Rayzon Solar Limited IPO

01At a glance

What the company does — manufactures bifacial and monofacial solar PV modules using Mono PERC and TOPCon cells for utility-scale, residential, commercial and industrial installations; the report cited in the offer document places it among India's top ten module makers (DRHP p.21). It is ALMM-certified and has two plants in Gujarat, at Karanj and Sava, each with 3.00 GW of module capacity (DRHP p.21).

Who pays it — developers and installers of solar projects; the top ten customers were 40.29% of revenue in the nine months to December 2024 (DRHP p.37). The order book was ₹41,541.01 million, or 3.00 GW, at December 2024 (DRHP p.142).

Why it is raising money — ₹12,650.00 million to invest in its wholly owned subsidiary Rayzon Energy Private Limited to part-fund a 3.5 GW TOPCon solar-cell plant at Kathvada, Surat, and the rest for general purposes (DRHP p.22).

How fast it has grown — revenue from ₹2,616 million in FY22 to ₹6,980 million in FY23, ₹12,728 million in FY24 and ₹19,570 million in the nine months to December 2024 (DRHP p.24).

The one thing to understand — very fast growth and a sudden jump in margin, built on imported inputs. Nine-month profit of ₹2,390.27 million was nearly four times FY24's full-year profit, as EBITDA margin rose from 7.95% to 18.07%; imported raw materials, mostly from China, were 66.71% of purchases in that period (DRHP p.40, DRHP p.142). The cell plant is meant to make its own cells (DRHP p.22).

02The business, in plain words

A module maker buys solar cells, glass, frames and other materials, assembles the cells into panels, tests them, and supplies them to solar developers and installers.

A developer builds a solar park → it orders TOPCon modules from Rayzon → Rayzon assembles and ships them from Gujarat → the developer pays on agreed terms.

Earnings equation: Profit ≈ megawatts shipped × (price per watt − cells, glass and other materials) − overheads − interest. Raw materials cost ₹14,423.38 million, or 74% of revenue, in the nine months to December 2024 (our arithmetic, DRHP p.142).

03Where the money comes from

Source: DRHP p.37, DRHP p.40, DRHP p.142.

04The growth record

Source: DRHP p.142, DRHP p.408. The cash-flow table shows FY23 operating cash flow as an inflow of ₹257.35 million, while the accompanying text describes it as cash used (DRHP p.408, DRHP p.409).

05What the growth is made of

Capacity and volume. Installed capacity rose from 0.30 GW in FY22 to 3.00 GW in December 2024 and 6.00 GW by March 2025, and production from 0.13 GW to 1.39 GW in nine months (DRHP p.21, DRHP p.142). The pages read do not explain the jump in margin in the nine months to December 2024.

06Earnings quality

Operating cash flow of ₹1,854.10 million over FY22 to the nine months to December 2024 was below profit of ₹3,293.55 million (our arithmetic, DRHP p.142, DRHP p.408). In FY24, receivables rose ₹474.01 million and other current assets ₹399.30 million (DRHP p.409). The nine-month operating cash flow included a ₹482.76 million tax refund (DRHP p.409). Investing outflows were ₹1,685.08 million in the nine months (DRHP p.408).

07The balance sheet

Source: DRHP p.24, DRHP p.142.

08What the money is for

Source: DRHP p.22. The company expects government subsidies for the project, and says the cost rises if they do not come through (DRHP p.37).

09Who is selling

Nobody. The issue is a fresh issue only, of up to ₹15,000.00 million (DRHP p.21). Shares acquired in the last three years cost a weighted average of ₹4.26, in a range of nil to ₹234 (DRHP p.30).

10Promoters

The promoters are Hardik Ashokbhai Kothiya, Chirag Devchandbhai Nakrani, Ashokbhai Manjibhai Kothiya, Devchandbhai Kalubhai Nakrani, Ramilaben Ashokbhai Kothiya, Induben Devchandbhai Nakrani and four family trusts, who together hold 98.07% (DRHP p.21, DRHP p.23). One tax proceeding involving ₹0.47 million is pending against the promoters (DRHP p.24).

11Who already owns it

Source: DRHP p.22, DRHP p.23. The rows are our arithmetic from the individual holdings.

12What changed just before the IPO

• Bonus issue — 19 bonus shares for every share held, February 2025 (DRHP p.141).
• Capacity — doubled to 6.00 GW by March 2025 (DRHP p.21).
• Margin — EBITDA margin up to 18.07% in the nine months to December 2024 (DRHP p.142).

13Capacity and expansion

Module capacity of 6.00 GW at March 2025, split equally between Karanj and Sava (DRHP p.21). The proceeds fund a 3.5 GW solar-cell plant at Kathvada, Surat, through a subsidiary (DRHP p.22).

14Market size and industry structure

The CRISIL report cited in the offer document expects 140 GW to 160 GW of solar capacity to be added in India over FY2025 to FY2030, taking the total to 250 GW to 260 GW (DRHP p.21). Those projections are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Scale — among India's top ten module makers, per the report cited (DRHP p.21).
• ALMM certification for its modules (DRHP p.21).
• Order book — ₹41,541 million at December 2024 (DRHP p.142).

Against that: dependence on imported Chinese inputs, reliance on subsidies for the cell project, and customer concentration (DRHP p.37, DRHP p.40).

16Peers the company named

Source: DRHP p.141. The peers' average P/E is 124.24 (DRHP p.140).

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

17Risks, in plain words

• Imports. Two-thirds of purchases imported, mostly from China (DRHP p.40).
• Margins. A sudden rise in margin that the pages read do not explain (DRHP p.142).
• Utilisation. New capacity may run below full use (DRHP p.37).
• Subsidies. The cell plant relies on government support (DRHP p.37).
• Customers. Ten customers were 40% of revenue (DRHP p.37).

18Litigation and regulatory matters

Source: DRHP p.24.

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 EBITDA margin more than doubled in the nine months to December 2024, in the pages read.
• Whether FY23 operating cash flow was an inflow or an outflow, given the conflicting statements (DRHP p.408, DRHP p.409).
• How much subsidy the cell project expects, in the pages read.
• Figures after December 2024, as the filing predates them.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What drove EBITDA margin from 8% to 18%, and is it lasting?
2. How much of the cell plant's cost depends on subsidies?
3. Was FY23 operating cash flow positive or negative?
4. How will the company fill 6 GW of module capacity?
5. How exposed is it to changes in import duties on Chinese inputs?

1Sources and cited facts

This study was read from 1 document the company filed. The 29 figures it cites are listed under the document each came from, with the page and the sentence as printed.