Upcoming IPOs: Vikram Solar, Midwest file draft papers for IPO with SEBI

Upcoming IPO: Vikram Solar Ltd and Midwest Ltd have filed their draft red herring prospectuses (DRHPs) with the capital market regulator, Securities and Exchange Board of India (SEBI), for initial public offering (IPO).

Vikram Solar IPO

Vikram Solar IPO is a combination of a fresh issue worth up to ₹1,500 crore and an offer-for-sale (OFS) of up to 17.45 million equity shares by its promoter group.

The face value of each equity share in the IPO is ₹10. The offer includes a reservation 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 consider a “pre-IPO placement” by issuing specified securities worth up to ₹300 crores.

Out of the fresh funds raised, ₹793.36 crore will be allocated for capital expenditure through investment in the 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.

Vikram Solar Limited, situated near Kolkata, is India’s top producer of solar photovoltaic modules. The company began its operation in 2009 with a production capacity of 12 MW, which increased to 3.50 GW at the time of filing the DRHP. According to a CRISIL analysis, the Ministry of New and Renewable Energy’s Approved List of Module Producers (ALMM) shows a total capacity of 2.43 GW as of July 2024, positioning the company as one of the largest non-captive producers.

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 IPO comprises a combination of fresh shares worth up to ₹250 crore and an OFS of up to ₹400 crore by promoter selling shareholders. Additionally, eligible employees have a portion reserved for them, with a discount for those bidding from the employee reservation portion. Under the OFS, shares worth up to ₹360 crore will be offloaded by Kollareddy Rama Raghava Reddy and up to ₹40 crore by Guntaka Ravindra Reddy.

The company could consider a ₹50 crore “pre-IPO placement” 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 uncertainty 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.

Midwest, headquartered in Hyderabad, explores, mines, processes, markets, distributes and exports natural stones. The company is one of India’s largest producers of black galaxy granite.

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 have grown beyond the mining and processing of granite to include heavy mineral sands, quartz extraction, and the processing of rare earth elements like titanium.

DAM Capital Advisors Ltd, Intensive Fiscal Services Private Ltd, and Motilal Oswal Investment Advisors Ltd are the book-running lead managers while KFin Technologies Ltd is the registrar to the issue.

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