Avaada Electro Limited IPO

01At a glance

What the company does: makes solar modules, and now the TOPCon solar cells that go into them, at plants in Nagpur and Dadri; module capacity is 8.50 GW, and cell capacity 3.00 GW with another 3.00 GW being commissioned (AP p.3).

Who pays it: overwhelmingly Avaada Energy, a group company that builds renewable power projects: 99.74% of revenue in FY25 and 89.34% in FY26 (DRHP p.36).

Why it is raising money: ₹12,000 million of the fresh issue repays borrowings and letters of credit, the rest goes to general purposes, and the ₹60,000 million offer for sale goes to the promoter company (AP p.6, AP p.1).

How fast it has grown: from no revenue in FY24 to ₹9,116 million in FY25 and ₹53,035 million in FY26, as module capacity went from nil to 8.50 GW (AP p.3, AP p.8).

The one thing to understand: this company was built by its group, sells mainly to its group, and is funded partly by its group. The promoter company built the plants as EPC contractor, lends the company ₹5,290.52 million, guarantees ₹63,670 million of its debt, and has pledged 51% of its shares to the company's bank; it is now selling ₹60,000 million of shares (AP p.9, DRHP p.63).

02The business, in plain words

A solar module maker buys cells, glass, frames and other materials, assembles them into panels, and sells panels by the watt to companies building solar power plants. Making the cells as well keeps more of the value in-house and qualifies the product for government lists that favour domestic content.

A solar-farm developer needs panels → it orders from Avaada Electro under a framework agreement → the company makes TOPCon cells and assembles modules in Nagpur or Dadri → it ships them and is paid per watt, often with advance payments from the buyer.

The modules are sold under the "Avaada Electro, Enlume and Integlow" brands (AP p.3). The company is on List I of the government's approved list of models and manufacturers, which allows its modules in government and government-assisted projects (AP p.3). A third facility would take annual capacity to 13.60 GW (AP p.3).

Earnings equation: Revenue ≈ gigawatts shipped × price per watt. In FY26 the company produced 3.77 GW of modules (AP p.8).

03Where the money comes from

Source: DRHP p.36.

The company had no revenue in FY24 (AP p.8). Its order book was 19,106.22 MW at March 2026, against 2,555 MW a year earlier (AP p.8). It has booked no revenue yet from retail or export sales (DRHP p.64). Framework agreements with Avaada Energy underpin the order book, and advance payments from Avaada Energy have funded much of its working capital (AP p.3, DRHP p.38).

04The growth record

Source: AP p.8, AP p.9.

Source: AP p.8. Utilisation is measured on effective capacity, as the document defines it.

Net cash generated from operating activities was ₹714.76 million in FY24, ₹5,320.04 million in FY25 and ₹799.99 million in FY26 (DRHP p.403).

05What the growth is made of

All of it is new capacity. The company had no operating plant in FY24; module capacity reached 1.50 GW in FY25 and 8.50 GW in FY26 (AP p.8). FY24's profit of ₹225.62 million came with no revenue, from other income (AP p.8).

Utilisation fell from 83.18% to 62.31% as capacity was added faster than production (AP p.8). EBITDA margin was 26.51% in FY25 and 23.74% in FY26 (AP p.8). The document credits government policy, duties on imports and domestic-content rules, for part of the economics of both the company and its main customer, and lists changes to those policies as a risk (DRHP p.54).

06Earnings quality

The customer is the parent group. With 89.34% of FY26 revenue from Avaada Energy, sales volumes and prices are set largely within the group, under framework agreements (DRHP p.36, AP p.3). The document states its top ten suppliers are not related to the group (DRHP p.54).

Return on equity of 81.51% in FY26 reflects a small equity base against a large first full year (AP p.9). Net working capital rose from ₹979.14 million to ₹10,970.89 million in FY26 (AP p.9).

