Pune-Based EPC Firm GK Energy Limited Files DRHP for IPO

Pune-Based EPC Firm GK Energy Limited Files DRHP for IPO

GK Energy Limited has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). Pune-based company now plans to raise funds through an Initial Public Offering (IPO).GK Energy is a pure-play engineering, procurement and commissioning (EPC) provider of solar-powered agricultural water pump systems. The offer comprises direct-to-beneficiary sales and sales to others.

The IPO with a face value of ₹2 is a mix of fresh issue of shares up to Rs 500 crore and an offer for sale of up to 84,00,000 equity shares by selling shareholders. The offer includes reservations for subscriptions by eligible employees.

Offer for Sale consists of shareholders selling shares up to 80,00,00 equity shares by Gopal Rajaram Kabra, and up to 4,00,000 by Mehul Ajit Shah. The company, in consultation with the BRLMS, may consider a Pre-IPO placement of specified securities, aggregating up to ₹100 crore. If the Pre-IPO placement is completed, the amount raised pursuant to the Pre-IPO placement will be reduced from the fresh issue.

Use of net proceeds 

The proceeds from the fresh issue to the extent of Rs 422.46 crore will be used to fund its long-term working capital requirements and general corporate purposes.

The Offer is being made through the book-building process, wherein not more than 50% of the net offer is allocated to qualified institutional buyers, and not less than 15% and 35% of the net offer is allocated to non-institutional and retail individual investors respectively.

GK Energy Ltd in the past has worked in several solar irrigation schemes in India using its expertise in developing such projects. These systems, also known as solar-powered pump systems, are offered under Component B of the Central Government’s Pradhan Mantri Kisan Urja Suraksha Evam Utthan Mahabhiyan (PM-KUSUM) scheme. It is measured by the number of solar-powered pump systems installed under the PM-KUSUM scheme between January 1, 2022, and December 3, 2024, as per the CRISIL Report mentioned in the DRHP.

The company specializes in the EPC of solar-powered pump systems, catering to both direct beneficiaries and other customers. Direct-to-beneficiary sales involve delivering GK Energy branded solar-powered pump systems to farmers who select the company as their vendor on state government-designated agency portals (referred to as state nodal or implementing agencies, SNAs/SIAs). These orders are placed under the PM-KUSUM scheme and similar state-level initiatives. Additionally, the company provides solar dual water pump systems (which include water storage) to local government bodies.

GK Energy’s Order Book

GK Energy’s Order Book was ₹759.18 crore as at October 1, 2024. Revenue from operations increased by 44.23% to Rs 411.09 crore in fiscal 2024 from Rs 285.03 crore in fiscal 2023, primarily due to an increase in its revenue from the EPC for solar-powered pump systems. Profit after tax increased by 258.04% to Rs 36.09 crore in fiscal 2024 from Rs 10.08 crore in fiscal 2023. For the six months ended September 30, 2024, revenue from operations stood at Rs 421.93 crore, and profit after tax stood at Rs 51.08 crore.

IIFL Capital Services Limited, and HDFC Bank Limited, are the book-running lead managers and Link Intime India Private Limited is the registrar of the issue. The equity shares are proposed to be listed on the National Stock Exchange of India Limited and BSE Limited.