Kolkata-based Vikram Solar, one of India’s largest pure-play manufacturers of solar photovoltaic (PV) modules and an EPC contractor for solar projects, will open its over ₹2,000-crore IPO on August 19. The offer comprises a fresh issue of ₹1,500 crore and an offer for sale of up to 1.75 crore shares worth ₹579 crore by promoter group shareholders. Post-issue, promoters will hold 63.12 per cent. The price band of ₹315-332 per share implies a post-issue market capitalisation of ₹11,471-12,009 crore.
As of FY25, 98.23 per cent of Vikram’s operating revenue comes from solar PV modules, and the IPO proceeds will partly fund two major capacity projects at its subsidiary, VSL Green Power, in Gangaikondan, Tamil Nadu. Phase I will establish an integrated facility with 3 GW of solar cell and 3 GW of solar module capacity, costing ₹769.7 crore from IPO funds. Phase II will expand the module capacity at the same site from 3 GW to 6 GW, with ₹595.2 crore allocated. Together, these projects form the backbone of Vikram’s plan to scale its module capacity from 4.5 GW to 20.5 GW by FY27, alongside 12 GW of solar cell capacity (backward integration edge) and up to 5 GWh of battery storage.
Vikram Solar is pricing the offer at 24.5x EV/EBITDA on FY25 earnings, versus 20-23x for larger listed peers, despite lower current EBITDA margin (14.4 per cent) and PAT margin (4.1 per cent). The IPO comes at a time when there is negative sentiment amid the US examining potential tariff circumvention on certain solar imports, though exports formed only about 1 per cent of Vikram’s FY25 revenue. Â
A repeat of 2023’s price slump, especially if US trade policy shifts reduce access to that market, could force Indian module makers to dump capacity domestically. This can trigger price wars and cast doubt over the payback timelines for aggressive expansions. Given these risks and the fully-priced offer, investors may be better served by adopting a wait-and-watch approach on the Vikram Solar IPO as the risks outweigh rewards for now.
Business, industry
India’s fast-growing electricity demand and push to cut fossil fuel use make solar power central to its energy transition. Government policies such as the Approved List of Models and Manufacturers (ALMM), basic customs duty (BCD) on imports and the production-linked incentive (PLI) scheme for high-efficiency PV modules have spurred large-scale domestic manufacturing.
Government projects can procure solar PV modules only from suppliers listed in the ALMM. From June 1, 2026, amendments made in December 2024 will require both solar PV cells and modules used in most projects, including government-backed and open access schemes, to come from ALMM List II. This reinforces the need for domestic, quality-assured production.
A safeguard duty introduced in July 2018 on imported solar cells remained until July 2021, after which it was replaced with a 25 per cent BCD from April 2022, reduced to 20 per cent from May 2025. The same 20 per cent BCD now applies to both solar cells and modules. These duties raise input costs unless in-house cell production becomes viable or purchases are sourced from competitive domestic suppliers.
Coupled with India’s 2030 target of 500 GW non-fossil fuel capacity and rapid adoption of newer cell technologies, all these measures have strengthened demand visibility and competitiveness for Indian modules.
Commencing operations in 2009, Vikram Solar is among India’s largest pure-play module makers. While it also undertakes EPC contracts, manufacturing now dominates the revenue mix. In FY23 and earlier, EPC services formed a large share, mainly to push bulk module sales.
With ALMM and BCD boosting domestic demand from FY24, the company pivoted to direct module sales. Its products serve utility-scale, rooftop and off-grid markets, supplying Independent Power Producers (IPPs), developers and commercial clients in India and select overseas markets.
The company operates two facilities, Falta SEZ (West Bengal) and Oragadam (Tamil Nadu), and both are within 60 km of ports, enabling cost-efficient sourcing and logistics.
The company’s solar PV installed capacity of 4.5 GW is targeted to rise to 15.5 GW by FY26 and to 20.5 GW by FY27 (including a 3-GW upcoming facility in the US). Alongside, there will be 12 GW of solar cell capacity and a battery energy storage system (BESS) project of up to 5 GWh. The new solar cell capacity will cut dependence on external suppliers and improve cost control.
The BESS project will open a new revenue stream, enabling Vikram to offer integrated solar-plus-storage solutions. Crisil Intelligence estimates that the BESS market will reach $8-10 billion by fiscal 2030 at a CAGR of 18-19 per cent.
As of FY25, the company’s order-book is 10.34 GW (2.3x its rated capacity). This compares with 25 GW of Waaree Energies and 5.3 GW of Premier Energies. Typically, Vikram converts 18-20 per cent of its order-book into annual module sales.
To diversify its offerings, the company is also actively exploring the introduction of new product categories, such as inverters, cables and solar kits.
Valuation, risks
At the upper price-band, the IPO values Vikram Solar at 24.5 times EV/EBITDA based on FY25 earnings, which is in-line with peers despite having a lower margin profile. The company’s revenue and PAT grew 36 per cent and 75 per cent in FY25. We are ignoring comparisons with FY23 due to the smaller profit base. On a Price/Earnings basis, the IPO asking price is stiff at over 80 times vs 35-45 times for Waaree Energies and Premier Energies. This, in our opinion, leaves little margin of safety.
As Vikram’s higher capacities come on stream and backward integration is fleshed out, the greater scale should also help it boost revenue and push PAT margins near Waaree and Premier levels, both of which generate 13-14 per cent.
The planned US facility is aimed at tapping North American demand, benefiting from proximity to customers and potential tariff advantages. The move also aligns with a broader industry shift to localise manufacturing in the US, while helping Indian players diversify away from China-dependent supply chains.
Of course, delays in executing these plans including Phase I/II expansions or the new US facility could slow the growth trajectory. The bigger concern is whether overall demand will remain strong enough for new capacities to deliver returns. A downturn resembling 2023 could return if changes in US trade rules limit exports. Indian manufacturers might flood the local market with excess capacity, sparking cut-throat price battles.
The other major risk is volatility in module pricing. For instance, although solar PV module prices rose 22 per cent and 7 per cent in FY22 and FY23, there was a sharp drop in FY24 due to a supply glut in China and falling upstream costs such as polysilicon. Prices have since stabilised at around $0.11 per watt-peak (Wp) as of March 2025, but renewed weakness could squeeze margins before integration benefits fully accrue.
Notably, in June 2024, the company raised funds via a private placement at ₹122 per share, well below the IPO price band. While such pre-IPO funding rounds are often struck at a discount, the management will need to demonstrate that post-issue execution and earnings growth can justify the higher valuation.
The BESS foray positions Vikram to compete for higher-value solar-plus-storage tenders, but commercialising solid-state technology at scale may face cost pressures, technology hurdles and uncertain near-term uptake.
Published on August 16, 2025
