Indian solar panel makers plan to raise Rs 5,800 crore this year

Indian solar panel makers in a fundraising frenzy

At least three independent solar module makers plan to raise as much as Rs 5,800 crore this year to expand production as India aims to achieve 500 gigawatts (GW) of non-fossil fuel energy capacity by 2030.

Mumbai-based Waaree Energies filed draft papers for an initial public offering in December to raise Rs 3,000 crore to meet capex requirements. Other solar module makers that have kicked off fundraising efforts include Hyderabad-based Premier Energies and Kolkata-based Vikram Solar, people aware of the developments told Moneycontrol.

Premier Energies has appointed a foreign investment bank to help raise as much as Rs 2,000 crore, most likely through an IPO, the people said. Vikram Solar is in talks to raise Rs 600 crore-800 crore in a pre-IPO round from family offices and high net worth individuals.

“A few smaller manufacturers with less than 1 GW module manufacturing capacity have also held talks with investment banks to gauge the possibility of raising capital through IPOs,” one person said.

Massive domestic demand, government support for local manufacturing through productivity-linked incentive (PLI) schemes, and duties on cheap imports from countries including China are providing strong tailwinds for domestic solar module makers, the person said.

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"The strong momentum in the IPO markets is attracting these companies to meet their capital needs,” the person added.

Emails sent to Premier Energies and Vikram Solar did not elicit a response.

Capacity expansion

Apart from adding solar panel manufacturing capacity, these companies are looking at producing cells, wafers and ingots under the central government’s production linked incentive schemes.

Waaree, the largest manufacturer of solar modules in India with an installed capacity of 12 GW, plans to use Rs 2,500 crore of the proposed IPO proceeds to part-finance the establishment of a 6 GW ingot wafer, solar cell and PV module manufacturing facility in Odisha.

Also read: Waaree Group aims to raise Rs 2,000 crore through IPO: CMD Hitesh Doshi

Premier Energies increased its operating capacity to 2.7 GW of modules and 2 GW of solar cells as of December 31 from 1.05 GW of module capacity and 0.75 GW of cell capacity a year ago, according to a report by rating company Crisil. As per the report, Premier is working on expanding its capacity to 3.7 GW of module capacity and 3 GW of cells by FY25.

Vikram Solar has an installed capacity of 3.5 GW for solar modules. Last year, it received government approval to set up 2.4 GW of cell and module capacity under the PLI scheme.

PLI scheme for solar value chain

To reduce India’s dependency on imported solar components, the central government allocated a total capacity of 39,600 megawatts (MW) of domestic solar PV module manufacturing capacity to 11 companies, with a total outlay of Rs 14,007 crore under the PLI scheme in 2023.

Under the scheme, 15,400 MW capacity was awarded for the polysilicon, wafers, cells and modules basket. Of this, 6,000 MW was awarded to Indosol, 6,000 MW to Reliance, and 3,400 MW to First Solar.

Under the wafers, cells and modules basket, 16,800 MW of manufacturing capacity was awarded. Of this, 6,000 MW was awarded to Waaree, 3,000 MW to Avaada, 4,800 MW to ReNew, 1,000 MW to JSW, and 2,000 MW to Grew.

For the cells and modules basket, 7,400 MW of capacity was awarded. Vikram Solar was awarded 2,400 MW, 1,000 MW was awarded to AMPIN, and 4,000 MW was awarded to Tata Power Solar.

The scheme is expected to bring in investments of Rs 93,041 crore, as per government estimates.