Clean Max Enviro Energy Solutions (Clean Max) is a leading renewable energy (RE) and services provider. As of October 2025, the company had an operational capacity of 2.8 GW (owned or managed) and another 3.17 GW capacity that is contracted and yet to be delivered.
Clean Max has reported strong revenue growth of 27 per cent CAGR in FY23-25 along with EBITDA margin expansion from 40 per cent to 60 per cent during the period. This has delivered an EBITDA growth of 55 per cent CAGR in FY23-25. But the operations are capital-intensive and despite the high EBITDA profits, the company reported profit of only ₹19 crore in FY25, as the impact of depreciation and interest are higher in the initial periods when the company is scaling up.
At the upper band of the IPO, it is valued at 17 times EV/EBITDA. While the valuation is not cheap, it is not expensive either when considering the scope for growth from contracted capacity in the next two years, robust demand from AI and data centres for RE power and relative valuation with peers.
However, execution risks and more margin of safety that is required in valuation for that, and the current context of heightened market volatility should also be considered. Given these, we recommend that investors wait and watch for now and can, therefore, skip the IPO. Given the potential, investors can keep it on their radar, track business performance post-listing and consider entering at a reasonably attractive valuation when the opportunity is presented.
The IPO values the company at ₹12,325-crore market capitalisation. It includes a fresh issue of ₹1,200 crore and an OFS of ₹1,900 crore. The fresh issue proceeds will be used to lower debt by ₹1,100 crore from a net debt of ₹8,500 crore as of September 2025. The issue is open February 23-25.
Business
Clean Max serves clients in the technology space (data centres), as also conventional clients (GCC, FMCG, cement) through power and services sales.
As of September 2025, the company had 555 clients with an average PPA (power purchase agreement) of 22 years. With 72 per cent of FY25 revenues from repeat customers that scale up with new PPAs, the company has a strong client base.
Of the 2.8 GW operational capacity as of October 2025, 62 per cent is in solar, 11 per cent in wind and 27 per cent in hybrid (solar and wind). Business of Clean Max can be split into four segments on the basis of GW contracts (refer pie chart).
In onsite solar operations, the power plants are located within customer premises. Clean Max is responsible for setting up the facility and managing operations. In STU group captive model, the clients invest at least 26 per cent equity and purchase 51 per cent of the power generated, which allows clients to avoid additional charges on using the State grid for transmission.
In STU open access power plants of Clean Max, there is no customer equity participation and the company supplies power based on power purchase agreements. Additional charges on grid utilisation are avoided by customers under a few State government schemes (Gujarat, Tamil Nadu and Karnataka).
STU capex refers to State Transmission Utility projects which are wholly invested in by customers and Clean Max plays the role of an EPC contractor. This business along with carbon management operations represent the services part of the company’s business and accounts for 26 per cent of its revenue, while its core power business, consisting of onsite solar operations, STU group captive and STU open access, account for 74 per cent of its revenue.
The company is also developing CTU (central transmission utility) connected projects, which can aggregate demand of the client across locations. Under this arrangement, if the client purchases from the grid, Clean Max will also sell to the grid and the difference in price is netted in the form of environmental attributes that are purchased by the client from Clean Max. This is a virtual PPA (VPPA) and is useful for meeting Net zero or other ESG targets of companies.
RE Support
Companies prefer RE power-purchase directly from IPP (independent power producers) over the grid, as the cost is 30-40 per cent less. This aids companies to meet several ESG and Net Zero targets while saving cost.
The Indian market has aided the transition to renewable power with favourable and an evolving policy that includes an exemption from different charges or a framework that enables third-party purchases and VPPAs.
AI and data centres are the immediate drivers of growth for RE demand and for the company. Clean Max will have a total capacity of about 6 GW (2.8 GW current plus 3.17 GW work in progress), of which around 2.4 GW is from the AI and data centres segment as of October 2025 compared to just 250 MW in March 2024. Growth will be driven by this segment and additional demand from GCCs, infrastructure and energy-intensive sectors that are looking to benefit from cheaper and greener power sources. With the policies in place to procure RE power as per requirement (onsite, STU, CTU or open access), the demand is expected to be strong.
The company reported 65 per cent EBITDA margin in H1FY26 compared to 80-85 per cent range for peers. As the revenue mix tilts to power generation from services, which have a 13 per cent EBITDA margin, the company should drive margin improvement as well. As with any capital-intensive industry, the depreciation and finance costs are higher during the initial years and decline in the later years. As the company expands beyond the 6-GW capacity, debt will be added. But on a larger revenue base and listed financials, the company should secure better credit rating (Care A+ currently), improving the cost of funds.
Published on February 21, 2026
