Solar component manufacturer Solex Energy Limited (SEL) has become the latest Indian renewables company to announce plans for an initial public offering (IPO) in recent months.

Regulatory documents show that the company is planning to hold the offering on Emerge, the National Stock Exchange’s (NSE) platform for small and medium enterprises.

The company has a small manufacturing capacity of 30 MW as of September, according to Mercom Manufacturing Tracker. Solex also makes distributed solar products such as solar street lighting, solar lanterns, solar water pumps, among others.

According to the company’s 2016-17 annual report, Solex reported revenues of ₹345 million (~$5.39 million) which was down about 26% from ₹466 million (~$6.97 million) from the year before. The company blamed the decline in sales on demonetization but said that due to cost cutting measures it was able to improve profit margins from ₹3.6 million (~$56,330) from the previous year to ₹9.1 million (~$142,390).

SEL is planning to issue 1,380,000 equity shares with a face value of ₹10 per share (~$0.15). The equity shares are being priced at ₹52 (~$0.81) per share and are expected to raise a total of ₹7.17 billion (~$112.16 million). The offering is set to close on January 25, 2018.

A portion of the equity shares, 72,000 are being reserved for subscription by IPO’s market maker Beeline Broking Limited. Swastika Investmart Limited has been designated as the lead manager for the issuance of the equity shares.

SEL plans to use the IPO proceeds for working capital and general corporate purpose. The company was founded in 2014 and is based in Gujarat’s Anand district.

Considering the company’s revenues last year, the valuation it is looking for is fairly steep.

SEL is the latest in a string of Indian renewables businesses that have opted for an IPO in recent months.

In December 2017, the Indian Renewable Energy Development Agency (IREDA) filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) to issue 139 million equity shares priced at ₹10 per share (~$0.16) as part of its IPO.

In October 2017, ACME Solar Holdings a project developer also filed a draft red herring prospectus with SEBI for a ₹22,000 million (~$336.86 million) IPO at a face value of ₹10 (~$0.15) per share.

Image credit: Investopedia