India’s clean energy sector is witnessing rapid IPO decline as interest from the investor community reduces and valuations decline. According to Bloomberg, India has witnessed only two IPOs from transition industry companies until now in 2025, as opposed to 14 clean energy IPOs in 2024 that garnered more than $2.3 billion in the second half alone.
The 2025 IPOs have been Solarium Green Energy, a manufacturer of solar modules, and Maxvolt Energy Industries, a manufacturer of batteries, collectively valued at a stingy $18 million, aptly pointing to the downfall of the investor appetite for green energy listings.
Is This Market Sentiment the Death Knell for the Green Premium?
Several factors are thought to justify the slump in clean energy IPOs among the financial experts:
1. Valuations Are on the Decline: Investment bankers are advising companies to lower IPO valuations by up to 30%, since investors have become cautious about paying a premium for green stocks.
2. Shift in Investor Priorities: According to Edward Lees, co-manager of BNP Paribas’ Emerging Markets Environmental Solutions fund, investors are now focused more on profitability than sustainability, thereby decreasing their tolerance level for overvalued clean energy companies.
3. Market Slowdown: Apparently the growth of the transition energy sector lost steam, hence derailing the inflows for IPOs.
Regulatory and Market Headwinds for Renewable Projects
India’s renewable energy sector faces structural challenges that go beyond investor sentiment and hamper IPO activity:
- Delays in Securing Offtake Agreements: Project developers in wind and solar are unable to secure long-term power purchase agreements (PPAs) with the grid operators, according to IEEFA (Institute for Energy Economics and Financial Analysis).
- Administrative Hurdles: Project execution is delayed with nearly 35 GW of new wind and solar capacity awaiting regulatory approval.
- Falling Renewable Energy Prices: There is an expectation that, as solar and wind prices continue their downward trend, grid operators do not want to be locking themselves into long-term deals at today’s prices.
Bright Optimism Distilled from IPO Woes
BloombergNEF, despite all the near-term hoodoo, states that India’s clean energy sector is on track for record-setting new installations in 2025. The renewable targets already created in India, along with industry support from the government, keep the sector moving forward.
But experts argue that, for a comeback in IPO fodder, clean energy companies must show large profits, build long-term contracts, and clear a pathway for regulatory concerns.
