Found this bizarre company which is trading at a Market Cap of ~16 cr and boasts metrics for a company that should be valued at least ~100 to 200 cr. Its a microcap and as such very little information is available. I will try to do justice by giving as much information about the company as possible.
About Solex Energy
History of the company
Solex Energy was established in 1995 as Sun Energy Systems and has been in the business of solar since. They started with manufacturing solar lighting systems and solar powered boilers for very niche and small customers.
The company transitioned to manufacturing of solar panels in 2007 and has mostly conducted business in the states of Gujarat and Maharashtra.
In 2014, the company changed its named to Solex Energy Limited (transitioned from a proprietorship to a pvt limited company) and then subsequently listed itself in 2018 on NSE via NSE Emerge platform (which enables micro cap and small businesses to tap into public markets).
Products of the company
The company’s main products are PV (photo voltaic) cell modules that are main constituents of solar plants. The company also produces solar water pumps and solar powered submersible pumps.
Apart from these main products the company also manufactures
Promoter of the company
Mr. Kalpesh Patel is the promoter for the company and has been with the company since its inception. He currently holds over 70% of the company.
He seems to be exiting the company and become a minority shareholder. By virtue of open offer acquisition he has tendered a majority of his shares to the following people (who are in effect the new promoters of the company). This is likely done as the company is getting bigger and needs a more experienced team to manage it and take it forwards.
The new promoters are Nemji Solar group based out of Surat Gujrat. The group is on a solar consolidation spree and has deep pockets. The aim to invest half a billion dollars into solar PV manufacturing by 2025.
Nemji Solar, a new entrant into the solar industry has announced that it plans to start operating a 1 GW solar module manufacturing facility by April 2020. The Gujarat-based company also said that it...
The new promoters have bought the share of the company at Rs 35 each which is more than the current market price of Rs 33 (as of 25th March 2021).
New Promoters for the company
(source: disclosures on NSE website)
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Source: Leading Solar Panel manufacturing company, Anand | Solex Energy Ltd
By the Numbers
Sales: 138cr
ROIC: 16.3%
ROE: 22.2%
ROCE: 28.6%
Book Value per share: 44.8
Debt: 5.08cr
FCF: 1.95cr
PAT: 4.46cr
EPS: 9.01
Promoter Holding: 75%
Key Triggers for the company
What I don’t like about the company
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What I like about the company
I will keep posting more about the company as I research more.
Disc: Researching, do not hold a position in the company
Extract from their credit report issued by India Ratings
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Useful Links:
Solex Energy Limited is the leading Solar Panel Manufacturer Company in Anand, Gujarat, India. We manufacture and install of various solar products.
Solex is the first Solar Panel Manufacturing company who indexed in NSE Emerge market platform. Solar rooftops,Water pumps,water Heaters are their Products.
As per the survey conducted by USAID, GERMI and CII in the month of October-November 2020 spread over a period of two months, Solex Energy Ltd has come out in […]
Estimated reading time: 1 minute
Here we get the latest updates for solar news in India, Solar Products, Solar Panel Costs, Solar Installation, Solar Panel System etc
India Ratings and Research Private Limited(India Ratings):India's Most Respected Credit Rating and Research Agency,India Ratings and Research, Indian credit rating and research agency,Credit rating India, Indian financial markets research,India...
(Edit: Updated the management section of the company to reflect changes in new promoters)
18 Likes ganesh_bastwadkar 2If The promoter Kalpesh Patel there is a big worry.
VADODARA: Former managing director of beleaguered Kemrock Industries Ltd, Kalpesh Patel, was arrested by the prevention of crime branch (PCB) on Wedne.
Tar 3Its not this Kalpesh Patel, please check and search before posting.
4 Likes Satyendra_Kumar 4How do u know that promoter is increasing his stake?
rajbiluve 5Thank you Tar for starting a thread on Solex Energy.
My thoughts were exactly as like yours. I too tried to dig a lot about this company. Below is one conversation with the content writer of the company:
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Also, there is some change in the share holding structure. New investors are going to own the 26% of the company by giving open offer @ 35/-. Also there is a preferential issue of shares.
Something is cooking @ the positive side.
