Deon Energy Limited IPO

01At a glance

What the company does: end-to-end solar EPC on a turnkey basis for commercial and industrial clients, from concept and help with land acquisition to commissioning, including approvals for evacuation lines to the grid; it also provides operations and maintenance for most plants it builds (DRHP p.29, DRHP p.65). It executed 31 solar EPC projects totalling 87.73 MWDC in FY25 (DRHP p.116).

Who pays it: commercial and industrial clients in Gujarat, 100% of FY24 and FY25 revenue (DRHP p.46). The top ten clients were 55.05% of FY25 revenue, down from 97.84% in FY23 (DRHP p.33).

Why it is raising money: ₹1,000.00 million for long-term working capital, and the rest for general purposes (DRHP p.29).

How fast it has grown: revenue from ₹418 million in FY23 to ₹684 million in FY24 and ₹2,988 million in FY25 (DRHP p.31).

The one thing to understand: a young contractor that quadrupled in one year in one state. It became a company in April 2024, FY25 revenue was 4.4 times FY24's, all of it from Gujarat, and profit did not turn into operating cash (DRHP p.31, DRHP p.46, DRHP p.52, our arithmetic).

02The business, in plain words

A solar EPC contractor designs a plant for a business that wants its own solar power, buys modules and equipment, builds the plant on the client's or acquired land, connects it to the grid, and often maintains it afterwards.

A factory in Gujarat wants cheaper power → it hires Deon to build a ground-mounted solar plant → Deon buys modules and inverters, builds and connects the plant → the factory pays under the contract and often hires Deon for operations and maintenance.

Order book was ₹5,051.55 million at 31 August 2025 (DRHP p.56).

Earnings equation: Profit ≈ MW built × (contract price − modules, equipment and construction cost) + O&M fees − overheads. EBITDA margin was 11.85% in FY25 (DRHP p.64).

03Where the money comes from

Source: DRHP p.33, DRHP p.46, DRHP p.115, DRHP p.116.

04The growth record

Source: DRHP p.31, DRHP p.52, DRHP p.64.

Our arithmetic on that record: revenue grew about 167.3% a year from FY23 to FY25 and profit for the year about 985.5% a year (our arithmetic, DRHP p.31). Trade receivable days were 23 in FY23, 14 in FY24 and 6 in FY25 (DRHP p.116). Return on capital employed was 27.05% in FY23, 117.28% in FY24 and 118.72% in FY25 (DRHP p.128).

05What the growth is made of

Bigger projects. Capacity executed rose from 19.53 MWDC in FY24 to 87.73 MWDC in FY25, and new orders of ₹2,961.00 million in FY25 covered 103.72 MWDC of EPC and 84.52 MWDC of O&M (DRHP p.116).

06Earnings quality

In FY25, operating profit before working-capital changes of ₹354.14 million was absorbed by a ₹158.93 million rise in inventory, other working-capital changes and ₹88.75 million of tax, leaving operating cash flow of negative ₹5.62 million (DRHP p.52). Inventory rose from ₹37.87 million in FY23 to ₹284.77 million in FY25 (DRHP p.54). Net worth rose ₹223.33 million in FY25, less than the year's profit of ₹261.58 million (our arithmetic, DRHP p.31).

07The balance sheet

Source: DRHP p.31, DRHP p.54.

08What the money is for

Source: DRHP p.29. The working capital is planned for FY2026 to FY2028 (DRHP p.54).

09Who is selling

Nobody. The issue is a fresh issue only, of up to ₹1,500 million (DRHP p.29).

10Promoters

The promoters are Dharmesh Ashokbhai Makadiya, Chiragbhai Dineshbhai Kalariya, Archanaben Kalariya and Bhargav Chaturbhai Kavar (DRHP p.29). The company was formed by converting a partnership firm on 11 April 2024 (DRHP p.31). No proceedings are listed against the company, promoters or directors (DRHP p.31, DRHP p.32).

11Who already owns it

Source: DRHP p.30.

12What changed just before the IPO

• Conversion: partnership to company in April 2024 (DRHP p.31).
• Scale: capacity executed more than quadrupled in FY25 (DRHP p.116).
• Order book: ₹5,051.55 million by August 2025 (DRHP p.56).
• Bonus issue: 2,400 equity shares for every 1 held, allotted September 2025 out of reserves, at nil consideration; it is the last allotment before the issue (DRHP p.100).
• Public company: converted from a private limited company in May 2025 (DRHP p.55).
• Auditor: no change in the statutory auditor since incorporation (DRHP p.94).
• Pre-IPO placement: none (DRHP p.111).

13Capacity and expansion

Capacity is execution teams and working capital. The proceeds fund working capital to take on larger orders (DRHP p.54).

14Market size and industry structure

The CARE report cited in the offer document says solar was 22% of India's installed power capacity in FY2025, with 23.83 GW added that year against 15.03 GW in FY2024, and that Rajasthan and Gujarat lead in grid-connected solar (DRHP p.29). The figures are CARE's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Turnkey delivery including land and grid approvals (DRHP p.29).
• Rising margins: EBITDA margin up from 1.36% to 11.85% (DRHP p.64).

Against that: one state, a young balance sheet, ground-mounted projects as the main service, and client concentration (DRHP p.33, DRHP p.46).

16Peers the company named

Source: DRHP p.127. The peers' average P/E is 29.19 (DRHP p.126).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Gujarat. All revenue from one state (DRHP p.46).
• Clients. Ten clients were 55% of FY25 revenue (DRHP p.33).
• One service. Ground-mounted solar EPC (DRHP p.33).
• Cash. Growth consumes working capital (DRHP p.52).
• O&M contracts. Some can be ended without cause (DRHP p.65).

18Litigation and regulatory matters

None. The document lists no outstanding proceedings by or against the company, promoters, directors, subsidiaries, group company or key managers (DRHP p.31, DRHP p.32).

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

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

• Why net worth rose less than FY25 profit, in the pages read.
• Who the main clients are, in the pages read.
• How much of the order book is O&M rather than EPC, in the pages read.
• Whether the company owns any solar assets, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. How will the company win work outside Gujarat?
2. What drove EBITDA margin from about 1% to about 12% in two years?
3. What happened to the difference between FY25 profit and the rise in net worth?
4. How long do clients take to pay, and how much is held back as retention?
5. How much of the ₹5.05 billion order book will be built in FY26?

1Sources and cited facts

This study was read from 1 document the company filed. The 54 figures it cites are listed under the document each came from, with the page and the sentence as printed.