (C&I) clients, residential rooftop installers and international EPC players, including in the US and other global markets.
4. Vikram Solar Business Model & Revenue Streams Analysis
Vikram Solar has a multi-segment integrated business model combining manufacturing scale, technology leadership and project execution capabilities. Its revenue profile is diversified across solar PV module manufacturing, EPC projects and long-term O&M services – so it can tap into one-time large contracts and recurring income streams.
4.1 Vikram Solar Revenue Streams
A. Solar PV Module Manufacturing & Sales (Primary Revenue Contributor)
- Installed manufacturing capacity:
- Current: 4.50 GW (as of 31 March 2025)
- Planned: 15.50 GW by FY26 and 20.50 GW by FY27
- ALMM enlisted capacity: 2.85 GW (as of 30 June 2025) – one of the highest among pure-play Indian manufacturers.
- Customer segments:
- Utility-scale solar farm developers (government & private sector tenders).
- Commercial & Industrial (C&I) segment – large energy consumers installing on-site generation.
- Residential rooftop segment – through distributors/installers.
- Export markets – targeting the US, Europe, and other tariff-protected geographies.
- Competitive advantage: Awarded EUPD Top Brand PV Seal in May 2025, signalling strong brand credibility.
- Production performance:
- FY25 capacity utilisation: 78.12% overall, with Falta at 81.83% and Oragadam at 72.75%.
- Strong jump from FY24 utilisation of 48.09%, indicating a demand surge and operational ramp-up.
B. EPC (Engineering, Procurement & Construction) Services
- Provides turnkey project execution, covering:
- Engineering & Design
- Procurement of Modules & Balance of System (BoS)
- Construction & Commissioning
- Serves both domestic and export projects, leveraging manufacturing capability to secure EPC contracts.
- EPC contracts typically yield higher per-project revenue but are non-recurring.
- Acts as a sales channel for in-house manufactured modules, ensuring baseline demand.
C. O&M (Operations & Maintenance) Services
- Offers multi-year service agreements for plant upkeep post-installation.
- Includes cleaning, preventive maintenance, performance monitoring, and repairs.
- Generates steady recurring revenue with low incremental cost, supporting margins during industry slowdowns.
- Helps maintain long-term customer relationships, increasing repeat business probability.
Read Also: Vikram Solar vs Waaree vs Premier Energies
4.2 Vikram Solar Business Model Structure & Strategy
| Pillar | Details & Data |
|---|---|
| Integrated Approach | Combines manufacturing + EPC + O&M to capture multiple value chain stages. |
| Scale Expansion | From 12 MW in 2009 → 4.50 GW in 2025, targeting 20.50 GW by FY27. |
| Backward Integration | Solar cell manufacturing (3 GW + 9 GW) planned in Tamil Nadu to reduce reliance on imports. |
| Diversification | Battery Energy Storage System (BESS) capacity of 1 GWh (expandable to 5 GWh by FY27). |
| Geographic Mix | Domestic core market + exports to high-margin regions (US, Europe). |
| Technology Edge | Shift to 132 half-cell, 20-busbar G12 cell modules for higher efficiency. |
4.3 Revenue & Profitability Drivers
- Economies of Scale – Larger manufacturing volumes reduce per-unit costs, improving gross margins.
- Export Price Premiums – International markets, especially in the US & EU, offer 10–15% higher realisation per watt compared to domestic sales.
- Capacity Utilisation Impact – At FY25’s 78% utilisation, the company leveraged fixed costs better, boosting EBITDA margins from 8.98% (FY23) → 14.37% (FY25).
- Service Recurrence – O&M provides stable annuity-type revenues, smoothing cash flow.
- Project-Based Upside – Large EPC contracts can significantly lift quarterly revenues.
4.4 Challenges & Sensitivities in the Model
- Raw Material Price Volatility: Cells and wafers account for a large portion of manufacturing costs; price swings can squeeze margins.
- Capacity Ramp-Up Risks: Rapid expansion from 4.50 GW to 20.50 GW requires heavy capex and market absorption capacity.
- Policy Dependence: ALMM policies, safeguard duties, and international trade tariffs heavily influence demand and pricing power.
- Working Capital Intensity: Large EPC contracts and export sales often mean longer receivable cycles.
