Upcoming IPO: Vikram Solar Ltd and Midwest Ltd has filed its draft red herring prospectus (DRHP) with the capital market regulator, Securities and Exchange Board of India (SEBI), for an initial public offering (IPO).

India’s top producer of solar photovoltaic modules is Vikram Solar Limited, situated near Kolkata. When the DRHP was filed, the company’s production capacity had increased from 12.00 MW when it started in 2009 to 3.50 GW. The Ministry of New and Renewable Energy’s Approved List of Module producers (ALMM) lists 2.43 GW of capacity as of July 2024, making the firm one of the greatest capabilities among non-captive producers, according to a CRISIL analysis.

Vikram Solar is targeting an IPO that will involve issuing fresh shares worth up to ₹1,500 crore and offering for sale up to 17.45 million equity shares by its promoter group.

The face value of each equity share in the IPO is ₹10, and there is a provision for eligible employees with a discount for those participating in the employee subscription segment. Additionally, the company, in consultation with the book-running lead manager, may also contemplate a “pre-IPO placement” by issuing specified securities worth up to ₹300 crore.

The proceeds from the new issuance will be used as follows: ₹793.36 crore will be allocated for capital expenditure by investing in its wholly owned subsidiary, VSL Green Power Private Ltd, to establish a 3,000 MW solar cell and module manufacturing facility. Furthermore, ₹602.95 crore will be designated for the expansion of the current solar module manufacturing facility from 3,000 MW to 6,000 MW, in addition to funds for general corporate purposes.

The IPO’s book-running lead managers are Nuvama Wealth Management and others, and the registrar is Link Intime India Private Ltd.

Midwest IPO

Midwest, with its headquarters in Hyderabad, is a company that explores, mines, processes, markets, distributes, and exports natural stones.Between FY22 and FY24, the Midwest extracted 1.37 million cubic meters of granite on average per year, including waste and marketable granite. Over forty years, the company’s operations grew beyond the mining and processing of granite to include heavy mineral sands, quartz extraction, and the processing of rare earth elements like titanium.

The IPO comprises a combination of fresh shares worth up to ₹250 crore and an offer for sale (OFS) of up to ₹400 crore by Promoter Selling Shareholders. Additionally, eligible employees have a reservation for subscription and are being offered a discount when bidding in the employee reservation portion. The offer for sale includes up to ₹360 crore by Kollareddy Rama Raghava Reddy and up to ₹40 crore by Guntaka Ravindra Reddy.

The company could think about a ₹50 crore “pre-IPO placement” if it issues specific securities after consulting with the book-running lead manager. Once this placement is finished, the size of the fresh issue will be reduced.

The company plans to use the net proceeds from the new issuance as follows: ₹127.05 crore for funding capital expenditure by Midwest Neostone Private Ltd, its wholly owned subsidiary; ₹25.75 crore for capital expenditure for purchasing electric dump trucks; ₹3.26 crore for capital expenditure for integrating solar energy at certain mines of the company; ₹53.80 crore for pre-payment/re-payment of outstanding borrowings; and for general corporate purposes.

Book-running lead managers DAM Capital Advisors Ltd, Intensive Fiscal Services Private Ltd, and Motilal Oswal Investment Advisors Ltd, along with issue registrar KFin Technologies Ltd, are in charge of the issue.

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