Ahasolar Technologies Limited IPO
i. Ahasolar Technologies is engaged in the business of CleanTech enabling Energy Transition through Digital Transformation and henceforth empowering stakeholders to adopt renewable energy. The Company do 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.
ii. The primary focus in renewable energy has been in solar industry and to cater it, they developed an AI based intelligent Solar Digital Platform. They have developed Software as a Service (SaaS) productsfor solar companies to streamline the processes, design PV, do project management and monitor generation alongwith 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 serivices area.
Our Core business can be divided in following categories
a) Solar Software Service
b) Solar Marketplace
c) Solar Advisory and Consultancy Service
Our company is also involved in the business of Advisory for sustainable development and energy transition to renewables.
Our key expertise include:
1. Software and Advisory on Process Management
2. Software related to solar EPC company for PV design, project management, procurement, monitoring, ERP, CRM
3. Solar Project Management
4. Advisory on policy and regulation related to renewable energy
5. Transactional Advisory on transformation of companies, cities and states to renewables
6. E-commerce for solar products 7. Drone Surveys 8. Automation
Competitive Strengths
i. Experienced Promoters and Management Team
ii. Well-defined organizational structure
iii. Existing Supplier Relationship
Objects of the Ahasolar Technologies Limited IPO:
Ahasolar Technologies Limited IPO Details:
| Open Date: | Jul 10 2023 |
| Close Date: | Jul 13 2023 |
| Total Shares: | 818,400 |
| Face Value: | ₹ 10 Per Equity Share |
| Issue Type: | Fixed Price Issue IPO |
| Issue Size: | 12.84 Cr. |
| Lot Size: | 800 Shares |
| Issue Price: | ₹ 157 Per Equity Share |
| Listing At: | BSE SME |
| Listing Date: | Jul 21 2023 |
Promoters And Management:
Financials of Ahasolar Technologies Limited IPO:
| Particular (In Lakhs) | Mar-20 | Mar-21 | Mar-22 | Mar-23 |
| Equity Share Capital | 1.00 | 1.00 | 1.00 | 226 |
| Reserves | 1 | 9 | 78 | 179 |
| Borrowings | 23 | 24 | 58 | 0 |
| Trade Payables | 104 | 29 | 39 | 14 |
| Other Liabilities | 10 | 22 | 62 | 107 |
| Total Liabilities | 136 | 75 | 159 | 120 |
| Net Block | 0.18 | 0.62 | 3 | 8 |
| Other Assets | 76 | 12 | 51 | 87 |
| Total NC Assets | 76 | 12 | 54 | 95 |
| Receivables | 35 | 21 | 137 | 282 |
| Inventory | 11 | 0 | 0 | 0 |
| Cash & Bank | 0.49 | 12 | 23 | 48 |
| Other Assets | 16 | 41 | 23 | 100 |
| Face value | 10 | 10 | 10 | 10 |
| Particular (In Lakhs) | Mar-20 | Mar-21 | Mar-22 | Mar-23 |
| Sales | 129 | 188 | 1,713 | 2,104 |
| Purchases of Stock In Trade | 0 | 0 | 1,453 | 1,561 |
| Change in Inventory | -10 | 11 | 0 | 0 |
| Employee Cost | 23 | 38 | 66 | 199 |
| Other Expenses | 113 | 128 | 100 | 151 |
| Other Income | 0.03 | 0.12 | 1 | 1 |
| EBITDA | 2 | 11 | 95 | 195 |
| EBITDA Margin | 1.87% | 5.87% | 5.55% | 9.24% |
| Depreciation | 0.13 | 0.29 | 3 | 21 |
| Profit before tax | 2 | 11 | 93 | 173 |
| Tax | 0.21 | 3 | 24 | -3 |
| Net profit | 2 | 8 | 69 | 176 |
| NPM (%) | 1.60% | 4.21% | 4.00% | 8.37% |
| Particular (In Lakhs) | Mar-20 | Mar-21 | Mar-22 | Mar-23 |
| Cash From Operating Activity | ||||
| Profit From Operation | 2 | 8 | 71 | 198 |
| Receivable | -56.27 | 0.18 | -98.47 | -222 |
| Loans And Advances | -70 | 64 | 10 | -18 |
| Other WC Items | 104.68 | -62.23 | 49.33 | 20 |
| Working Capital Changes | -22 | 2 | -39 | -220 |
| Net Cash Inflow from Operating Activity | -20 | 10 | 32 | -22 |
| Cash from Investing Activity | ||||
| Fixed assets purchased | -2 | -1 | -54 | -45 |
| Net cash inflow from investing activities | -2 | -1 | -54 | -45 |
| Cash from Financing Activity | ||||
| Proceeds from shares | 0 | 0 | 0 | 150 |
| Proceeds from borrowings | 22 | 1 | 34 | 0 |
| Repayment of borrowings | 0 | 0 | 0 | -58 |
| Net Cash Flow | 0.12 | 11 | 12 | 25 |
Comparison With Peers:
Recommendation on Ahasolar Technologies Limited IPO:
Review of Ah Solar Tech by Umesh Paliwal, Founder InvestorZone!
