PMEA Solar Tech Solutions Limited Files DRHP for IPO

PMEA Solar Tech Solutions Limited Files DRHP for IPO

Mumbai-based PMEA Solar Tech Solutions, a manufacturer in the solar tracking and mounting products sector in India, has filed its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

The IPO with a face value of Rs 10 per equity share is a mix of fresh issues of up to Rs 600 crore and an offer for sale of up to 11.23 million equity shares.

The offer for sale consists of the sale of equity shares up to 2.80 million equity shares by Samir Pravin Sanghavi, up to 2.80 million equity shares by Kapil Pravin Sanghavi, up to 2.80 million equity shares by Vishal Navinchandra Sanghavi, up to 2.80 million equity shares by Sandeep Navinchandra Sanghavi.

The company, in consultation with the book-running lead managers, may consider a further issue of equity shares through a private placement, preferential offer, or any other method aggregating up to Rs 120 crores, as pre-IPO placement shall not exceed 20% of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced.

The Offer is being made through the book-building process, wherein not more than 50% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the offer shall be available for allocation to non-institutional bidders, and not less than 35% of the offer shall be available for allocation to retail individual bidders.

The proceeds from the fresh issue to the extent of ₹ 119.55 crore for funding capital expenditure for the setting up of certain manufacturing facilities undertaken through investment in the wholly owned Subsidiary, PMSS; Rs 120.45 crore for funding of capital expenditure requirements of the Company towards purchase of machinery/equipment; Rs 240 crore for repayment or prepayment, in full or in part, of all or a portion of certain outstanding borrowings availed by the Company and investment in the wholly owned Subsidiaries, PMSS and Tapovan, for repayment or prepayment in full or in part, of all or a portion of certain outstanding borrowings availed by PMSS and Tapovan; and general corporate purposes.

PMEA Solar was established in 2006 by Chairperson, Samir Pravin Sanghavi. The Company specializes in Solar tracking mounting systems and equipment with products ranging from Solar Trackers, Solar Experts, and Solar Trackers. These include Module Mounting Assemblies and Rolled Products which are fundamental inputs into large-scale Solar Power Plants. It has an annual installed capacity of 16 gigawatts (“GW”) of module mounting assembly (“Module Mounting Assembly”) and 6 GW of rolled products (“Rolled Products”), as of March 31, 2024, according to a F&S report mentioned in the DRHP.

PMEA Solar had an estimated market share of 9% of the overall domestic market for solar tracking and mounting products used in solar trackers, according to a F&S Report.

The Solar tracking and mounting products are used as structural components to install solar photovoltaic (“PV”) modules for solar power projects and provide structural integrity (Source: F&S Report) for solar panels to optimize their exposure to sunlight.

As of March 31,2024, the company has an array of products categorized in its Solar Business which includes 56 SKUs in Module Mounting Assemblies and 16SKUs in Rolled Products.

PMEA Solar not only focuses on the production of solar products but also makes various electrical components including switchgear, automotive parts for Original Equipment Manufacturers, lighting, furniture for large-scale OEMs, and partition panels for pharmaceuticals & healthcare.

In the solar space, PMEA Solar has built credible partnerships with some of the key clients, the EPC firms, global tracker solutions firms, and independent solar power producers. It has also continued to partner with Nextracker LLC, the world’s leading solar tracking solutions provider, according to a F&S report mentioned in the DRHP.

At present the company has 11 manufacturing plants in Maharashtra and Gujarat, and in August 2024 it is going to start trial production in its newly launched plant at Pimpalnare in Nashik and a manufacturing plant in Ohio, USA. The Company has two more manufacturing units under construction. The first one near Nashik and the second plant at Pune.

PMEA Solar’s revenue from operations increased by 87.34% from ₹ 800.79 crore in Fiscal 2023 to ₹ 1500.20 crore in Fiscal 2024 primarily on account of an increase in revenue from operations from the sale of products and other operating revenue. Restated profit after tax for Fiscal 2024 was ₹ 103.64 crore and for Fiscal 2023 was ₹ 27.44 crore.

IIFL Securities Limited and ICICI Securities Limited are the book-running lead managers to the issue and Link Intime India Private Limited is the registrar to the offer.