Infrax Renewable IPO (9 Sep-11 Sep) Analysis
Updated: Sep 11
Infrax Renewable Limited is a solar energy company based in Rajkot, Gujarat, engaged in providing solar Engineering, Procurement and Construction (EPC) services, trading of solar products, and Independent Power Producer (IPP) activities.
The company was originally formed as a partnership firm named Infrax International in 2019 and was converted into a public limited company in September 2024. It holds an ISO 9001:2015 certification for quality management.
The company operates across three segments. The EPC segment covers rooftop and ground mounted solar power projects for residential and commercial customers, encompassing project design, engineering, procurement, installation, testing, commissioning, and operation and maintenance services.
The IPP segment involves generation and sale of electricity to Paschim Gujarat Vij Company Limited (PGVCL) through a Power Purchase Agreement, by operating the company's own solar power plant at Bhadla, Jasdan, Gujarat. The trading segment covers supply and distribution of solar products including solar PV modules, inverters, and related accessories.
In FY2026, residential solar EPC projects contributed Rs. 4,664.85 Lakhs (50.04%) of revenue, ground mounted solar projects contributed Rs. 3,870.03 Lakhs (41.52%), and sale of solar products contributed Rs. 786.60 Lakhs (8.44%). The company has an ongoing orderbook of 3,100 projects amounting to Rs. 6,244.19 Lakhs as of August 20, 2026.
It operates 3 warehouses at Rajkot, Ahmedabad and Kanpur, has a dealer network of 2,830 dealers, and maintains a presence across Gujarat, Maharashtra, Madhya Pradesh and Uttar Pradesh through branch offices. The company is empaneled as a national vendor for implementation of solar power projects under the PM Surya Ghar: Muft Bijli Yojana Rooftop Solar Programme of the Government of India.
The promoters are Mr. Bhargv Ashvinbhai Vachhani (Chairman cum Managing Director), Mr. Gandhi Bhavik Tarunkumar (Whole Time Director), and Ms. Khushboo Bhargav Vachhani (Non Executive Director). The promoter group collectively possesses over 17 years of experience in the solar industry. As of March 31, 2026, the company employs 52 full time staff.
IPO BASICS
Parameter | Details |
Issue Type | Fresh Issue plus Offer for Sale (Fixed Price) |
Fresh Issue | 32,50,800 equity shares (Rs. 3,380.83 Lakhs) |
Offer for Sale | 6,80,400 equity shares (Rs. 707.62 Lakhs) |
Total Offer Size | 39,31,200 equity shares (Rs. 4,088.45 Lakhs) |
Face Value | Rs. 10 per share |
Issue Price | Rs. 104 per share (10.4x face value) |
Listing | BSE SME Platform |
IPO Open Date | September 9, 2026 |
IPO Close Date | September 11, 2026 |
BRLM | Smart Horizon Capital Advisors Private Limited |
Registrar | Bigshare Services Private Limited |
The Offer for Sale component comprises 5,10,400 shares by Mr. Bhargv Ashvinbhai Vachhani and 1,70,000 shares by Mr. Gandhi Bhavik Tarunkumar. The company will not receive any proceeds from the Offer for Sale; those proceeds go directly to the selling shareholders. Pre-IPO shares outstanding total 1,09,85,111 equity shares. Post-IPO, the total share capital will stand at 1,42,35,911 equity shares.
Of the total offer, 1,99,200 shares are reserved for the market maker (Shreni Shares Limited), and the net offer to the public is 37,32,000 shares. The offer is being made through the Fixed Price method. It is noted that SEBI has an ongoing investigation involving the market maker Shreni Shares Limited, which investors should factor into their assessment.
USE OF PROCEEDS
The company will receive only the proceeds from the Fresh Issue. After deducting issue related expenses of Rs. 248.26 Lakhs attributable to the company, the net proceeds from the Fresh Issue amount to Rs. 3,132.57 Lakhs. The proposed utilisation of net proceeds is as follows:
Purpose | Amount (Rs. Lakhs) | % of Net Proceeds |
Capital expenditure for machinery and equipment (proposed manufacturing facility) | 1,229.33 | 39.24% |
Working capital requirements | 1,700.00 | 54.27% |
General corporate purposes | 203.24 | 6.49% |
Total Net Proceeds | 3,132.57 | 100.00% |
The largest allocation of Rs. 1,700.00 Lakhs (54.27%) is earmarked for working capital, reflecting the company's need to fund higher inventory levels and extended trade receivable cycles as it scales its B2B customer base and expands into new geographies.
The Rs. 1,229.33 Lakhs capex allocation will be used to purchase machinery and equipment for three proposed manufacturing lines: a solar panel recycling and silver extraction production line (capacity 3,000 metric tonnes per year), a manufacturing line for structures used in solar roofing and mounting applications (capacity 1,500 metric tonnes per year), and a solar frame production line (capacity 96,00,000 pieces per year).
