PMEA Solar Tech Solutions, a prominent player in solar tracking mounting systems, has filed its draft papers with the Securities and Exchange Board of India (Sebi) to raise capital through an initial public offering (IPO). The IPO comprises a fresh issue of shares totaling up to ₹600 crore, along with an offer for sale (OFS) by existing promoters. The company, founded in 2006, specializes in solar mounting equipment and boasts a strong revenue growth trajectory. Proceeds will be directed towards facility expansions, debt repayment, and general corporate purposes, positioning PMEA Solar for accelerated growth in the renewable energy sector.

PMEA Solar Tech Files for ₹600 Crore IPO

IPO Structure:
PMEA Solar Tech Solutions, based in Mumbai, has filed preliminary documents with Sebi for an upcoming IPO. The offering consists of a fresh issue worth up to ₹600 crore and an offer for sale (OFS) of 1.12 crore equity shares by the company's promoters. According to the draft red herring prospectus (DRHP), the company may also raise ₹120 crore through a pre-IPO placement, which would reduce the size of the fresh issue.

Capital Allocation Strategy:
PMEA intends to allocate ₹119.55 crore from the IPO proceeds towards the establishment of new manufacturing facilities via its wholly owned subsidiary, PMSS. Additionally, ₹120.45 crore will be used to acquire machinery and equipment, while ₹240 crore is earmarked for debt repayment. The remaining funds will be utilized for general corporate purposes.

Expansion Plans and Manufacturing Capabilities

Existing Manufacturing Footprint:
Founded in 2006, PMEA Solar Tech Solutions is renowned for its solar tracking mounting systems and equipment. As of March 2024, the company has an annual installed capacity of 16 gigawatts (GW) of module mounting assembly and 6 GW of rolled products. It operates 11 manufacturing plants across Maharashtra and Gujarat, reflecting its extensive domestic presence.

New Facilities and Global Expansion:
PMEA is further expanding its manufacturing base. In August 2024, the company will begin trial production at its newly established plant in Pimpalnare, Nashik, and a manufacturing facility in Ohio, USA. Moreover, two additional manufacturing units are under construction: one near Nashik and another in Pune, highlighting PMEA’s aggressive expansion strategy.

Impressive Financial Growth

Revenue Surge in FY24:
PMEA Solar’s revenue from operations surged 87.34% in FY24, climbing to ₹1,500.20 crore from ₹800.79 crore in the previous financial year. This significant growth underscores the company’s expanding market reach and its ability to scale operations in the renewable energy sector.

Profitability Boost:
The company's profit after tax also saw a remarkable increase, rising to ₹103.64 crore in FY24 from ₹27.44 crore in FY23. This exponential profit growth reflects PMEA’s strong operational efficiency and profitability amidst its rapid expansion.

Lead Managers and Future Prospects

Lead Managers for the IPO:
IIFL Securities and ICICI Securities have been appointed as the book-running lead managers for the IPO, indicating strong institutional support for the offering.

Positioning for Future Growth:
With robust financials, expanding manufacturing capacities, and a growing global presence, PMEA Solar Tech is well-positioned to capitalize on the accelerating demand for renewable energy solutions. The funds raised through the IPO will be pivotal in enabling the company to scale further and solidify its leadership in the solar energy industry.