Oriana Power Limited IPO

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i. Oriana Power is a company that specializes in providing solar energy solutions to industrial and commercial customers. They offer low carbon energy solutions by installing on-site solar projects such as rooftop and ground-mounted systems, as well as off-site solar farms i.e. Open access. Their business operations are primarily divided into two segments: Capital Expenditure (CAPEX) and Renewable Energy Service Company (RESCO).

ii. Under the CAPEX model, they offer Engineering, Procurement, construction, and operation of solar projects. In this model, customer invest in the Capital Expenditure at their own and Oriana does Engineering, Procurement, Construction, and Operation on behalf of the client. This model may be executed in various manners such as rooftop and ground-mounted systems, as well as off-site solar farms. Under CAPEX Model they have delivered projects with a capacity exceeding 100 MWp across various locations across India till date since commencement of our business activity in this area of service i.e. June 2017.

iii. Their clients for Capex Business includes:

➢ Hindustan Petroleum Corporation Limited
➢ Hero Motocorp Limited
➢ Indraprastha Power Generation Limited.
➢ JK Laxmi Cement Limited
➢ Tata Memorial Hospital
➢ Udaipur Cement Works Limited
➢ Indian Synthetic Rubber Private Limited
➢ Ramjas Public School
➢ Mrs. Bectors Food Specialities Limited
➢ Panchwati Prayogshala Private Limited
➢ Renew Mega Urja Pvt. Ltd. (c/o Saint Gobain Glass India Limited)

iv. Their clients for RESCO MODEL include:

➢ Hindustan Copper Limited
➢ National High Speed Rail Corporation limited
➢ Modern Delhi Public school, Faridabad
➢ Sarvodya Kanya Vidyalaya (at 21 locations in Delhi )
➢ Umang Dairies Limited ➢ ESI Hospital, Chandigarh
➢ Employee Provident Fund Organization, Faridabad

v. Business Model

1. Capex Model / EPC: Engineering, Procurement and Construction: CAPEX stands for Capital Expenditure. The CAPEX model is the most commonly employed model in India. In this model, consumers own the system, fund it, and consume the energy generated throughout the project life, so the consumer is responsible for the risks associated with the operation, management, and maintenance of the system. Often the consumer finances this through bank funding. The owner can apply for the capital subsidy provided through the CFA (Central Financial Assistance) and additional subsidies provided by the respective state governments. However, in this model, the owner has the maximum risk.

2. RESCO Model: The RESCO model (also known as the OPEX model or BOOT (Build, own, operate, transfer) involves an energy company, RESCO, arranging the necessary capital for the projects and bearing all of its associated risks. In this model, the developer makes an agreement with the roof-top owner.

Competitive Strengths

Experience Management Team:
ii. Training and Skill development programs to strengthens Operation & Maintenance Team
iii. Investment in Subsidiary Companies

Objects of the Oriana Power Limited IPO:

The company intends to utilize the net proceeds for the Following Objects: i. Working capital requirement: This refers to the funds needed to cover day-to-day operating expenses, such as salaries, rent, utilities, and inventory. ii. Investment in subsidiary companies iii. Capital expenditure: This could include investments in technology, equipment, and infrastructure to support the growth and expansion of the business.

Oriana Power Limited IPO Details:

Open Date: Aug 01 2023
Close Date: Aug 03 2023
Total Shares: 5,055,600
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 59.66 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 115-118 Per Equity Share
Listing At: NSE Emerge
Listing Date: Aug 11 2023

Promoters And Management:

Mr. Rupal Gupta aged 38 years is Promoter and Managing Director of the company. He is An Enthusiastic Leader with passionate thoughts and 15 years of industrial experience. He leads the team with a clear focus and educate them with required skillset. He has an ability to boost up the team with his words & bring out the best potential from them. He also has the risk-taking capabilities. An innovator by nature, who has a tremendous market knowledge and business skills. He has vast knowledge of Instrumentation, Weather monitoring, Data Forecasting and Manufacturing of Electrical panels. He has been very successful in setting up of world class manufacturing units in electrical industry. Currently, he is heading the Solar Distribution, Product sales and overall operations of the company. Mr. Anirudh Saraswat, aged 37 years, is an Executive Director of the Company. An accomplished business leader with a wealth of knowledge and expertise in various facets of business. With over 14 years of experience in business and new product development, he has worked extensively gaining valuable exposure and insights. In his role as a leader, he excels at managing developing teams, ensuring that project tasks are aligned and inspiring his colleagues to achieve goals and stive for excellence. He is committed to delivering high-quality services to clients and has a broad background in overseeing all aspects of an organization’s operations, including business development, manufacturing, delivery of Mr. Parveen Kumar, aged 38 years, is an Executive Director of the Company. He is an Innovative Leader with technique as his arm and has been capturing the market since last 15 years in Solar Industry, with vast knowledge and experience of solar products. He provides technical direction from the scratch to the last, manages the technical resources in the most economical manner, is consistent in his thoughts and along with the team delivers high-quality services to the clients. After the degree completion of Electrical Engineering, he started his career as Research Associate with MNRE R&D Centre at Solar Energy Center (currently known as NISE). Because of his great technical skills, he got a chance and run the management & currently, he is backbone of Oriana Power for all the innovation & latest products development.

