Avaada Electro files UDRHP for proposed Rs 7,600 crore IPO
Avaada Electro Limited has filed its Updated Draft Red Herring Prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI), advancing its proposed initial public offering of up to Rs 7,600 crore. The solar cell and module manufacturer plans to raise up to Rs 1,600 crore through a fresh issue of shares, while promoter Avaada Ventures Private Limited will offer shares worth up to Rs 6,000 crore through an Offer for Sale (OFS).
The proposed listing comes amid challenging market conditions for solar manufacturing companies. Industry sources indicate that stress among manufacturers whose cell production capabilities are not yet operational, along with the implementation of ALCM provisions in June and their subsequent relaxation until December, has weighed on sector sentiment. Geopolitical developments in the Gulf, rising oil prices and restricted access to US markets for Indian imports have added to the pressure.
Vikram Solar, the last major solar manufacturer to list, has seen its stock trade below its offer price. The company is relying on the commencement of its cell manufacturing operations to support a recovery.
IPO proceeds
Of the proceeds from the fresh issue, approximately Rs 1,200 crore will be used to repay or settle borrowings and letter-of-credit obligations. The remaining proceeds will be allocated towards general corporate purposes.
The Rs 6,000 crore OFS component represents the promoter’s plan to monetise investments made during Avaada Electro’s manufacturing scale-up.
Avaada’s existing cell manufacturing capacity is also positioning the company for a potential valuation premium over pure module manufacturers, according to market observers. Pure module players currently trade at 10-12 PE multiples, while integrated cell and module manufacturers command higher multiples in the range of 18 and above. The higher multiples are driven by better margins from modules meeting Domestic Content Requirement (DCR) specifications.
Green industrial campus
Separately, Avaada Group has signed a Memorandum of Understanding (MoU) with the Haryana Enterprises Promotion Centre (HEPC) to develop a 300-acre green industrial campus in Hisar, with an estimated investment of approximately Rs 100 billion.
The campus will be powered by round-the-clock renewable energy and is intended to support industries seeking to decarbonise their operations and meet evolving carbon and sustainability requirements, including the Carbon Border Adjustment Mechanism (CBAM).
Financial closure
Earlier this month, Avaada Group achieved financial closure of approximately $1.3 billion for a 2,150 MW renewable energy portfolio. Financing was sanctioned by the State Bank of India, REC Limited and Canara Bank across four special-purpose vehicles.
Avaada currently operates 8.5 GW of solar module manufacturing capacity and 3 GW of TOPCon solar cell capacity.
The group plans to expand into a fully integrated manufacturing business covering ingots, wafers, cells and modules. By FY28, it is targeting 13.6 GW of module capacity, 12 GW of cell capacity and 3 GW of ingot and wafer capacity, positioning itself among India’s leading manufacturers.
The featured photograph is for representation only.
