INITIAL PUBLIC OFFERNING | ALPLEX SOLAR LIMITED

Summary

The ‘Alplex Solar Limited’ officially issued its Prospectus on 30th January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which has started from February 08, 2024 and closes on 12th February, 2024. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.

INITIAL PUBLIC OFFERNING | ALPLEX SOLAR LIMITED

The ‘Alplex Solar Limited’ officially issued its Prospectus on 30^th January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which has started from February 08, 2024 and closes on 12^th February, 2024. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.

ABOUT THE COMPANY

As per the details of the company present on its official website, the company was incorporated in the year as a private company with the name ‘Alplex Exports Private Limited’ and In the year 2017 company changed its name to ‘Alplex Solar Private Limited’. Subsequently, in the August 2023 the company decided to go public and changed its name to ‘Alplex Solar Limited’.

BUSINESS OPERATIONS

Alpex Solar Limited is a well-known company in the solar energy industry that specialises in producing high-quality photovoltaic modules in North India. Monocrystalline and polycrystalline solar PV modules, such as bifacial, mono perc, and halfcut modules, are among their wide variety of products. In addition to their manufacturing expertise, they provide comprehensive solar energy solutions, including engineering, procurement, and construction (EPC) services for surface and submersible AC/DC solar pumps. The firm mainly serves the B2B market and is a reliable contract manufacturer for Luminous, Jakson, and Tata Power, among other prestigious partners. The company now operate at a capacity of 450MW, with aspirations to expand to 1GW. They have a strong manufacturing plant located in Greater Noida, as well as an extensive network of offices located in other locations.

INDUSTRY RESEARCH

Globally, the solar power market is expanding significantly due to a number of causes including government subsidies, environmental concerns, and rising demand for sustainable energy sources. Leading participant in North India, Alpex Solar Limited, aims to gain from this development trajectory, with the worldwide solar power industry predicted to reach around US$ 368.63 billion by 2030. The firm is well-positioned to benefit from the growing industry thanks to its wide range of solar energy products, which include monocrystalline and polycrystalline modules as well as bifacial, mono perc, and Halfcut solar PV modules. Furthermore, Alpex Solar Limited's integrated solar energy solutions serve both B2B and B2C markets through services including engineering, procurement, and construction (EPC) for AC/DC solar pumps. The solar power sector has demonstrated resilience in the face of the COVID-19 epidemic, despite supply chain and production unit interruptions. Nonetheless, the industry's dedication to innovation and sustainability, which includes the creation of storage technologies like photovoltaic (PV), guarantees the expansion and use of solar energy solutions going forward.

COMPETITION

In a market where competition is fierce and pricing pressures can have a big effect on operations, Alpex Solar Limited works in a highly competitive sector. They compete with other solar energy firms and have to deal with issues including lower profit margins and the possibility of losing market share. For them to continue growing and be financially stable, they must be able to effectively compete and set themselves apart from rivals. Inadequate competition may have a significant negative impact on our operations, financial health, and company.

BOARD OF DIRECTOR AND PROMOTERS OF THE COMPANY

The company’s management includes the following members-

01.  Ashwani Sehgal as Managing Director and Director of the company.

02.  Aditya Sehgal as Non-Executive Director of the company.

03.  Deepak Verma, Indrajeet S Khanna as Independent Directors of the company.

04.  Monica Sehgal acting as Whole-time Director of the company.

05.  Vipin Sehgal acting as an Executive Director of the company.

PROMOTER HOLDING

Mr. Ashwani Sehgal, Mrs. Monica Sehgal, Mr. Vipin Sehgal, Mr. Aditya Sehgalare are the company's promoters. Their corporate promoter includes Krishma Machine Tools Private Limited. The shareholding of the company is mentioned in the given chart.

KEY FINANCIAL DETAILS OF THE COMPANY

In the fiscal year 2022-23, the Company has achieved a noteworthy revenue from its operations of Rs. 19,468.01 (in Lakhs), and generated a revenue of Rs. 21,276.36 (in Lakhs) till 30^th September, 2023. While securing a profit of Rs. 378.62 (in Lakhs) for the year 2022-23. For the period ending 31 March, 2022 the company has earned a profit of Rs. 20.07 (in Lakhs). And till 30 September, 2023 the company has earned a profit of Rs. 759.92 (in Lakhs).

