Started in 2014, Solex Energy Limited is Anand, Gujarat based company, engaged in providing renewable energy solutions, specialised in the manufacturing of Solar photovoltaic module, solar home light, solar street light, solar lantern, solar power plant, solar inverters, solar water heating systems and wood fired water heater etc. Company precisely manufacture the offered products using optimum grade components and advanced technology in compliance with the set norms of the industry. Company also provide the offered appliances in numerous specifications and customisation in accordance with the demands of its customers. Company's manufacturing facilities is situated in Anand, Gujarat. Solex Energy Limited is an ISO 9001:2015 Certification, ISO 14001:2015 Certification, OHSAS 18001:2007 and CE MARK CERTIFIED, offering systems of high quality and reliability. Solex modules are TUV certified & tested by the UL India Pvt. Ltd and comply in accordance with the standards. SEL's product ranges from Solar PV Module (3WP - 325 WP), Solar Lanterns (CFL & LED Base), Solar Home Light System (CFL &LED Base), Solar Street Light System (CFL & LED Base), Solar Off-Grid Power Plant (Solar Rooftop Systems), Solar GridConnected Power Plant, Solar Water Heater Flat Plant Collector, Solar Water Heater ETC Type, Solar Submersible Pump (AC &DC), Solar Surface Pump (DC). Company also provides solution for solar roof top system, solar home and rural lighting system, solar power pack and solar power plant. SEL's Products are eligible for Subsidy from Government which is reduced from sales value during the sale of Product and thereafter release to Company directly from Government. On financial performance front, SEL posted turnover/net profits of Rs. 6.38 cr. / Rs. 0.10 cr. (FY15), Rs. 46.62 cr. / Rs. 0.39 cr. (FY16) and Rs. 34.50 cr. / Rs. 0.92 cr. (FY17). For FY18 till 31.07.17 company has posted net profit of Rs. 0.31 cr. on turnover of Rs. 6.36 cr. As company has give financials for only first 4 months which is surprising. For last three fiscals it has posted an average EPS of Rs. 2.49 and average RoNW of 20.88% on an equity base of Rs. 2.23 crore. So, it has shown inconsistency in top and bottom lines for all these years. Issue is priced at a P/BV of 4.71 based on its NAV of Rs. 11.04 as on 31.07.17 and at a P/BV of 2.31 based on post issue NAV of Rs. 22.49. If we annualise latest earnings and attribute it to fully diluted equity post issue, then asking price is at a P/E of around 28, which makes this issue aggressively priced. As per offer documents, its peer, Swelect is currently trading around 17 P/E. On merchant banker's front, this is the 11th mandate from its stable. Out of last 10 listings, all listed positive with 1 to 20% premium on the day of listing. As per financials, company's growth is not consistent, RoNW is 20.88% for last three fiscals and issue looks aggressively priced as per latest earnings. Company is in renewable energy sector, specialised in Solar Energy and Government is very focused to this sector with some incentives, so future of company looks bright. Thus, we give NEUTRAL rating to this SME IPO.
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