GK Energy’s initial public offering was fully subscribed on the first day of its three-day bidding period, driven by retail investors, with analysts citing attractive valuation and strong growth prospects amid India's clean energy push.
GK Energy provides engineering, procurement and commissioning (EPC) services for solar-powered agricultural water pump systems. It is the largest supplier of these pumps under a government scheme for farmers that aims to build 10,000 MW of grid-connected renewable power plants.
The IPO comprises a fresh issue of shares worth 4 billion rupees ($45.4 million) and an offer for sale of 4.2 million shares by existing shareholders. Retail investors bid for nearly 2 times the shares on offer, as of 2:00 p.m. IST, stock exchange data showed on Friday.
The company is well poised for growth as it has become one of the key players in the solar EPC space, Canara Bank Securities said in a note.
India’s solar-powered pump systems market has grown at a compound annual rate of 15% from the financial year 2019 to 2024, reaching a market size of 39 billion rupees. The market is projected to expand to between 300 billion and 320 billion rupees by the financial year 2029, driven by government initiatives to promote renewable energy.
At the upper end of its price band of 153 rupees, GK Energy's financial year 2025 price-to-earnings ratio appears reasonably valued compared with its peers, analysts at Geojit Investments said.
"With strong execution capabilities and government-backed demand, GK Energy is poised for sustained growth," Geojit said, assigning a ‘subscribe’ rating to the issue for investors with a medium- to long-term horizon.