Business Overview of Ah Solar 1. Industry and Target Market: The company is in the cleantech industry, specifically renewable energy, with a focus on solar energy. It serves a diverse range of customers, including solar companies, Original Equipment Manufacturers (OEMs), governments, Solar EPC Companies, and Corporate Consultancy Firms. 2. Product/Services: The company offers Software-as-a-Service (SaaS) products for solar companies and governments. These services include project management, design PV, generation monitoring, and a marketplace to connect supply and demand. It also provides advisory services on solar project management and solar plant audits. 3. Unique Value Proposition: The company's value proposition lies in its ability to digitally transform the renewable energy sector through AI-based digital solutions and advisory services. They position themselves as a facilitator for stakeholders to adopt renewable energy more efficiently and effectively. 4. Revenue Model: The revenue model is based on a SaaS model, which typically involves a subscription fee for access to the software. It may also derive revenue from its advisory services, which are likely charged on a project basis. And, majority of revenue comes from selling solar products. Basic Plan = ~12000 per year Standard Plan = ~80000 per year Premium = ~86000 per year For more detail visit- https://www.ahasolar.in/pricing Apart from this company also generates revenue from selling solar products via its online market place. https://www.ahasolar.in/e-marketplace5. Competitive Advantage: The company has a competitive edge through its innovative AI-based intelligent Solar Digital Platform, and its integrated marketplace that digitally connects demand and supply. Recognition from the DPIIT (Department for Promotion of Industry and Internal Trade) may also provide credibility and potential preferential access to government contracts or support.
6. Partnerships and Alliances: The company has multiple partnerships with national, international, government, and private entities. These partnerships can offer network benefits, additional resources, and broader market reach.
7. Risk Factors: Risks could include technology obsolescence, given the fast-paced nature of the tech sector. Dependence on government contracts might also be a risk, as policy and budget changes can influence these opportunities. Moreover, the company might face competition from other tech firms offering similar services in the renewable energy sector.
Source of Revenues
1. Market-Place to buy Solar Products = 75% 2. Advisory Services = 14% 3. SaaS and Onetime Software Services =11% So, majority of the income is coming from market place. Financial Highlights 1. The revenue has increased from ~2 Cr in FY20 to ~17 Cr in Fy22. 2. PAT has increased from 2 lac in Fy20 to 68 lac in Fy22. 3. EBITDA margins in FY22 is 5.6%. Out of the total revenue of 17 Cr, a significant portion, specifically 14.68 Cr, is derived from the sales of solar products. However, it's worth noting that the gross margin on these sales is quite minimal, only at 1%. The remaining revenue of 2.44 Cr is generated from advisory services and the selling of SaaS-based services. From this, it can be inferred that while the sale of solar products constitutes the majority of the company's revenue, it contributes very little to the profit due to the extremely low margin. Hence, the profitability of the company largely relies on the higher-margin services, such as advisory and SaaS offerings. Online Market Place The company positions itself as a marketplace specializing in the sale of solar products, which forms a major share, precisely 87%, of its total revenue.However, upon analyzing their digital footprint, it appears their presence is relatively limited. Specifically, their mobile application has been downloaded a mere 10k+ times and their website garners approximately 314 monthly users. This data indicates that their digital visibility and reach are currently quite constrained, which might be affecting their potential growth in the digital market.
Conclusion The company, being relatively new in the market, has experienced significant growth in recent years by focusing on the sale of solar products such as Modules, Inverters, Junction Boxes, Cables, and MC-4 Connectors. However, online channels present tough competition with various players like Amazon, Flipkart, Waree, Loom Solar, Moglix, etc.To fuel further expansion, the company aims to raise INR 12.48 Cr through an IPO. The funds will be allocated towards setting up a Solar Plant (~INR 7 Cr), establishing an EV charging station (INR 32 Lac), and fulfilling working capital requirements (INR 2.4 Cr). The Solar Plant project is expected to take approximately 9 months for completion, with the return on equity (ROE) uncertain due to the company's lack of prior experience in this particular business.
Plus the current business model wherein majority of business is coming from sale of solar PV related products is having gross margins of just 1%.The IPO is priced at a relatively high P/E ratio of 28x, with a market capitalization of INR 50 Cr. Investors may consider waiting for the company to evolve over the next 2-3 years before determining its potential for sustained profitability, given the intense competition within the sector.
