GK Energy IPO: 7 Key Points Before you apply for this IPO
GK Energy IPO is now open for subscription and I am applying for this IPO, targeting reasonable to good listing gains and a medium-to-long-term hold. GK Energy is India’s largest pure-play EPC provider for solar-powered agricultural water pump systems under the PM-KUSUM Scheme ☀️. Here are the 7 key points why this company is on my radar.
1. Strong Market Position & Order Book
GK Energy holds a dominant position in a high-growth sector. The company has completed 7.37% of all pump installations under Component B of the PM-KUSUM Scheme. It's a vendor in five key states—Maharashtra, Haryana, Rajasthan, Uttar Pradesh, and Madhya Pradesh—which together account for 86% of the total approved solar-powered pumps under the scheme. This gives them a massive addressable market.
The company's order book is a major positive. As of August 15, 2025, it stood at an impressive ₹1,029 Cr, with ₹1,009 Cr specifically for pump installations (around 42,000 pumps). This provides strong revenue visibility for the coming quarters.
2. Business Model and Growth
GK Energy's business is split into two main verticals:
- EPC for farmers: This constitutes 84% of their revenue, driven by government schemes like PM-KUSUM and Maharashtra's Magel Tyala Saur Krushi Pump Yojana.
- EPC for other companies: This makes up the remaining 15% of their revenue.
The company has shown tremendous financial growth, with revenue increasing from ₹285 Cr in FY23 to ₹1,099 Cr in FY25, and PAT soaring from ₹10 Cr to ₹133.2 Cr in the same period. Margins have also improved significantly.
3. Backward Integration to Boost Margins
Currently, GK Energy outsources the manufacturing of its pumps and solar modules. However, the company is now making a strategic move to foray into manufacturing its own solar panels for captive use. The plan is to set up a 1 GW solar panel manufacturing capacity by the end of September 2026. This is a crucial development. Solar panels account for about 40% of the total bill of materials for solar-powered pump systems. This backward integration will help the company to improve margins and reduce reliance on third-party suppliers, a key risk factor for any pure-play EPC company.
4. IPO Details and Valuation
| Particulars | Details |
|---|---|
| Issue Dates | September 19 - 23, 2025 |
| Price Band | ₹145 - ₹153 per share |
| Issue Size | ₹464.26 Cr (Fresh: ₹400 Cr, OFS: ₹64.26 Cr) |
| Lot Size | 98 shares (~₹14,994) |
| FY25 PE | 23.3x |
Compared to peers like Shakti Pumps (26.6x) and Oswal Pumps (32.5x) based on FY25 P/E, GK Energy appears attractively valued. Looking at FY26E, the valuation becomes even more compelling. With a projected revenue of ₹2,700-₹2,800 Cr and a PAT of around ₹340 Cr, the forward P/E is estimated to be just ~9x. This suggests a potential upside of 55-60% based on a 15x FY26 multiple, making it a good medium to long-term play.
5. Key Risks to Consider
While the business has strong positives, it’s important to acknowledge the risks:
- High Geographical Concentration: Around 93% of the company’s revenue comes from Maharashtra, making it highly dependent on that single state.
- Policy Dependency: The business is heavily reliant on government schemes like PM-KUSUM. Any change in policy or discontinuation of the scheme could significantly impact revenue.
- High Working Capital & Receivables: The business is working-capital intensive, and trade receivables are high, which can affect cash flow. A large portion of the IPO's fresh issue is specifically for working capital requirements to address this.
6. Allotment Status & Key Dates
If you've applied, here are the key dates to keep in mind:
- Allotment Date: September 24, 2025
- Refund Date: September 25, 2025
- Demat Credit Date: September 25, 2025
- Listing Date: September 26, 2025
You can check your allotment status on the registrar's website, MUFG Intime India Private Limited, or on the BSE website. Just have your PAN number or application number handy.
7. Final View
I like this company. The scale and execution are good, and the promoters seem experienced and sorted. The backward integration plan adds a layer of long-term visibility and potential for margin improvement. The sector itself has strong tailwinds from government backing and the push for renewable energy. Despite the risks related to concentration and receivables, the attractive valuation makes it a compelling opportunity.
I am Applying for this IPO for reasonable to good listing gains and to hold for the medium to long term. 💪
Frequently Asked Questions (FAQs)
1. What is the business of GK Energy Limited?
GK Energy is a leading EPC (Engineering, Procurement, and Construction) service provider for solar-powered agricultural pump systems, with a significant presence under the PM-KUSUM Scheme.
2. What is the issue size and price band of the GK Energy IPO?
The IPO is for ₹464.26 crore, with a price band of ₹145 to ₹153 per share.
3. When will the shares be listed?
The shares are tentatively scheduled to be listed on BSE and NSE on September 26, 2025.
4. What are the key risks of investing in this IPO?
The main risks include a high dependence on government schemes, significant revenue concentration in Maharashtra, and a working-capital-intensive business model.
5. How can I check my allotment status?
You can check the allotment status on the official website of the registrar, MUFG Intime India Private Limited, or on the BSE website after the allotment date on September 24, 2025.
6. What is the purpose of the IPO proceeds?
The majority of the proceeds from the fresh issue (₹322.4 Cr) will be used to fund the company's long-term working capital requirements.
Disclaimer: These are my personal views and observations, and should not be considered as investment advice. Please conduct your own due diligence and consult with a financial advisor before making any investment decisions.