Saatvik Green Energy IPO: Will Saatvik Green Energy IPO spark long-term value for investors? – News Air Insight

ET Intelligence Group: Saatvik Green Energy, a solar photovoltaic (PV) module manufacturer, plans to raise ₹700 crore through fresh equity to expand capacity and repay debt, and ₹200 crore through an offer for sale. The promoter stake will fall to 76.02% after the IPO from 90.1%. With improving profitability, strong order book and attractive valuation, the IPO appears to be suitable for investors seeking exposure to the renewable energy sector with a long term horizon.

Business

The Gurugram-headquartered company, founded in 2015, operates three solar module manufacturing facilities in Ambala, Haryana. As of June 30, 2025, these facilities had a total manufacturing capacity of 3.8 gigawatts (GW). Given the additional capacity underway, total capacity is expected to reach 4.8 GW by the end of the September quarter. Saatvik plans to invest about ₹166.4 crore in its wholly owned subsidiary, Saatvik Solar Industries (SSIPL), to repay or prepay borrowings. Another ₹477.2 crore will go toward setting up a 4 GW solar PV module facility at Gopalpur in Odisha, which carries attractive state incentives such as a 30% capital subsidy, electricity duty exemptions and tariff reimbursements. The Odisha plant will help Saatvik achieve backward integration by adding solar cell manufacturing capabilities, which will reduce dependence on imports and improve margins over time.

Financials
Revenue surged to ₹2,158.4 crore in FY25 from ₹1,087.9 crore in FY24, while net profit more than doubled to ₹213.9 crore from ₹100.5 crore. The operating margin before depreciation and amortisation (Ebitda margin) improved to 16.4% from 14.4%. The order book surged almost nine-fold to ₹5,076.8 crore, providing strong revenue visibility. While the debt-to-equity ratio has improved from 2.2 to 1.4, it remains high compared with under one for peers. Saatvik’s gross debt climbed to ₹458.1 crore in FY25 from ₹263.4 crore a year earlier as the company ramped up capacity. Trade receivables days have increased to 48.7 in FY25 from 33.2 in FY24, reflecting extended collection cycle that may affect cash flows.

Valuation

Saatvik is valued at a trailing price-earnings (P/E) multiple of 27.6 compared with 55 for Waaree Energies and 49.9 for Premier Energies. The lower multiple partly reflects the company’s higher debt-equity ratio of 1.4 in FY25 compared with 0.1 for Waaree and 0.7 for Premier.