Financials of Oriana Power Limited IPO:

A. Balance Sheet
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Equity Share Capital 307 616 671
Reserves 464 1,160 2,951
Borrowings 75 769 1,489
Trade Payables 1,043 2,353 1,148
Other Liabilities 1,076 675 1,541
Total Liabilities 2,194 3,797 4,178
Net Block 9 10 130
Investments 668 1,206 3,087
Other Assets 25 49 64
Total NC Assets 701 1,264 3,280
Receivables 1,569 2,404 3,082
Inventory 64 78 551
Cash & Bank 2 0.14 3
Other Assets 629 1,825 883
Face value 10 10 10
B. Profit & Loss Statement
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Sales 3,374 10,077 13,294
Raw Material Cost 2,831 8,802 10,802
Employee Cost 104 287 375
Other Expenses 50 88 296
Other Income 3 69 102
EBITDA 393 970 1,922
EBITDA Margin 11.63% 9.62% 14.46%
Depreciation 3 5 9
Interest 8 32 150
Profit before tax 381 933 1,741
Tax 99 237 472
Net profit 282 696 1,269
NPM (%) 8.36% 6.85% 9.46%
C. Cash Flow Statement
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 386 965 1,899
Receivable -1,126 -836 -677
Inventory -42 -14 -473
Payable 657 1,310 -1,204
Loans And Advances -270 -1,371 1,012
Other WC Items 690 265 1,236
Working Capital Changes -91 -646 -106
Direct Taxes 99 237 472
Net Cash Inflow from Operating Activity 196 82 1,320
Cash from Investing Activity
Fixed assets purchased -4 -6 -129
Investments purchased -493 -538 -1,881
Other investing items -4 -19 -14
Net cash inflow from investing activities -500 -564 -2,024
Cash from Financing Activity
Proceeds from shares 270 309 55
Intrest paid fin -8 -32 -150
Other financing items 0 203 802
Net Cash Flow -43 -2 3

Comparison With Peers:

Name of the Company
Revenue (In Crore)
PAT (In Crore)
EPS ( in Rs)
Mcap (In Crore)
Oriana Power Limited 133 13 6.6 17.8 118 226
KPI Green Energy Limited 644 110 30.3 27.8 846 3057
Gensol Engineering Limited 366 27 21.8 70.1 1,528 1,867
* All the data is as per FY23.

Recommendation on Oriana Power Limited IPO:

Review and Recommendation of Oriana Power SME IPO by IZ team is 6/10

1. Business Model of the Oriana Power:

Capex Model / EPC: ( EBITDA is 14% in this business ) a. Oriana Power offers Engineering, Procurement, and Construction services. b. Customers invest in the capital expenditure themselves. c. Oriana manages and operates the project on behalf of the customer. d. Clients for the Capex Business cover a broad range of industries from energy to education. e. Energy produced from these projects is consumed by the customer throughout the project's life. f. The customer bears the risks associated with the operation, management, and maintenance of the system. RESCO Model: a. Oriana Power serves as the Renewable Energy Service Company (RESCO). b. They handle the capital needs for the projects and bear all associated risks. c. An agreement is made between the developer (Oriana Power) and the rooftop owner. d. Clients for the RESCO model range from governmental bodies to educational institutions.

2. Management

The leadership at Oriana Power consists of Rupul Gupta, Anirudh Saraswat, and Parveen Kumar. All three are seasoned professionals with engineering backgrounds and boast a decade to a decade and a half of experience in the solar industry. Notably, Parveen Kumar initiated his journey as a Research Associate with the MNRE R&D Centre at the Solar Energy Center, now known as NISE. His profound technical acumen propelled him to a pivotal role in management, making him the linchpin for innovations and product development at Oriana Power. All founders are in their late 30s, exuding youthful dynamism. Remarkably, over the past decade, their collective efforts have significantly contributed to the company's growth.

3. Growth in the Business

a. The revenue has grown from 5 Cr in Fy19 to 132 Cr in Fy23. This is excellent growth. b. EBITDA margins in the business is around 14% in Fy23. c. The PAT has grown from 0.35 Cr in Fy19 to 12 Cr in Fy23. This is excellent growth. d. In the last 3 years, the company has generated a cash from operations ~16 Cr.

4. Risks in the Business

a. The success of business hinges on consistently securing bids for solar power projects.The Solar Industry is very competitive. b. In RESCO model if client back out then chances of loss would be high.

5. Valuation

The Valuation looks fairly priced at P/E of 17x and Mcap of 225 Cr.

Lead Manager of Oriana Power Limited IPO:

  1. Corporate Capital Ventures Private Limited

Registrar of Oriana Power Limited IPO:

  1. Skyline Financial Services Private Ltd

Company Address:

Oriana Power Limited Flat No. 412A, Building No. 43, Chiranjiv Tower, Nehru Place, New Delhi - 110019 Phone: +91 – 78178 03330 Email: cs@orianapower.com Website: https://orianapower.com/

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