This manufacturing facility at Plot No. 6 to 13, Chhapara, Rajkot, Gujarat is targeted to be commissioned within 6 months of receipt of funds, enabling backward integration and reducing dependency on third party suppliers.
FINANCIAL PERFORMANCE
Infrax Renewable Limited has delivered exceptional revenue growth over the past three fiscal years. Revenue from operations grew from Rs. 965.24 Lakhs in FY2024 to Rs. 9,321.49 Lakhs in FY2026, a compound annual growth rate of approximately 210.76% as stated in the prospectus.
This growth was driven by expansion into ground mounted solar projects, a growing dealer network (from 720 dealers in FY2024 to 2,830 in FY2026), and geographic expansion beyond Gujarat into Uttar Pradesh, Madhya Pradesh, Maharashtra and Rajasthan.
Metric | FY2024 | FY2025 | FY2026 |
Revenue from Operations (Rs. Lakhs) | 965.24 | 3,046.86 | 9,321.49 |
EBITDA (Rs. Lakhs) | 175.90 | 450.19 | 1,456.19 |
EBITDA Margin | 18.22% | 14.78% | 15.62% |
PAT (Rs. Lakhs) | 95.76 | 285.18 | 1,020.14 |
PAT Margin | 9.92% | 9.36% | 10.94% |
Net Worth (Rs. Lakhs) | 140.33 | 188.61 | 1,577.20 |
Debt to Equity Ratio | Nil | 1.60x | 0.44x |
EBITDA grew from Rs. 175.90 Lakhs in FY2024 to Rs. 1,456.19 Lakhs in FY2026. EBITDA margins declined from 18.22% in FY2024 to 14.78% in FY2025, then partially recovered to 15.62% in FY2026, reflecting the margin impact of growing the lower margin ground mounted segment and trading operations alongside the core residential rooftop business. PAT crossed Rs. 1,000 Lakhs in FY2026.
Net worth expanded sharply in FY2026 from Rs. 188.61 Lakhs to Rs. 1,577.20 Lakhs, aided by the fresh capital raised through private placements. Debt to equity, which rose to 1.60x in FY2025 when the company took on short term borrowings to fund working capital growth, declined to 0.44x by FY2026.
The extremely elevated RoE and RoCE figures across all three years reflect the very small equity and capital base of the company during this period, which is in turn a consequence of its recent conversion from a partnership firm in September 2024. As accumulated earnings and fresh capital have begun building the balance sheet, RoCE has normalised from 125.59% in FY2024 to 63.89% in FY2026, though both metrics remain high by any conventional standard.
EPS grew from Rs. 1.20 in FY2024 to Rs. 10.86 in FY2026, and NAV per share increased from Rs. 1.75 to Rs. 15.77, with the latter reflecting post bonus issue adjusted figures. At the offer price of Rs. 104, the P/E ratio based on FY2026 EPS is 9.58x.
PEER COMPARISON
The prospectus identifies three listed industry peers operating in the solar energy sector: Acme Solar Holdings Limited, Alpex Solar Limited, and Solarium Green Energy Limited. The following table presents a comparison of key metrics as of March 31, 2026:
Company | CMP (Rs.) | P/E (x) | RoNW (%) |
Infrax Renewable Limited | 104 (Issue Price) | 9.58 | 64.68% |
Acme Solar Holdings Limited | 401.90 | 49.25 | 9.84% |
Alpex Solar Limited | 877.75 | 10.90 | 35.87% |
Solarium Green Energy Limited | 154.00 | 15.78 | 12.58% |
The industry P/E range as computed in the prospectus spans from a low of 10.90x (Alpex Solar) to a high of 49.25x (Acme Solar), with an average of 25.31x. At a P/E of 9.58x based on FY2026 restated EPS, Infrax is priced at a discount to the industry average and below the lowest peer multiple. The high RoNW of Infrax (64.68%) relative to peers (9.84% to 35.87%) reflects the thin equity base from which earnings are computed rather than a structural profitability advantage.
It is important to note that the listed peers operate at a significantly larger scale. Acme Solar Holdings reported revenue of Rs. 2,02,337.90 Lakhs and Alpex Solar reported revenue of Rs. 2,22,327.19 Lakhs in FY2026, compared to Infrax's Rs. 9,321.49 Lakhs. Solarium Green Energy, the closest in scale of the three peers at Rs. 36,815.10 Lakhs, still operates at approximately 4 times the revenue of Infrax. The peer comparison must therefore be read in the context of material differences in business scale, market position, and the nature of operations.
KEY RISKS
Very Early Stage of Formal Corporate History
Infrax Renewable Limited was incorporated as a public limited company only in September 2024, having previously operated as a partnership firm since 2019. The restated financial statements presented in the prospectus cover periods when the entity operated as a partnership firm. The limited corporate track record increases uncertainty around governance, compliance maturity, and the reliability of historical financials as a guide to future performance.