In FY26 the company put ₹23,202.08 million into short-term debt mutual funds and redeemed ₹22,736.71 million, which the document flags as credit risk (DRHP p.67).

07The balance sheet

Source: AP p.9, DRHP p.40, DRHP p.47.

Total borrowings reached ₹39,263.98 million by 30 June 2026 (DRHP p.49). Of these, ₹5,290.52 million are unsecured loans from the promoter company at 8.15% and 8.65%, repayable after eight years, with interest accruing unpaid (AP p.9, AP p.10). The promoter company also guarantees ₹63,670 million of the company's borrowings (AP p.9). Contingent liabilities were ₹1,367.41 million of bank guarantees at March 2026 (DRHP p.93).

Our arithmetic: net debt of ₹23,497.57 million at March 2026 was 1.9 times the FY26 EBITDA of ₹12,588.60 million (AP p.8, AP p.9).

08What the money is for

Source: AP p.6, DRHP p.128.

The borrowings to be repaid are from State Bank of India and financed the plants; part of them paid the promoter company for its EPC work on the plants (AP p.9). A pre-IPO placement of up to ₹3,200 million may reduce the fresh issue (AP p.6). The offer is made under Regulation 6(2), as the company does not meet Regulation 6(1)(a) and 6(1)(b) (AP p.1).

09Who is selling

Source: AP p.1, AP p.11.

The offer for sale is almost four times the fresh issue, so most of the money raised goes to the promoter company (AP p.1). The document lists as a risk that the promoter is selling ₹60,000 million of shares while it has ₹5,290.52 million of loans outstanding to the company (DRHP p.39).

10Promoters

The promoters are Vineet Mittal, chairman and whole-time director; Sindoor Vineet Mittal, vice-chairperson; and Avaada Ventures Private Limited (AP p.5, AP p.6). The board has six directors, three of them independent (AP p.11).

The group ties run through every part of the business. Avaada Ventures built the Nagpur and Dadri facilities on contract: the company had paid it ₹16,787.75 million for capital goods and ₹15,671.54 million for EPC work by March 2026 (AP p.9). The company does not own the "Avaada" trademark and logo (DRHP p.41). The document says the promoters have limited experience of operating in solar manufacturing (DRHP p.48).

11Who already owns it

The promoter company owns 100% before the offer, with six individuals holding shares as its nominees or jointly with it (AP p.7). The company has seven shareholders in all (AP p.7). Of the promoter's shares, 786,572,547 to 51% of the pre-offer capital, are pledged to SBICAP Trustee for the State Bank of India loans that the proceeds will repay (DRHP p.63).

12What changed just before the IPO

• Split and bonus: shares were split from ₹10 to ₹5 face value and a bonus issue of 0.95 shares for each share followed, both approved on 30 September 2025 (DRHP p.141).

• Borrowing: borrowings went from ₹3,925.25 million in FY24 to ₹30,647.75 million in FY26 and ₹39,263.98 million in June 2026 (DRHP p.47, DRHP p.49).

• Capacity: 3.00 GW of cell capacity became operational and another 3.00 GW is due within the September 2026 quarter (AP p.3).

• Public company: converted from a private limited company in September 2025 (DRHP p.515).

• Last allotment before the IPO: 721,312 shares to Avaada Ventures Private Limited at ₹1,525.00 a share in September 2025, before the split and bonus (DRHP p.120).

• Promoter pay: chairman and whole-time director Vineet Mittal is entitled to ₹1.00 a year, and vice-chairperson Sindoor Vineet Mittal to no remuneration (DRHP p.40).

• Auditors: Kailash Chand Jain & Co. resigned in April 2025 and Deloitte Haskins & Sells was appointed to fill the casual vacancy the same month (DRHP p.102).

13Capacity and expansion

Source: AP p.3.

Capacity utilisation was 62.31% in FY26 on the document's effective-capacity basis (AP p.8). The document lists under-use of capacity, and the difficulty of building new plants on time, among its risks (DRHP p.45, DRHP p.60).

