Ahasolar Technologies
- Ahasolar Technologies is coming out with an initial public offering (IPO) of 8,18,400 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 157 per equity share.
- The issue will open for subscription on July 10, 2023 and will close on July 13, 2023.
- The shares will be listed on SME Platform of BSE.
- The share is priced 15.7 times higher to its face value of Rs 10.
- Book running lead manager to the issue is Beeline capital advisors.
- Compliance Officer for the issue is Vrunda Manharbhai Patel.
Profile of the company
The company is engaged in the business of CleanTech enabling Energy Transition through Digital Transformation and henceforth empowering stakeholders to adopt renewable energy. The company does this through multiple digital solutions and advisory in the field of renewable energy. The company is a DPIIT recognised startup and registered vide registration no. DIPP34701. The core idea of AHAsolar to work in the space of Climate Change, Renewable and Digital space. The company’s primary focus in renewable energy has been in solar industry and to cater it it developed an AI based intelligent Solar Digital Platform. It has developed Software as a Service (SaaS) productsfor solar companies to streamline the processes, design PV, do project management and monitor generation along-with an integrated Marketplace to connect the demand & supply digitally. Apart from this, another SaaS product is for the governments to implement the distributed renewable programme in their services area. Since the company’s inception, it has been working with multiple national, internaltional, government and private companies in enabling them to accelerate the adoption of solar through its solutions. In terms of software sales it is providing its services to Solar companies, Original Equipment Manufacturers and the governments and in terms of advisory it has been rendering its services to Solar EPC Companies and Corporate Consultancy Firms on Solar Project Management and Solar Plant Audits.
The company has two SaaS products namely; For Government Agencies: AHAsolar Unified Portal; and For Solar Companies: AHAsolar Helper and Sun Analyzer. The company has developed the Unified Single Window Solar Portal (the Portal or AHAsolar Unified Portals) for multiple states nodal agencies like Gujarat Energy Development Agency (GEDA), Gujarat Urja Vikas Nigam (GUVNL), Goa Energy Development Agency (Goa EDA), Jammu & Kashmir Energy Development Agency (JAKEDA), etc. The second SaaS product i.e., AHAsolar Helper. It is a one stop solution for the Solar EPC Company and offers convenience to manage the Projects with completely integrated software solution of CRM, ERP, Design, Project and Team Management. It is designed for Solar EPC Companies who want to keep their Sales & Operation in order using AI to standardize, connect and automate solar and renewable operations, project management, designing and procurement. This helps the Solar EPC companies to manage their work properly and efficiently.
Proceed is being used for:
- Development of Solar PV Plant.
- Setting up of Electric Vehicle Charging Infrastructure.
- Purchase of Electric Vehicle.
- Meeting Working Capital Requirements.
- General Corporate Purpose.
- Meeting Public Issue Expenses.
Industry overview
India has low conventional energy resources compared to its required energy needs driven by a huge population and a rapidly increasing economy. However, India can harness the huge potential of solar energy as it receives sunshine for most of the year. It also has vast potential in the hydro power sector which is being explored across states, especially in the northeast. As of November 2022, India’s installed renewable energy capacity (including hydro) stood at 165.94 GW, representing 40.6% of the overall installed power capacity and providing a great opportunity for the expansion of green data centers. India is the only country among the G20 countries who is on track to achieve its targets under the Paris Agreement. In November 2021, at the Cop-26 Summit in Glasgow, Prime Minister Mr. Narendra Modi made a promise to increase India’s renewable energy generation capacity to 500 GW, and meet 50% of India’s energy needs through renewable means by the year 2030. The non-hydro renewable energy capacity addition stood at 4.2 GW for the first three months of FY23 against 2.6 GW for the first three months of FY22.
The non-conventional energy space in India has become highly attractive for investors and received FDI inflow of US$ 12.57 billion between April 2000- June 2022. More than Rs. 5.2 lakh crore (US$ 70 billion) has been invested in India’s renewable energy sector since 2014. India ranked third on the EY Renewable Energy Country Attractive Index 2021. In June 2021, Prime Minister Mr. Narendra Modi stated that the renewable energy capacity in India increased by 250% between 2014 and 2021 and the country ranks among the top five globally in terms of installed renewable energy capacity. The Central Electricity Authority (CEA) estimates India’s power requirement to grow to reach 817 GW by 2030. As the economy grows, the electricity consumption is projected to reach 15,280 TWh in 2040 from 4,926 TWh in 2012. Most of the demand will come from the real estate and transport sectors. India was ranked fourth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2020. Power generation from solar and wind projects are likely to be cost-competitive relative to thermal power generation in India in 2025-2030. As per the British Business Energy, India ranks third on renewable energy investments and plans.