Lead Manager of Ahasolar Technologies Limited IPO:
Registrar of Ahasolar Technologies Limited IPO:
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Discussion on Ahasolar Technologies Limited IPO:
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Dear Sir, Many thanks for your Research & Analysis. But, as we don’t have enough time to go through the details of it, I am suggesting you to give your view in a nutshell either to ‘Subscribe’ or ‘Avoid’ for any IPO and provide some ‘Ratings’ for it.
Really impressed with your analysis 🙂
Conclusion The company, being relatively new in the market, has experienced significant growth in recent years by focusing on the sale of solar products such as Modules, Inverters, Junction Boxes, Cables, and MC-4 Connectors. However, online channels present tough competition with various players like Amazon, Flipkart, Waree, Loom Solar, Moglix, etc.
To fuel further expansion, the company aims to raise INR 12.48 Cr through an IPO. The funds will be allocated towards setting up a Solar Plant (~INR 7 Cr), establishing an EV charging station (INR 32 Lac), and fulfilling working capital requirements (INR 2.4 Cr). The Solar Plant project is expected to take approximately 9 months for completion, with the return on equity (ROE) uncertain due to the company’s lack of prior experience in this particular business. Plus the current business model wherein majority of business is coming from sale of solar PV related products is having gross margins of just 1%.
The IPO is priced at a relatively high P/E ratio of 28x, with a market capitalization of INR 50 Cr. Investors may consider waiting for the company to evolve over the next 2-3 years before determining its potential for sustained profitability, given the intense competition within the sector.
Online Market Place The company positions itself as a marketplace specializing in the sale of solar products, which forms a major share, precisely 87%, of its total revenue.
However, upon analyzing their digital footprint, it appears their presence is relatively limited. Specifically, their mobile application has been downloaded a mere 10k+ times and their website garners approximately 314 monthly users. This data indicates that their digital visibility and reach are currently quite constrained, which might be affecting their potential growth in the digital market.
Financial Highlights
1. The revenue has increased from ~2 Cr in FY20 to ~17 Cr in Fy22.
2. PAT has increased from 2 lac in Fy20 to 68 lac in Fy22.
3. EBITDA margins in FY22 is 5.6%.
Out of the total revenue of 17 Cr, a significant portion, specifically 14.68 Cr, is derived from the sales of solar products. However, it’s worth noting that the gross margin on these sales is quite minimal, only at 1%. The remaining revenue of 2.44 Cr is generated from advisory services and the selling of SaaS-based services. From this, it can be inferred that while the sale of solar products constitutes the majority of the company’s revenue, it contributes very little to the profit due to the extremely low margin. Hence, the profitability of the company largely relies on the higher-margin services, such as advisory and SaaS offerings.
Source of Revenues
1. Market-Place to buy Solar Products = 75%
2. Advisory Services = 14%
3. SaaS and Onetime Software Services =11%
Business Overview of Ah Solar
1. Industry and Target Market: The company is in the cleantech industry, specifically renewable energy, with a focus on solar energy. It serves a diverse range of customers, including solar companies, Original Equipment Manufacturers (OEMs), governments, Solar EPC Companies, and Corporate Consultancy Firms.
2. Product/Services: The company offers Software-as-a-Service (SaaS) products for solar companies and governments. These services include project management, design PV, generation monitoring, and a marketplace to connect supply and demand. It also provides advisory services on solar project management and solar plant audits.
3. Unique Value Proposition: The company’s value proposition lies in its ability to digitally transform the renewable energy sector through AI-based digital solutions and advisory services. They position themselves as a facilitator for stakeholders to adopt renewable energy more efficiently and effectively.
4. Revenue Model: The revenue model is based on a SaaS model, which typically involves a subscription fee for access to the software. It may also derive revenue from its advisory services, which are likely charged on a project basis. And, majority of revenue comes from selling solar products. Basic Plan = ~12000 per year Standard Plan = ~80000 per year ` Premium = ~86000 per year For more detail visit- https://www.ahasolar.in/pricing Apart from this company also generates revenue from selling solar products via its online market place. https://www.ahasolar.in/e-marketplace
5. Competitive Advantage: The company has a competitive edge through its innovative AI-based intelligent Solar Digital Platform, and its integrated marketplace that digitally connects demand and supply. Recognition from the DPIIT (Department for Promotion of Industry and Internal Trade) may also provide credibility and potential preferential access to government contracts or support.
6. Partnerships and Alliances: The company has multiple partnerships with national, international, government, and private entities. These partnerships can offer network benefits, additional resources, and broader market reach.
7. Risk Factors: Risks could include technology obsolescence, given the fast-paced nature of the tech sector. Dependence on government contracts might also be a risk, as policy and budget changes can influence these opportunities. Moreover, the company might face competition from other tech firms offering similar services in the renewable energy sector.