14Market size and industry structure

India's installed renewable capacity, including large hydro, grew from 114 GW in FY18 to 275 GW in March 2026, according to the CRISIL report cited in the offer document (AP p.5). The government target is 500 GW of non-fossil capacity by 2030 (AP p.5). CRISIL expects investment in power generation to rise to ₹27 to 32 trillion over FY27 to FY31, more than half of it in renewables (DRHP p.171). Those are CRISIL's forecasts, cited by the company, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• TOPCon cells in-house, the technology it describes as the latest for mass production (AP p.3).
• An assured order book from Avaada Energy's project pipeline under framework agreements (AP p.3).
• ALMM List I approval for government-linked projects (AP p.3).

Against that: a two-year operating history, one dominant customer inside the group, and a market with much larger listed makers, Waaree Energies had FY26 revenue of ₹265,367.70 million (DRHP p.141).

16Peers the company named

Source: DRHP p.141. P/E uses closing prices on 21 August 2026.

The document gives an industry P/E range of 11.86 to 31.33, average 19.12 (DRHP p.141). For Avaada Electro it gives FY26 earnings per share of ₹5.76, net asset value per share of ₹10.33 and return on net worth of 55.80% (DRHP p.141). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• One customer, inside the group. Avaada Energy took 89.34% of FY26 revenue (DRHP p.36).
• The promoter on both sides. It sells ₹60,000 million of shares, lends to the company, guarantees its debt, built its plants and has pledged 51% of its shares (AP p.9, DRHP p.39, DRHP p.63).
• Short history. Revenue began only in FY25 (DRHP p.43).
• Rising debt. Borrowings reached ₹39,263.98 million by June 2026 and debt to equity was 1.92 times at March 2026 (DRHP p.40, DRHP p.49).
• Policy. Duties on imported cells and modules and domestic-content rules help both the company and its main customer; changes could hurt (DRHP p.54).
• A customer dispute. Avaada Energy faces an arbitration in which liquidated damages of up to ₹5,000 million are claimed (DRHP p.66).
• Technology and competition. Solar technology changes fast, and larger rivals have more resources (DRHP p.56, DRHP p.61).

18Litigation and regulatory matters

Source: AP p.12. Amounts are to the extent the document could quantify them.

The group-company matters include the Avaada Energy arbitration, with a liquidated-damages exposure of ₹5,000 million, 6.37% of Avaada Energy's consolidated equity (DRHP p.66).

19Related-party transactions

The group relationships are the business: sales to Avaada Energy, advances from Avaada Energy, EPC and capital-goods payments to Avaada Ventures of ₹32,459.29 million in total by March 2026, loans from and guarantees by Avaada Ventures (AP p.9, DRHP p.36, DRHP p.38). The capital-goods and EPC total is our arithmetic on the document's two figures.

20What the offer document does not say

In the sections read for this study, the document does not give:

• The price per watt it charges Avaada Energy, and how that compares with its sales to other customers.
• The terms of the framework agreements that underpin the order book, volumes, pricing and duration.
• How the EPC price paid to the promoter company was set.
• When the promoter's ₹5,290.52 million loan and its accrued interest will be settled.
• The price band, lot size or issue dates, which is normal at this stage.

21Five questions for management

1. What share of the 19,106.22 MW order book is from Avaada Energy, and on what price terms?
2. How were the ₹15,671.54 million EPC fee and ₹16,787.75 million of capital goods paid to Avaada Ventures benchmarked against outside contractors?
3. After the offer, will Avaada Ventures keep guaranteeing ₹63,670 million of the company's debt, and will the 51% pledge be released?
4. Why did utilisation fall to 62.31% in FY26, and what utilisation does the order book support for FY27?
5. When does the company expect its first export or retail revenue?

2Sources and cited facts

This study was read from 2 documents the company filed. The 72 figures it cites are listed under the document each came from, with the page and the sentence as printed.