Concentrated Geography and Customer Base
Substantially all of the company's revenues in FY2024 and FY2025 were derived from the state of Gujarat, with 97.41% of FY2026 revenues still coming from Gujarat based operations. Heavy dependence on a single state exposes the business to changes in state government policies, subsidy structures, and utility procurement behaviour. Geographic diversification, while underway, adds operational and working capital complexity.
Working Capital Intensive Business Model
The company's working capital gap expanded from Rs. 112.41 Lakhs in FY2024 to Rs. 1,665.84 Lakhs in FY2026, driven by growing inventories and trade receivables. The projected working capital gap is expected to increase further to Rs. 2,733.62 Lakhs in FY2027 and Rs. 4,907.02 Lakhs in FY2028. A significant portion of the IPO proceeds (Rs. 1,700.00 Lakhs, or 54.27% of net proceeds) is being deployed into working capital, indicating that the business model is capital intensive relative to its scale.
OFS at a Very Large Premium to Promoter Acquisition Cost
The two promoter selling shareholders are offering shares at Rs. 104 per share against a weighted average cost of acquisition for secondary transactions of Rs. 10 per share. This represents a very significant monetisation premium for the selling promoters at the time of listing, even as the company simultaneously raises fresh capital. Prospective investors should weigh this dilution context carefully.
Unproven Manufacturing Capability
The company currently operates entirely as an asset light EPC and trading business with no in house manufacturing. The proposed manufacturing facility for solar panel recycling, roofing structures, and solar frames represents a new business model. The company has not yet placed firm orders for machinery, most regulatory approvals are yet to be obtained, and the manufacturing operations are expected to start only within 6 months of fund receipt. Execution delays, cost overruns, or slower than expected demand for manufactured products could erode the expected returns from capex deployment.
SEBI Investigation Involving Market Maker
The market maker for this IPO, Shreni Shares Limited, is reportedly subject to an ongoing SEBI investigation. Any adverse regulatory outcome against Shreni Shares could affect market making activity for the stock post listing, potentially impacting liquidity in early trading periods.
KEY POSITIVES
Exceptional Revenue Growth
Revenue from operations grew at a CAGR of approximately 210.76% from Rs. 965.24 Lakhs in FY2024 to Rs. 9,321.49 Lakhs in FY2026, crossing Rs. 90 Crore in revenue within just two years of operating as a scaled entity. This growth was supported by a rapidly expanding dealer network (720 to 2,830 dealers), geographic expansion into new states, and entry into the larger ground mounted segment which now contributes over 41% of revenue.
Diversified Solar Business Model
The company operates across three complementary segments: EPC services (both rooftop and ground mounted), product trading, and IPP power generation. This diversification reduces reliance on any single revenue stream and creates cross selling opportunities across the dealer and customer network. The IPP segment in particular provides a recurring revenue base through the Power Purchase Agreement with PGVCL, adding stability to an otherwise project driven business.
Strong Orderbook Visibility
The ongoing orderbook as of August 20, 2026 stands at 3,100 projects amounting to Rs. 6,244.19 Lakhs, providing meaningful near term revenue visibility. This orderbook, which exceeds two thirds of FY2026 annual revenue, indicates sustained commercial traction and the ability to convert demand into contracted business.
Government Programme Empanelment
The company is empaneled as a national vendor for implementation of solar power projects under the PM Surya Ghar: Muft Bijli Yojana Rooftop Solar Programme, which aims to install rooftop solar plants in one crore households by 2026 to 2027. This empanelment provides access to a large government supported demand pipeline and lends credibility to the company's technical and quality credentials, supporting customer acquisition efforts in both residential and commercial segments.
Backward Integration to Reduce Input Costs
The proposed manufacturing facility will produce solar mounting structures, solar frames, and enable solar panel recycling in house, addressing components that are currently procured from third party suppliers. Successful commissioning of these facilities is expected to improve supply chain control, reduce material costs, support margins, and create an additional revenue stream from sale of manufactured components to external customers.
Attractive Valuation Relative to Peers
At an issue price of Rs. 104, the P/E ratio of 9.58x based on FY2026 restated EPS of Rs. 10.86 is below the lowest peer P/E of 10.90x (Alpex Solar) and well below the industry average P/E of 25.31x as computed in the prospectus. While scale differences and the corporate history context must be considered, the valuation does not appear to price in a premium for the company's growth trajectory relative to the broader solar sector.
Disclaimer
The content on this website is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or a solicitation to buy or sell any security, mutual fund, or financial instrument. Equity Research India is not a SEBI-registered investment advisor or research analyst, and nothing on this site constitutes personalized financial advice.
Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Past performance is not indicative of future returns. NAV, returns, rankings, and other data may change and may not reflect the most current information at the time of reading.
Readers should conduct their own due diligence and consult a SEBI-registered financial advisor before making any investment decisions. Equity Research India and its authors accept no liability for any loss or damage arising from the use of this content.
Comments