GP Eco Solutions | GPES Solar IPO (SME) Overview

 
GP Eco Solutions India is an integrated solar energy solutions provider, Noida-headquartered company distributes a wide range of solar inverters and solar panels and also provides EPC services to commercial and residential customers and O&M of solar plants. GPES Solar IPO is set to raise Rs 30.79 crores. The issue is entirely a fresh issue of 32.76 lakh shares.

IPO opensJune 14, 2024
IPO ClosesJune 19 2024
IPO Size (Rs.)₹30.79 Cr
IPO Size (shares)3,276,000 shares
BreakupFresh issue only
Face Value:₹ 10
IPO Price in Rs :₹90 to ₹94 per share
Minimum Lot1200 Shares
Listing AtNSE SME
QIB ~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerCorporate Capitalventures Pvt Ltd
RegistrarBigshare
Market maker Ss Corporate Securities.

About GP Eco Solutions | GPES Solar :

  • GP Eco Solutions India Limited, originally founded as GP Eco Solutions India Private Limited on July 30, 2010, transformed into a public limited company in November 2023.
  • The company is a key player in the solar energy industry in North India.
  • It is known for its distribution of solar inverters and solar panels and operates as an authorised distributor for Sungrow India Pvt Ltd, Saatvik Green Energy Private Limited, and LONGi Solar Technology Co. Ltd.
  • GP Eco Solutions excels in providing integrated solar energy solutions, primarily focusing on engineering, procurement, and cons small portion of Construction (EPC) services tailored to both commercial and residential sectors.
  • EPC constitutes a smaller portion of its business compared to distribution,
  • Under its proprietary brand, Invergy, GP Eco Solutions specialises in the manufacture and distribution of hybrid solar inverters and lithium ferro phosphate (LFP) batteries.
  • Further the company provides comprehensive operation and maintenance services for its constructed solar plants, ensuring long-term functionality and efficiency.

Financials: GP Eco Solutions | GPES Solar IPO

Particulars/ Rs Lacs9m Dec 20232022-232021-222020-21
Revenue (total income)7858.8810447.638352.994652.91
Profit after Tax473.27369.82277.1796.94
Share Capital720202020
Net Worth1,298.08824.81454.98177.81
Earnings per share Basic and Diluted6.575.143.851.35
Net Asset Value19.3311.466.322.47
Total borrowings
– Long Term251.3693.6110.37115.2
– Short Term1293.431222.92407.18236.17
Post issue Share Capital1171   
FV10.0   
IPO price94.0   
EPS Fy233.2   
PE Fy2329.8   
EPS Fy24 (annualized)5.4   
PE Fy24  (annualized)17.4   
Market cap in Lacs11,007   
Market cap / Sales1.05   

GP Eco Solutions | GPES Solar IPO

Anchors: GP Eco Solutions | GPES Solar IPO

GP Eco Solutions | GPES Solar IPO: Salient Points

  • The Solar Inverter is an important device in the solar system, which converts the direct current flowing out of the solar panel into an alternating current.
  • The India – solar power market size is estimated to grow at a CAGR of 34.24% between 2022 and 2027.
  • The Net Proceeds are proposed to be utilized in the manner set forth below:
Sr. NoParticularsAmount
1.To Meet Working Capital requirements of the Company “GP Eco Solutions”1245.00
2.Investment in our subsidiary, Invergy India Private Limited (“IIPL”) in relation to Purchase of Plant & Machineries and other Miscellaneous Assets; and towards Construction / Civil Works760.00
4.General Corporate Expenses *[●]
  • Their subsidiary company, Invergy India Private Limited, is importing ready-to-use hybrid solar inverters and lithium ferro phosphate batteries from China and India, selling them under the own brand name “Invergy”. With the view to expand the business operations and achieve backward integration, “IIPL” is planning to import the solar inverters in SKD (Semi Knocked Down) form and establish an in-house assembly unit under the Invergy brand.
  • The company generates around 15% revenue on own brands and the rest from third party brands.
  • Almost all of its sales is derived from B2B sales (99.9% ). 
  • Peers:
Company/ FY24 figuresCMP Rs.Revenue Rs. CrNet Profit Rs. CrNPM (%)PEMacp/salesRonw(%)
GP Eco Solutions India Limited70104.473.73.5%17.41.0557.79%
Sungarner Energies Limited42417.650.744.2%94.55.4723.18%
  • Company is mainly North India based and earns a significant portion of our revenue from the states of Rajasthan, Haryana, Uttar Pradesh, and Delhi (75%)
  • As of March 2024, GP Eco Solutions had order book of 27Cr with a 12Cr order from Oriana Power.
  • Company, trades in products viz. Solar Inverters, Solar Panels, Energy Storage Solutions, and Solar Power Generating Systems. Out of this Significant portion of revenues is dependent upon sale of Solar Inverters.
  • GP Eco Solutions revenue was up by 25% and profit after tax rose by 33% between the financial year ending March 31, 2023 and March 31, 2022.
  • From FY21 to FY23, Revenue has Increased from Rs.46 Crores in FY21 to Rs.101 Crores in FY23, EBITDA from 1.8 Crore in FY21 to 6.6 Crores in FY23 and Net profit has Increased from 97 Lakhs to 3.7 Crores in this period.
  • GP Eco Solutions | GPES Solar IPO is coming at a PE ratio of 30x (FY23 Earnings) and 17.4x (fy24 annualized earnings).
  • I intend to apply in GP Eco Solutions | GPES Solar IPO subject to availability of funds. India is likely to add 30-35 GW renewable capacity in FY 25. While presently it derives most of the revenues from sale of inverters & solar panels and we presume EPC activity is small, this too can scale up in future. Issue is likely to witness record subscription.
  • GMP as reported on social media has been Rs. 168 (178%)).
  • Corporate Capitalventure is the Lead Manager with a good record. Past issues handled by them include Creative Graphics Solutions India Limited, Trust Fintech Limited, Esconet Technologies, Alpex Solar Limited, Accent Microcell Limited, Rockingdeals Circular Economy, Oriana Power Limite, Crayons Advertising Limited, Droneacharya Aerial Innovations Limited, Annapurna Swadisht Limited, Rajnandini Metal Limited, Swastik Pipe Limited, Uma Exports Limited, Phantom Digital Effects Limited, Nupur Recyclers etc.
  • Ekadrisht Capital Private Limited, the 2nd lead manager has a fair but limited record. Past issues handled by them include Indian Emulsifier Limited.
  • SME IPOs are quite volatile and new retail investors need to exercise considerable caution in my view.
  • This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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