GK Energy Limited, a leading provider of solar-powered agricultural water pump systems, is preparing for its initial public offering (IPO) after receiving final approval from the Securities and Exchange Board of India (SEBI) last month.
Rising Expenses Amidst Revenue Growth
According to the company’s draft red herring prospectus (DRHP), GK Energy’s financials reveal a significant increase in expenses alongside revenue growth. In FY25, total consolidated expenses amounted to ₹918.91 crore. This marks a substantial rise from previous years, where expenses increased by 33.84% from ₹271.98 crore in FY23 to ₹364.04 crore in FY24.
The cost of goods sold in FY25 stood at ₹702.69 crore, up from ₹297.81 crore in FY24 and ₹241.65 crore in FY23. Employee benefit expenses also saw a sharp increase, reaching ₹18 crore in FY25, compared to ₹8.01 crore in FY24 and ₹0.77 crore in FY23.
Finance costs rose to ₹22.35 crore in FY25, following an increase from ₹3.65 crore in FY23 to ₹6.10 crore in FY24. Depreciation and amortization expenses climbed to ₹1.42 crore in FY25, up from ₹0.67 crore in FY24 and ₹0.48 crore in FY23.
Other expenses in FY25 were ₹173.74 crore, a significant jump from ₹38.19 crore in FY24 and ₹11.93 crore in FY23.
Strong Revenue and Profit Growth
Despite the rising costs, GK Energy reported robust revenue growth. Revenue from operations in FY25 stood at ₹1,094.83 crore, a substantial increase from ₹411.09 crore in FY24 and ₹285.03 crore in FY23.
Total income in FY25 was ₹1,099.18 crore, up from ₹412.31 crore in FY24 and ₹285.45 crore in FY23. The company posted a net profit of ₹133.21 crore in FY25, following an increase from ₹36.09 crore in FY24 and ₹10.08 crore in FY23.
IPO Details and Future Plans
GK Energy’s IPO comprises a fresh issue of shares worth ₹500 crore and an offer for sale (OFS) of 84 lakh equity shares by promoters Gopal Rajaram Kabra and Mehul Ajit Shah. Of the ₹500 crore raised through the fresh issue, ₹422.45 crore is earmarked for long-term working capital requirements, with the remainder allocated for general corporate purposes.
The company also plans to reserve a portion of the IPO for eligible employees. IIFL Capital Services Limited and HDFC Bank Limited are managing the IPO, with Link Intime India Private Limited acting as the registrar.
Strategic Position in the Renewable Energy Sector
GK Energy specializes in engineering, procurement, and commissioning (EPC) services for solar-powered agricultural water pump systems, primarily under the Central Government’s PM-KUSUM scheme. The company has installed over 42,778 solar-powered pump systems as of September 30, 2024, representing approximately 8.56% of completed orders under the scheme.
With a confirmed order book worth ₹759.18 crore as of October 1, 2024, GK Energy has established a strong presence in the renewable energy market.
