Solar energy adoption is ongoing at a rapid pace in India with significant government backing. Solar module manufacturers are now in the limelight with another IPO hitting the streets. Saatvik Green Energy, manufacturer of solar modules, will have its IPO open till September 23. The ₹900-crore IPO consists of a fresh issue of ₹700 crore and offer for sale of ₹200 crore. The fresh issue fund are expected be used for capacity expansion and reducing debt.
The company has delivered rapid growth with FY23-25 revenue and EBITDA CAGR of 88 per cent and 364 per cent respectively from its plants in Ambala and is now setting up capacities in Odisha. At the upper end of the IPO price of ₹465, the company is valued at 20 times EV/EBITDA and 27 times PE on a trailing basis.
This is more reasonable and cheaper compared with industry range of 50-80 times PE. The nascent industry faces risks of possible overcapacity, technological disruption and export glut. But given the strong domestic demand and the company’s expansion plans (doubling in the next two years) and a valuation discount to peers, we recommend investors with a high-risk appetite subscribe to the issue.
Industry highlights
Saatvik manufactures solar modules from solar cells sourced primarily from China. Polysilicon is a basic raw material manufactured from silicon, which is transformed into cylindrical ingots. Ingots are sliced to form wafers, which then undergo a multi-step process to produce solar cells. Solar cells are arranged and interconnected with contacts, mounted in a aluminum frame within a tempered glass for a solar module. Making polysilicon is a highly complex process and so is solar cell manufacturing.
Technology, expansion and integration
Saatvik’s installed solar module capacity increased from 550 MW in FY23 (510 MW effective) to 3.7 GW by FY25-end.
The company is targeting an installed capacity of 8.8 GW by FY26-end. This includes Ambala plants with 3.8- GW current capacity and 1 GW additional capacity to be operationalised by August 2026 and 4-GW capacity under construction in Odisha. Owing to several State government incentives in Odisha (capital investment subsidy, duty exemptions, and SGST and power reimbursements), the company is also setting up a solar cell manufacturing capacity of 4.8 GW in addition to the 4 GW module capacity. The company has purchased the technology from a Chinese supplier, and the cell facility is expected to commence production in FY27. This should enable Saatvik with 8.8 GW module manufacturing capacity from 4.8 GW capacity currently. This is along with backward integration in 4 GW cell manufacturing capacity, which is a complex technology.
Saatvik’s portfolio includes two solar module technologies. Mono PERC (monocrystalline passive emitter and rear cell) modules and its improved version N-TOPCon (n type Tunnel Oxide Passivated Contact) modules, which have a 15-20 per cent higher efficiency at similar prices. The current 4.8 GW capacity will have 600 MW of mono PERC and 4.2 GW of N-TOPCon modules and the upcoming Odisha facility will have complete 4 GW of N-TOPCon.
Domestic demand
Solar module demand is on a strong trajectory in India. In the 475 GW power capacity, solar accounts for close to 105 GW or 22 per cent. India aims to develop a total capacity of 700 GW by 2030 and mostly led by solar. The targeted solar capacity by 2030 is 270 GW or 38 per cent. This implies a 30-40 GW addition per year in the next five years.
India currently has an installed solar module capacity of 90 GW and growing fast, which implies that supply leads demand. But considering capacity utilisation, available N-TOPCon capacity, approved and organised suppliers; the demand-supply threat is not significant. The industry has a 60-70 per cent capacity utilisation. Also, Mono PERC is the dominant technology, accounting for close to 70 per cent of the installed capacity, which would likely aim for upgradation to N-TOPCon, considering the limited land available for solar projects. Approved List of Models and Manufacturers (ALMM) suppliers are qualified for government or government-funded projects, which again filters out smaller players. The excess supply is inverted on applying these filters. Additionally, the existing and installed solar power capacity would prefer upgrading the modules to efficient ones, considering the constraint on land availability for large solar power installations.
But with rapidly evolving situation where larger players are also entering (Adani, Tata and foreign players) and the existing ones are adding capacity, short-term overcapacity will have to be monitored. The long run, beyond 2030, is positive for growth. The power requirements will continue to grow with GDP growth, compounded by increase in per-capita power consumption in India. Solar power has reached grid-level parity where it can compete with thermal or other sources or even cheaper at ₹2.5 per unit. Grid loading in off time is a concern and is being addressed with energy storage and also demand from green hydrogen/nitrogen industries.
Export opportunity is a mixed bag. China has an installed capacity exceeding 1,000 GW in solar modules along with a dominant presence in supply chain from polysilicon to solar modules. But the US and even Europe are diversifying from Chinese supplies on trade concerns. This allows India to act as a supplier to the energy transition plans that the US and Europe are also undergoing. The current tariffs on India and the US initiating anti-dumping probe on solar PV cell imports from India, though, are a hindrance. Saatvik has a 1 per cent export presence, but the domestic glut on possible tariffs on even Indian supplies (apart from China and proxy suppliers in Vietnam) to the US may impact the prices domestically.
Financials
Saatvik reported PAT of ₹214 crore (10 per cent PAT Margin) in FY25 on revenues of ₹2,158 crore. The EBITDA margins improved from 2.4 per cent in FY23 to 13.6 per cent in FY24 on achieving scale and have further increased to 15 per cent in FY25. This has been achieved even as realisation from solar modules have declined from ₹24,500 per watt in FY23 to ₹14,284 per watt in FY25 (24 per cent CAGR decline).
The company contract allows for pass through of prices from currency, sales price and government regulatory changes, which has allowed for leverage to play out despite declining realisations. The solar module prices have declined, as the raw materials from Chinese solar cell faced overcapacity and restricted exports, which impacted cell costs leading to stable margins for Saatvik.
The company is expanding capacities tracking the strong domestic demand and energy transition across the world. The reasonable valuations factor the risk from export glut to domestic prices but the nascent industry, facing evolving regulatory and trade dynamics, does face an elevated risk profile. Hence, only high-risk investors with a long-term perspective can consider applying to the IPO.
Published on September 20, 2025