IPO Note : GK Energy Ltd by Geojit Financial Services Ltd
Expanding in Solar and Water Infrastructure...
GK Energy Ltd. (GEL) is India’s leading pure-play engineering, procurement and commissioning (EPC) provider for solar-powered agricultural water pump systems. The company offers end-to-end solutions, covering survey, design, supply, installation, commissioning, and maintenance. GEL also undertakes rooftop solar and water infrastructure projects under the Jal Jeevan Mission and supplies solar products to government agencies.
* The domestic market for solar-powered pump systems grew at a CAGR of 15%, rising from Rs.19.3 billion in FY19 to around Rs.39 billion in FY24, and is projected to reach Rs.300–320 billion by FY29 (Source: CRISIL Report).
* GEL’s revenue, EBITDA, and PAT grew at a CAGR of 96%, 240.9%, and 263.5% respectively between FY23 and FY25, reaching Rs.1,094.8cr, Rs.199.7cr, and Rs.133.2cr, supported by government-backed solar projects, efficient execution, and geographic expansion.
* The company delivered an EBITDA margin of 18% in FY25 v/s 6% in FY23, while its PAT margin rose to 12% from 3.5% over the same period. This strong financial performance led to a strong ROE of 63.7%
* As of August 15, 2025, GEL’s order book stood at Rs.1,029cr, comprising Rs.1,008.9cr for solar-powered agricultural water pump systems (SPPS) and Rs.20.1cr for rooftop solar projects. The order book to sales ratio of GE Energy is 0.93x.
* GK Energy is empanelled under the PM-KUSUM scheme in Maharashtra, Rajasthan, Haryana, Uttar Pradesh, and Madhya Pradesh, which contributed 44%, 13%, 16%, 8%, and 5% of the total project sanctions.
* At the upper price band of Rs.153, GEL’s FY25 P/E ratio of 23.3x appears fairly priced compared to peers. GK Energy operates an asset-light, scalable EPC model, enabling rapid expansion without heavy capital investment. Its leadership in solar pump installations under the PM-KUSUM scheme, combined with expansion into rooftop solar and water infrastructure projects, positions it well to benefit from India’s renewable energy push. With strong execution capabilities and government-backed demand, GK Energy is poised for sustained growth. Therefore, we recommend a SUBSCRIBE rating for investors with a medium- to long-term horizon.
Purpose of IPO
The issue comprises a fresh issue of up to 26,143,790 equity shares totalling Rs.400 cr and an OFS of up to 4,200,000 shares totalling Rs.64.26 cr. The objectives of the issue are i) funding of the working capital requirements of the company (Rs.322.46 cr) and ii) general corporate purposes.
Key Risks
* Any reduction in demand for EPC services for solar-powered agricultural water pump systems could materially impact business operations and financial results.
* Inability to recover trade receivables could impact the company’s business operations.
* Negative operating cash flow driven by rising receivables and growing market competition.
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