Sahaj Solar Limited is a renewable energy solution provider engaged majorly into three businesses being manufacturing of PV modules, providing solar water pumping systems and providing EPC services to the PAN India customers. They are a manufacturing as well as a service provider company which gives them an edge in the solar power market. First being PV Module manufacturing, for which the company has a PV module manufacturing plant having a capacity of 100 MWs at the plant in Bavla, Ahmedabad, Gujarat, India on a land admeasuring approximately 2,883.77 square metres; having a construction of 2445.5 square metres comprising of factory as well as office premises enabling the company to deliver quality and affordable solar panels to its customers. They offer mono & poly crystalline PV Modules for various solar projects across India and abroad. The plant is an integrated manufacturing facility for PV modules. Apart from polycrystalline module, the facility manufactures Mono PERC (Passivated Emitter and Rear Contact) module, with not less than 21% and higher efficiency also. The plant has the capacity to manufacture customized size PV modules. Secondly, the company is engaged in providing solar water pumping systems. The key components of solar water pumping system is solar panel which is manufactured by the company. The second important component of the solar water pumping system is the module mounting structure (MMS) is manufactured by Veracity Energy and Infrastructure Private Limited (one of the subsidiary company). The controller for solar water pumping system is designed by Veracity Powertronics Private Limited (one of the subsidiary company). These components comprise of more than 70% of the total system cost. The balance components of the solar water pumping system are being outsourced. As per financial performance, Sahaj Solar Limited has posted total income / net profits of Rs 62.18 Cr / Rs 0.70 Cr (FY21), Rs 67.28 Cr / Rs 1.02 Cr (FY22), Rs 185.80 Cr / Rs 6.48 Cr (FY23), and Rs 201.71 Cr / Rs 13.37 Cr (FY24). So as per previous financials data, company has shown good growth, but sudden rise in net-profit just before IPO raises doubts for results. Also trade receivables is around 43% of FY24 total revenue. Company has posted an average EPS of Rs 16.70 and average RoNW of 34.61% for last three fiscals. Issue is priced at a P/BV of 4.41 as per NAV of 40.83 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 192.93, 30.50 and 14.79 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Kunvarji Finstock Private Limited is associated with this SME IPO and handled 1 SME IPOs in last 3 years. From last 1 SME IPOs, all opened below issue price or at par on the day of listing. As of now from last 1 SME IPOs, all are trading below issue price and remaining are trading above issue price. ( As on 08.07.24 ) As per financials, Sahaj Solar Limited has shown good growth, RoNW is 39.96% and P/E is respectively 192.93, 30.50 and 14.79 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit just before IPO and higher trade receivables raises doubts. Company is engaged in the business of in the field of supply, installation, testing and commissioning (SITC) of solar and electrical goods and services to various government bodies, which is highly fragmented and competitive business segment. So, we give "SUBSCRIBE FOR LISTING GAINS" rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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