Disclosure: Holding 1 Lot @ 26.5 /-
5 Likes Tar 6Thank you for sharing. I have updated the post to reflect changes in promoters. Based on my research they are being taken over by Nemji Solar which is a larger more established group also out of Surat. This group also seems to be the one with deep pockets and is investing heavily into solar/solar acquisitions.
Nemji Solar, a new entrant into the solar industry has announced that it plans to start operating a 1 GW solar module manufacturing facility by April 2020.
Est. reading time: 1 minute
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I got this clue by reading the acquisition offer and mention of Mr. Chetan Sureshchandra Shah. His email was mentioned as chetan@nemji. A quick search also revealed that he does belong to the same Nemji group.
Article also mentions him
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This is a highly illiquid stock, the risks of investing outweigh the potential returns (even if they are multibagger). I will keep researching the company and post more details about it here as the story evolves but for the time being this is not a investable security.
It may however become one in future (years/months) but as of today it is not.
Any idea why promoter holding pledge is 42.59% ?
1 Like Anand6 9Goldi-Solar-22Sep2020 (1).pdf (316.2 KB)
This is a credit rating report of a 500 MW capacity company.
My calculations : 500 mw capacity , 400 cr turnover, 60-70 cr effective debt so 7-8 cr could be int cost, 10-11 cr depreciation so 80-100 cr gross block might be, asset turnover 4, ebitda 5-6%, npm 1-2%.
This seems quite different from another listed player “Websol”- which is asset heavy , high EBITDA business.
Can any expert help here to understand what are differentiating factors?
PLI scheme announced is for >1 GW players, solex aims to be 1.2 GW player.
But looking at thin margins, task is not easy.
It’s a Good undervalued stock which has good increase in sales upto march 2020 (due to covid -19 sales somewhat declined ) and it has made good net profit also .
But promoters had pledged total shares which is risky .
The Gujarat-based solar manufacturer plans to have 1 GW of cells and 3.7 GW of module capacity operational in 2023.
1.2GW Module Manufacturing will be ready by Jan 21 and 3.7GW Module manufacturing by 2023!!!
1 Like ark 12In Oct-20, Solex was in news saying they have undertaken the ground-breaking ceremoney for for first phase (600 MW) of 1.2GW project. Since then, there has been no talk on when the plant commences operation. Anyone here has an idea as to when they are commencing? Ideally should not take more than 1.5 years per my understanding, right?
1 Like Karthisn1 13Great find , now at 270 cr Mcap. 17 X.
1 Like Pranav 15Does anyone know about the current capacity of the company for solar modules?
SOMASHEKAR_A_C 16Anybody still tracking this company?
Promoter pledge is 0%
Stock is in a clear uptrend both in weekly, daily timeframe
There was a bulk buy on 12 Apr for 0.6%
Disclosure: I am not a financial advisor. This is for informational purposes only. Please do your own research before making any investment decisions.
I am invested in the stock with 200 shares at ~1517 each.
Solex Energy (SOLEX) is an Indian company engaged in manufacturing solar photovoltaic modules and turnkey solar solutions. They currently have a manufacturing capacity of 700MW in Gujarat and are planning a significant expansion.
Growth Drivers:
Positives:
Negatives:
Immediate Triggers:
Risks:
Summary:
The stock seems like a buying oppurtunity given it’s low valuation of just 1200cr, which seems undervalued given it’s plans to reach 4.5GW of capacity, provided Chinese import curbs stay in place in India and in US till FY27 at least.
Nice Summary; if you look at Adani Enterprises annual report, they too are entering the SPV solutions in a big way; right from ingots to finished panels. This does affect Solex in terms of market share
1 Like SA24 20Surat based Solar Module Manufacturer Solex Energy Limited, has become the first Indian PV Module manufacturer to be certified with the prestigious MCS 005 certificate under the BSI Kitemark, supported by the United Kingdom Accreditation Service...
Est. reading time: 2 minutes
SA24 21India-based Solex Energy plans to invest INR 8,000 crore ($954.5 million) by 2030 to achieve 5 GW of solar PV cell manufacturing capacity and 15 GW of module capacity.
2 Likes Ram_Charan 22Anybody has idea on why promoter has decreased his shareholding in the last quarter ?