Vikram Solar’s business model is capacity-led, export-leveraged and integration-focused. Its combination of manufacturing scale, EPC capability and recurring O&M contracts creates a three-tier revenue engine. The aggressive move into solar cells and battery storage is a step towards vertical integration, which can improve margins and reduce supply chain risks – if execution matches projections.
5. Advantages, Risks and Challenges of the Business Model
5.1 Advantages
- Scale Leadership in India’s Solar PV Space
- As of 31 March 2025, Vikram Solar has 4.50 GW of manufacturing capacity and is one of the largest domestic players with plans to scale up to 20.50 GW by FY27.
- Large-scale operations help in reducing per-unit production cost and enhance bargaining power with suppliers.
- Strong Brand & Industry Recognition
- Continuous inclusion in the BloombergNEF Tier 1 Manufacturer List since 2014 (latest Q1 2025).
- Awarded EUPD Top Brand PV Seal in May 2025 which will enhance customer trust in both domestic and export markets.
- Integrated Value Chain Approach
- Manufacturing, EPC, and O&M services provide multiple revenue streams.
- Planned backwards integration into solar cell production (3 GW + 9 GW) can improve cost control and margins.
- Strategic Location of Plants
- Plants in Falta (West Bengal) and Oragadam (Tamil Nadu) are close to ports, which will make them competitive in exports.
- Export Growth Potential
- Global demand for solar modules is increasing especially in US and E,U where anti-dumping duties on Chinese modules are creating a pricing advantage for Indian manufacturers.
5.2 Risks
- Raw Material Price Volatility: Dependence on imported wafers and cells will impact margins on global polysilicon price fluctuations.
- Execution Risk in Expansion: Scaling up from 4.50 GW to 20.50 GW in 2 years will require heavy capex and strong demand absorption – delays can impact returns.
- Policy & Regulatory Dependence: Government incentives, ALMM inclusion and global trade policies will directly impact sales volume and pricing.
- Customer Concentration: Large EPC contracts with limited number of customers will create dependence on few big clients.
5.3 Industry Challenges
- High Working Capital Needs – EPC projects and export sales often require extended credit terms.
- Technology Upgradation Pressure – PV technology evolves rapidly; manufacturers must constantly upgrade lines to remain competitive.
- Price Competition from China – Indian players face intense price pressure from Chinese imports, especially in markets without protective tariffs.
6. Financial Performance & Valuation Snapshot
6.1 Revenue Growth
| FY | Revenue (INR Cr) | YoY Growth |
|---|---|---|
| 2023 | 2,073.23 | — |
| 2024 | 2,510.99 | +21.1% |
| 2025 | 3,423.45 | +36.3% |
- Strong CAGR driven by higher capacity utilisation (48% in FY24 → 78% in FY25) and increased export sales.
6.2 Profitability Metrics
- Net Profit: INR 14.49 Cr (FY23) → INR 79.72 Cr (FY24) → INR 139.83 Cr (FY25)
- EBITDA Margin: 8.98% (FY23) → 15.87% (FY24) → 14.37% (FY25)
- ROCE: 12.78% (FY23) → 20.76% (FY24) → 24.49% (FY25)
- Debt/Equity improved to 0.19 in FY25, reducing financial leverage risk.
6.3 Vikram Solar IPO Valuation
| Metric | Pre-Issue FY25 | Post-Issue FY25 |
|---|---|---|
| EPS (INR) | 4.60 | 3.87 |
| PE Ratio (X) | 68.48–72.17 | 81.40–85.79 |
| RONW (%) | 11.26 | — |
| NAV (INR) | 39.24 | — |
- The IPO is valued at a premium compared to peers like Premier Energies (PE ~47) and Websol Energy (~40), implying market optimism about growth potential.
7. Key Takeaways for Investors
- Strong Growth Story: Capacity expansion and global market access.
- Attractive Industry Tailwinds: Renewable energy adoption, government support, and exports.
- Execution & Policy Risks: Aggressive capacity plan, policy dependence.
- Premium Valuation: High multiple, needs consistent earnings growth.
Verdict
Vikram Solar is a good play on India’s renewable energy story with integrated operations and execution. But given the aggressive growth and high valuation, investors should balance the growth story with execution and policy risks. For long-term investors with a high risk appetite, it’s a good bet on India’s solar manufacturing self-reliance.
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