IPO Launch Timeline and Pricing
GK Energy Limited has officially opened its initial public offering (IPO) to the public, with the subscription window spanning from September 19 to September 23. The company has priced the issue within a price band of ₹145 to ₹153 per share, aiming to raise a total of ₹464.26 crore.
Subscription Status: Strong Demand from All Investor Categories
As of Day 2 at 5 PM, the GK Energy IPO witnessed a robust response from investors. The issue was oversubscribed by 6.41 times, receiving bids for 14.22 crore shares, far exceeding the 2.12 crore shares available.
- Retail Investors: Subscribed 6.84 times
- Non-Institutional Investors (NIIs): Subscribed 10.05 times
- Qualified Institutional Buyers (QIBs): Subscribed 2.90 times
This strong subscription indicates a high level of investor confidence in the company’s fundamentals and growth prospects.
Grey Market Premium (GMP) Insights: Signs of Positive Listing
The IPO is showing positive signals in the grey market, with a current grey market premium (GMP) of ₹22. This suggests that GK Energy shares are trading at a projected listing price of ₹175, approximately 14.38% higher than the upper band price of ₹153. This could be a good indicator of strong post-listing performance, subject to market conditions.
IPO Structure: Fresh Issue and Offer for Sale (OFS)
The IPO comprises two components:
- Fresh Issue: ₹400 crore through issuance of 2.61 crore new equity shares
- Offer for Sale (OFS): ₹64.26 crore through the sale of 42 lakh shares by promoters Gopal Rajaram Kabra and Mehul Ajit Shah
Retail investors can bid for a minimum of 98 shares, requiring a capital outlay of ₹14,994 at the upper price band.
Key Dates to Remember
- IPO Close Date: September 23
- Basis of Allotment: Expected on September 24
- Listing Date: Scheduled for September 26 on both NSE and BSE
IIFL Capital Services Ltd. is managing the issue as the book-running lead manager, while MUFG Intime India Pvt. Ltd. serves as the registrar.
Use of IPO Proceeds
GK Energy intends to utilise the IPO proceeds primarily for:
- Long-term working capital requirements: ₹322.5 crore
- General corporate purposes: Remaining funds
Company Overview: A Leader in Solar EPC Services
Founded in 2008, GK Energy Limited specializes in providing Engineering, Procurement, and Construction (EPC) services for solar-powered agricultural water pump systems. These systems are primarily delivered under the PM-KUSUM scheme, aimed at empowering farmers with sustainable energy solutions.
GK Energy operates through an asset-light model, sourcing solar components such as panels and pumps from trusted vendors and marketing them under the “GK Energy” brand. The company offers end-to-end services, from initial survey and design to installation, commissioning, and long-term maintenance.
Analyst Recommendations: Should You Subscribe?
Angel One’s View
Leading brokerage Angel One has issued a ‘Subscribe’ recommendation, citing multiple strengths:
- Attractive valuation at a post-IPO P/E of 23.3x, lower than sector peers
- Strong financial performance in FY2024 with healthy revenue and profit growth
- Presence in a high-growth renewable energy segment, backed by government initiatives like PM-KUSUM
Geojit Investments’ Perspective
Geojit Investments has echoed a similar sentiment, noting that GK Energy appears fairly valued for FY25 earnings when compared with its industry peers. They highlighted the company’s:
- Strong execution capabilities
- Government-backed demand outlook
- Growth potential in the solar energy space
Geojit recommends subscribing to the IPO, particularly for medium- to long-term investors.
