PMEA Solar Tech Solutions IPO

About PMEA Solar Tech Solutions Limited IPO

PMEA Solar Tech Solutions Limited IPO is an IPO of TBA. It consists of an offer for sale of up to 11,235,600 equity shares and a fresh issue aggregating up to ₹600 crore. The shares will be allotted on TBA. The credit of shares to the demat account will take place on TBA, and the initiation of refunds will take place on TBA.

Objective of PMEA Solar Tech Solutions Limited IPO

• Funding capital expenditure for the setting up of certain manufacturing facilities undertaken through investment in their wholly owned subsidiary, PMSS.
• Funding of capital expenditure requirements of the company towards the purchase of machinery/equipment.
• Repayment or prepayment, in full or in part, of all or a portion of certain outstanding borrowings taken by the company and investment in their wholly owned subsidiaries, PMSS and Tapovan, for repayment or prepayment in full or in part, of all or a portion of certain outstanding borrowings taken by PMSS and Tapovan.
• General corporate purposes.

Industry Outlook

India's power sector is undergoing a major transformation, driven by urbanisation, industrial expansion, and the increasing integration of renewable energy. This is fueling significant growth in the switchgear market, which was valued at USD 1200 crores in FY2024 and is projected to reach USD 1800 crores by FY2029E.

Solar capacity surged at approximately 24% CAGR to exceed 1,419 GW. In CY2023, global annual renewable capacity additions rose by 56% to nearly 475 GW, the highest growth in two decades. In India, renewables accounted for ~24% of electricity generation in FY2024 (up to February 2024). The Indian government aims to meet 50% of the country's energy needs with renewables by CY2030, as stated during COP-26.

Here's a quick overview of the different sectors that utilise solar tech solutions:

India's market for solar tracking and mounting products used in tracker systems exhibits a distinct trend. The market initially demonstrated an upward trend from US$ 22 crores in fiscal 2019 to US$ 81 crores in fiscal 2024, growing at a CAGR of 29%. This positive trend is expected to continue, with projections estimating the market to reach US$ 342.9 crores by fiscal 2029, growing at a CAGR of 33%.

India's automotive component industry is poised for substantial growth, projected to reach a market size of USD 20000 crores by FY2029E.

The Indian lighting industry is set for substantial growth, projected to reach USD 47 crores by FY2029E from USD 36 crores in FY2024, with a CAGR of 5.2%.

The Indian furniture market is forecasted to emerge as a significant industry, generating USD 510 crores in revenue by FY2024. It is expected to sustain steady growth, with a projected CAGR of 6.7% from FY2024 to FY2029E.

The electric vehicle (EV) market in India is undergoing remarkable expansion, driven by a confluence of factors. Starting from 145,989 units sold in FY2019, the market experienced a substantial increase in FY2024, reaching an impressive 0.17 crore units.

Company Information

PMEA Solar Tech Solutions Limited has established itself as a leading manufacturer of solar tracking and module products (Source: F&S Report) with the capability to manufacture a wide range of stock-keeping units (SKUs). As of March 31, 2024, they offered 72 SKUs within their solar business, which includes 56 SKUs of module mounting assembly and 16 SKUs of rolled products.

They also manufacture a wide range of components for switchgears; (ii) components for original equipment manufacturers (“OEMs”) in the automotive sector; (iii) lighting solutions; (iv) furniture primarily for large OEMs; and (v) partition panels primarily for pharma, and the healthcare sector.

Risks of PMEA Solar Tech Solutions Limited IPO

• Their business is dependent on certain key customers, in particular, Nextracker LLC. Loss of any of these customers or inability to continue their existing relationships with key customers could have an adverse effect on their business, results of operations, financial condition, and cash flows.

• Their business is significantly dependent on the regulatory and policy environment affecting the solar energy sector in India and the countries to which they export their products.

• They are dependent on third-party vendors for the supply of raw materials to manufacture their products. Any disruptions in the supply or availability of materials and components of the appropriate quality standards or fluctuations in their prices may have an adverse effect on their business, results of operations, and financial condition.

Anchor Investor Information

The Anchor Investor Bidding Date shall be one working day prior to the bid/offer opening date.

IPO Registrar and Book Running Lead Managers

Book running lead managers:

IIFL Securities Limited ICICI Securities Limited

Registrar for the IPO is Link Intime India Private Limited

Business Model

The company earns its revenue through the following sources:

• Manufacturing a wide range of solar tracking and mounting products, which include (i) module mounting assembly and (ii) rolled products, which are used in utility-scale and ground-mounted solar power projects.

• Manufacturing a wide range of (i) components for switchgear (ii) components for original equipment manufacturers (OEMs) in the automotive sector; (iii) lighting solutions; (iv) furniture primarily for large OEMs and (v) partition panels primarily for pharma, and healthcare sector.

Company Growth Trajectory

During the last three fiscals, on account of the increase in their installed capacity and actual production resulting in an increase in their solar business revenues, their revenue from operations increased at a CAGR of 63.89% to ₹1500.20 crores in fiscal 2024 from ₹558.54 crores in fiscal 2022. Their Operating EBITDA increased at a CAGR of 88.50% from ₹58.93 crores in fiscal 2022 to ₹88.72 crores in fiscal 2023 and further increased to ₹209.39 crores in fiscal 2024, while their Operating EBITDA Margin improved from 10.55% in fiscal 2022 to 11.08% in fiscal 2023 and further improved to 13.96% in fiscal 2024.

Their revenue from operations from other businesses grew at a CAGR of 28.95% between fiscal 2022 and fiscal 2024 to ₹311.33 crores in fiscal 2024 from ₹187.177 crores in fiscal 2022.

Company Market Position

They are among the leading manufacturers in the solar tracking and mounting products sector in India with an annual installed capacity of 16 gigawatts (GW) of module mounting assembly (Module Mounting Assembly) and 6 GW of rolled products (Rolled Products), as of March 31, 2024.

As of March 31, 2024, they had an estimated market share of 9% of the overall domestic market for solar tracking and mounting products used in solar trackers.

Between October 2019 and April 2024, PMEA Solar Tech Solutions Limited completed over 200 shipments to Nextracker LLC, positioning itself as the fourth-largest supplier to the company. They achieved revenue from operations of INR 1500.2 crores in FY2024, reflecting its strong market position.

How To Check Allotment Status of PMEA Solar Tech Solutions Limited IPO?

You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar Link Intime India Private Limited. To check the status on the BSE website:

• Visit the BSE website
• Click on “Investor Services” and choose “Application Status Check”
• Choose the issue type — Equity or Debt (Equity in this case)
• Select the issue name from the drop-down. The issue name is the company’s name, which is PMEA Solar Tech Solutions Limited
• Enter your application number or PAN number
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

• Visit the Link Intime India Private Limited website
• Choose “Public Issues” from the “Investor Services” drop-down
• Select PMEA Solar Tech Solutions Limited from the drop-down
• Enter your PAN number or Application number
• Click on “Submit” to know the allotment status