To make a wise investment choice, we will delve into various financial ratios for a comprehensive assessment of the company's financial condition and performance.

DETAILS OF THE IPO

Alpex Solar Limited intends to commence its book-built issuance of Rs 74.52 crores as part of its initial public offering (IPO). The 64.8 lakh shares offered in the IPO are all newly issued shares.The minimum lot size for the IPO is 1200 shares, and the price range is established at ₹109 to ₹115 per share. HNIs must apply for a minimum of 2 lots (2,400 shares), or ₹276,000, while retail investors must deposit a minimum of ₹138,000. Each share has a face value of ₹10. Alpex Solar Limited's ownership will rise from 17,993,400 shares before to the offering to 24,473,400 shares following the issuance. Furthermore, 324,000 shares, or a market maker percentage, are set aside for the IPO.

Some Important details with respect to the Application Size for Qualified Institutional Bidder and Non-Institutional Investor has been Summarised in the following table:

OBJECTIVES OF THE IPO

The objective of the issue of the IPO is for (i) Funding Capital Expenditure for upgradation and expansion of the existing solar module manufacturing facility by increasing 750 MW; (ii) Funding Capital Expenditure towards setting up of a new manufacturing unit for Aluminum frame for the solar module; (iii) meeting the general corporate expenses of the company; (iv) To Meet Working Capital requirements of the Company.

RISKS INVOLVED

Potential investors should think about the following risks while investing in Alpex Solar Limited:

• Legal and Tax Risks: If the Delhi High Court finds against the corporation in the pending criminal revision case pertaining to suspected tax cheating, there might be negative legal and financial ramifications.
• Risks associated with business development: Competitive bidding procedures may make it difficult for the firm to win solar water pump EPC contracts, which is essential to its expansion. Losing bids might prevent a company from growing.
•  Financial Reporting Risks: There is a chance that restated financial statements include errors or inconsistencies if peer-reviewed chartered accountants are used instead of statutory auditors.
•  Weather Dependency: Unfavourable solar weather conditions have the potential to negatively impact revenue and sales, underscoring the business model's susceptibility to outside influences.
• Capital Expenditure Risks: Plans for growth and financial performance may be impacted if there are delays or cost overruns in the purchase of machinery and equipment for the projected aluminium factory.
•  Risks associated with customer dependence: A sizable amount of income comes from a select group of very important clients, most notably Luminous Power Technologies Private Limited. The loss of these important clients' business might have a negative impact on profitability.
• Geographic Concentration Risks: Because of its strong reliance on Uttar Pradesh for income, the corporation is at risk from unfavourable events in the start.
• Legal Liability Risks: Consumer court lawsuits, like the one pertaining to warranty issues that was previously discussed, may harm the company's standing with customers and reduce their trust, which may have an effect on future sales.
• Competitive Risks: The fierce rivalry in the solar sector might put pressure on prices, cut profit margins, or result in market share losses, all of which could negatively impact financial performance.
•  Compliance Risks: Investor trust may be jeopardised if secretarial records with the Registrar of Companies (ROC) are not updated or readily available. This raises questions about regulatory compliance and transparency.

ANALYSIS AND RECOMMENDATION

The initial public offering (IPO) of Alplex Solar Limited is a strong chance for investors, supported by a well-thought-out expansion strategy and strong financial results. Formerly called Alplex Exports Private Limited, the business has made a name for itself in the solar energy sector by specialising in premium photovoltaic modules and all-inclusive solar energy solutions. Potential investors should take into account a number of IPO-related risks, though. The company's financial viability is seriously threatened by legal and tax issues arising from an ongoing criminal revision case, difficulties in securing bids for solar water pump EPC contracts, and reliance on a small number of important clients like Luminous Power Technologies Private Limited. Investor trust may also be impacted by regional concentration risks in Uttar Pradesh and compliance issues with secretarial documents. The IPO of Alplex Solar Limited presents a chance to participate in a respectable business with promising development potential in the fast-paced solar energy industry, notwithstanding these dangers. Before making an investment, investors should perform extensive due research and balance the possible dangers against the lucrative rewards.

IMPORTANT DATES