Sael Industries Limited IPO

01At a glance

What the company does: an independent power producer with solar module manufacturing and in-house construction and maintenance; at September 2025 its contracted and awarded capacity was 5,765.70 MW, of which 5,600.70 MW solar and 164.90 MW agri waste-to-energy, and it had 3,625 MW of TOPCon module manufacturing capacity (DRHP p.27). The company was incorporated in Punjab in 2022 (DRHP p.1).

Who pays it: central government off-takers, state distribution companies and private industry buying power (DRHP p.27). The top five off-takers were 94.63% of revenue in the June 2025 quarter (DRHP p.32).

Why it is raising money: ₹28,125.00 million to invest in SAEL Solar P5 and SAEL Solar P4 so they can repay borrowings, interest and prepayment penalties, and the rest for general purposes (DRHP p.28).

How fast it has grown: revenue from ₹3,889 million in FY23 to ₹5,585 million in FY24 and ₹6,648 million in FY25, and ₹2,608 million in the three months to June 2025 (DRHP p.30).

The one thing to understand: a construction-stage business financed with debt. Operating capacity was 470.80 MW at June 2025, with 800 MW built and awaiting commissioning and 2,944.90 MW under construction; borrowings rose from ₹22,149 million in March 2024 to ₹99,227 million, and net debt was 7.99 times equity including preference shares (DRHP p.30, DRHP p.160, DRHP p.161).

02The business, in plain words

A renewable power producer wins contracts to supply power, builds the plants, here using its own modules and construction teams, and then earns revenue from the power generated, while servicing the project debt.

A central government agency auctions a solar power contract → SAEL wins and signs a power purchase agreement → it builds the plant with its own modules and borrowed money → once commissioned, it sells the plant's power at the agreed tariff and repays the loans from that income.

Its agri waste-to-energy plants generate power from agricultural waste (DRHP p.27).

Earnings equation: Profit ≈ units generated × tariff + module sales − operating cost − depreciation − interest. Adjusted EBITDA, which excludes fair-value changes on preference shares, was ₹1,501.01 million in the June quarter (DRHP p.161).

03Where the money comes from

Source: DRHP p.160.

Operating capacity at June 2025 was 320.80 MW solar and 150.00 MW agri waste-to-energy (DRHP p.160).

04The growth record

Source: DRHP p.30, DRHP p.161, DRHP p.620, DRHP p.621. Q1 FY26 is three months.

EBITDA margin, which the document computes on total income, was 32.71% in FY23 and 19.43% in FY25, and days of receivables outstanding were 47.82 in FY23 and 23.12 in FY25 (DRHP p.161).

05What the growth is made of

Capacity additions. Operating capacity rose 64% from FY24 to June 2025 while contracted and awarded capacity grew more than tenfold from FY23 (our arithmetic, DRHP p.160). Revenue in the June quarter alone was 39% of FY25's (our arithmetic, DRHP p.30).

06Earnings quality

Losses are driven by interest, depreciation and fair-value charges on preference shares: in the June quarter the loss before tax was adjusted for ₹1,002.84 million of depreciation, ₹995.82 million of finance costs and ₹312.13 million of fair-value changes (DRHP p.620). Reported EBITDA was ₹1,419.15 million in FY25 against adjusted EBITDA of ₹3,589.28 million (DRHP p.161). Operating cash flow was negative in FY25 and the June quarter (DRHP p.620).

Net cash used in operating activities was ₹273.13 million in FY25 (DRHP p.620).

07The balance sheet

Source: DRHP p.30, DRHP p.161.

The company spent ₹16,527.15 million on investing activities in the June quarter alone (DRHP p.621). It held ₹1,335.42 million of cash and ₹1,839.27 million of other bank balances at June 2025 (DRHP p.620).

Adjusted EBITDA ROCE, as the document defines it, was 22.35% in FY25 (DRHP p.161).

08What the money is for

Source: DRHP p.28.

The fresh issue is of up to ₹37,500.00 million and the offer for sale of up to ₹8,250.00 million (DRHP p.27).

09Who is selling

Source: DRHP p.27, DRHP p.29. Norfund's holding is mainly preference shares that convert before the red herring prospectus (DRHP p.29).

