GP Eco Solutions India Limited is involved in the distribution of a wide range of solar inverters and solar panels. The company is an authorized distributor of Sungrow India Pvt Ltd or 'Sungrow' for Solar Inverters in North India, and they are also authorized distributors for Saatvik Green Energy Private Limited or 'Saatvik' and LONGi Solar Technology Co. Ltd or 'LONGi' for solar panels in North India. Additionally, they serve as an integrated solar energy solutions provider, delivering comprehensive engineering, procurement, and construction ("EPC") services to the commercial and residential customers, however the contribution of this segment is comparatively less as compared to business of distribution of solar inverters and solar panels. The company also has its own brand called "Invergy". Under the Invergy brand, they sell hybrid solar inverters and lithium ferro phosphate (LFP) batteries. Invergy deals in OEM manufacturing for hybrid and LFP products. Invergy has its own quality and reliable protocol for contract manufacturing of these products. Invergy manages its own supply chain stream to provide easy and comfortable transitions Business Vertical 1. Distributor of Solar Inverters and solar panel A. On grid Solar Invertor B. Hybrid Solar Invertor & Batteries C. Solar Panel 2. Solar EPC 3. Operation and maintenance of Solar plant As per financial performance, GP Eco Solutions India Limited has posted total income / net profits of Rs 46.52 Cr / Rs 0.96 Cr (FY21), Rs 83.52 Cr / Rs 2.77 Cr (FY22), Rs 104.47 Cr / Rs 3.69 Cr (FY23) and Rs 78.58 Cr / Rs 4.73 Cr (upto Q3 FY24). So as per previous financials data, company has shown growth, but sudden rise in net-profit just before IPO is very surprising. Company has posted an average EPS of Rs 4.07 and average RoNW of 57.79% for last three fiscals. Issue is priced at a P/BV of 2.20 as per NAV of 42.65 as on post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 39.73, 29.77 and 17.45 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. Corporate Capitalventures Private Limited is associated with this SME IPO and handled 11 SME IPOs and 1 Main board IPO in last 3 year. From last 11 SME IPOs, all opened above issue price or at par on the day of listing and From last 1 Main board IPO, that is opened above issue price on the day of listing. As of now from last 11 SME IPOs, all are trading above issue price and remaining are trading above issue price and From last 1 Main board IPO, that is trading above issue price. (As on 10.06.24) As per financials, GP Eco Solutions India Limited has shown good growth, RoNW is 57.79% and P/E is respectively 39.73, 29.77 and 17.45 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit just before IPO is very surprising. Company is in business of integrated solar energy solutions provider, which is highly fragmented and competitive business segment. But focus of GoI on solar energy in rural India, so this segment is expected to do well in next couple of years. BRLM performance is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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