Pros and strengths
Well-defined organizational structure: The company has a qualified and experienced management team empowered to take timely decisions which makes the operations of the company’s business smoother and ensures efficiency in all aspects of its operations. Its senior management has pioneered its growth and fostered a culture of innovation, entrepreneurship and teamwork within its organization. A motivated and empowered employee base is key to its competitive advantage. The company recruits talented employees, facilitating their integration into its organization culture and encouraging the development of their skills and expertise for becoming the next generation leaders. Its experience, knowledge and human resources will enable it to drive the business in a successful and profitable manner.
Existing Supplier Relationship: The company’s existing supplier relationship protects the business in terms of supply and pricing of the products and services, the quality of the products and services offered etc. The company, being a small and medium-sized organization, relies on personal relationships with its suppliers. Further it also leverages the past experience of its management in maintaining effective supplier relationships ensuring uninterrupted supply chain management.
Customer Relationship: The company constantly tries to address its customers’ needs. It tries to provide a tailor-made specification according to their requirements. Its existing customer relationships help it to get continuous business from its customers. This has helped it to maintain a long-term working relationship with its customers and improve its customer retention strategy.
Risks and concerns
One of the company’s business verticals is high volume-low margin business: The company’s revenues derived from AHA Marketplace is a high-volume low margin business. It may need to generate higher volume in terms of quantity to increase its profitability. Its inability to regularly grow its turnover and effectively execute its key business processes could lead to lower profitability from the said business vertical and hence adversely affect its operating results, debt service capabilities and financial conditions. Due to the nature of its business, it may not be able to charge higher margins on its products. Hence, the said business vertical is heavily reliant on its ability to effectively grow its turnover and manage its key processes including but not limited to procurement of traded goods, timely sales, order execution and continuous cost control of non-core activities.
Depends on few numbers of customers for sales: The company does this through multiple digital solutions and advisory in the field of renewable energy. Its revenue from AHA Marketplace being trading vertical, advisory vertical is derived from contracts acquired by bidding open tenders. Its business operations are highly dependent on its customers and the loss of any of its customers may adversely affect its sales and consequently on its business and results of operations. While it typically have long term relationships with its customers, it has not entered into long term agreements with its customers and the success of its business is accordingly significantly dependent on it maintaining good relationships with its customers. The actual sales by the company may differ from the estimates of its management due to the absence of long term agreements. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtain from them could have an adverse effect on its business, results of operations, financial condition and cash flows.
Requires significant amount of working capital: The company’s business requires significant working capital, part of which would be met through additional borrowings in the future. In many cases, significant amounts of working capital are required to finance the procurement of branded products before payments are received from customers. Its working capital requirements may increase, under certain conditions, where payment terms do not include advance payments or include delayed payments from customers. Additionally, its working capital requirements have increased in recent years due to the general growth of its business. All these factors may result, or have resulted, in increases in its working capital needs.
Outlook
Incorporated in 2017, Ahasolar Technologies is engaged in the business of CleanTech enabling Energy Transition through Digital Transformation and henceforth empowering stakeholders to adopt renewable energy. With their passion for solar energy and the desire to help stakeholders like solar companies and the government change the world for the better, Ahasolar is making the process of managing, selling, designing, and procuring solar PV systems easier and simpler. With a strong track record of successful projects and satisfied clients, AHAsolar Technologies has demonstrated its ability to deliver tangible results. It has a history of driving impactful transformations and enabling organizations to embrace solar energy solutions effectively. On the concern side, the company requires several statutory and regulatory permits, licenses and approvals to operate the business. Many of these approvals are granted for fixed periods of time and need renewal from time to time. The company is required to renew such permits, licenses and approvals. There can be no assurance that the relevant authorities will issue any of such permits or approvals in time or at all.
The company is coming out with an IPO of 8,18,400 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 157 per equity share to mobilize Rs 12.85 crore. On performance, the revenue from operations for the FY 2022-23 was Rs 2,104.23 lakh as compared to Rs 1,713.33 lakh during the FY 2021-22 showing an increase of 22.82%. Profit after Tax (PAT) increased from Rs 68.63 lakh in FY 2021-22 to Rs 176.38 lakh in the FY 2022-23 to showing increase of 157.00%. Meanwhile, as a part of the company’s growth strategy its focus is on increasing sales volume through expansion, diversification and spread in geographical outreach. Its growth in the local market can fetch it new business expansion and opportunities. The company intends to continue to enhance scale in existing services across high end and mid segment to capitalize on the opportunity to cater rising acceptance and demand.