10Promoters

The promoters are Jasbir Singh, Sukhbir Singh and Laxit Awla (DRHP p.27). Proceedings against the promoters include 2 criminal and 8 tax matters involving ₹328.37 million; Jasbir Singh and Sukhbir Singh are also involved in a criminal proceeding concerning the subsidiary SAEL Limited (DRHP p.31).

Remuneration to the three promoters together was ₹12.21 million in FY23 and ₹47.57 million in FY25 (our arithmetic, DRHP p.33).

11Who already owns it

Source: DRHP p.28, DRHP p.29. Preference shares and debentures will convert into up to 474,410,865 equity shares (our arithmetic, DRHP p.27).

United States International Development Finance Corporation holds 5.08% of the equity on a fully diluted basis (DRHP p.130).

12What changed just before the IPO

• Borrowings: up almost fourfold in FY25 (DRHP p.30).
• Capacity: 800 MW completed and awaiting commissioning at June 2025 (DRHP p.160).
• Demerger: a composite scheme with SAEL Limited and Sapphire Agri Warehousing, under an order of May 2025, moved some tax cases to Sapphire (DRHP p.31).
• Awards: contracted and awarded capacity 5,765.70 MW by September 2025 (DRHP p.27).
• Share split: in September 2025 each share of ₹10 face value was split into two shares of ₹5 (DRHP p.117).
• Bonus issue: in September 2025 the company issued 12 bonus shares for every share held (DRHP p.118).
• Last allotment: 2,530,000 Class B preference shares to Norfund at ₹700 each in October 2025 (DRHP p.119).
• Auditor: Varinder Mohan Singhal & Associates resigned as statutory auditor in April 2023, and G.D. Singhal & Associates and Walker Chandiok & Co LLP became joint statutory auditors in 2023 (DRHP p.108).

13Capacity and expansion

Operating 470.80 MW at June 2025, with 800 MW awaiting commissioning and 2,944.90 MW under construction, plus 3,625 MW of module manufacturing (DRHP p.27, DRHP p.160). The proceeds reduce debt at two solar subsidiaries (DRHP p.28).

14Market size and industry structure

The CRISIL report cited in the offer document says India's renewable energy installations reached about 234 GW by June 2025 and projects 705 to 710 GW by FY2030 (DRHP p.27). Those projections are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Vertical integration: its own modules, construction and maintenance (DRHP p.27).
• Agri waste-to-energy capacity alongside solar (DRHP p.27).

Against that: losses and negative net worth, dependence on a few off-takers whose finances may be weak, delays in signing power purchase agreements after awards, and project-development risk (DRHP p.31, DRHP p.32).

16Peers the company named

The document gives the listed peers' P/E range as 50.15 (Premier Energies) to 151.46 (NTPC Green Energy), average 81.91 (DRHP p.156). The full peer table was not read for this study.

No P/E is possible for the company until a price band is set, and the company has made losses.

17Risks, in plain words

• Losses. Every year shown, and negative net worth (DRHP p.31).
• Off-takers. Five off-takers provide 95% of revenue; some may pay late (DRHP p.31, DRHP p.32).
• Awards to contracts. Delay or failure to sign power purchase agreements (DRHP p.31).
• Construction. Converting 3,700 MW of projects into operating plants (DRHP p.32, DRHP p.160).
• Debt. Net debt 8 times equity including preference shares (DRHP p.161).

18Litigation and regulatory matters

Source: DRHP p.31.

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:

• What the criminal proceeding involving SAEL Limited and two promoters concerns, in the pages read.
• What the seven criminal proceedings against directors concern, in the pages read.
• When the 800 MW awaiting commissioning will begin earning, in the pages read.
• How the remaining construction will be funded after the offer, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What is the criminal proceeding involving SAEL Limited, Jasbir Singh and Sukhbir Singh?
2. When will the 800 MW of completed capacity be commissioned, and what is holding it up?
3. How much more debt is needed to build the 2,945 MW under construction?
4. Which off-takers make up 95% of revenue, and how quickly do they pay?
5. At what level of operating capacity does the company expect to stop making losses?

1Sources and cited facts

This study was read from 1 document the company filed. The 60 figures it cites are listed under the document each came from, with the page and the sentence as printed.