Oriana Power specialises in providing solar energy solutions to industrial and commercial clients. They install on-site solar equipment such as rooftop and ground-mounted systems, as well as off-site solar farms. Their business operations are primarily divided into two segments - Capital Expenditure (CAPEX) and Renewable Energy Service Company (RESCO).
Under the CAPEX model, the client invests in the capital expenditure and Oriana does engineering, procurement, construction, and operation on behalf of the client. Under the RESCO model, operated through its 18 subsidiaries, the investment, commissioning and maintenance are done by Oriana Power. The company then sells power to the end consumer through a Power Purchase agreement generally agreed for 25 years. This gives them annuity income once the initial investment is recovered. So far, the capacity built via CAPEX model is nearly thrice that of the RESCO model.
The global solar energy market was valued at $52.5 billion in 2018 and is projected to reach $223.3 billion by 2026, showing a CAGR of 20.5% from 2019 to 2026. In India, the total generation of electricity grew by 7.96% and 8.87% in 2021-22 and 2022-23 respectively.
Oriana Power Ltd IPO Details
Oriana Power IPO is a 100% fresh issue IPO comprising 5,055,600 shares. It is a book-building issue with a price range of ₹115 to ₹118 per share. Retail investors can bid for the Oriana Power IPO that will open on August 1st, 2023. The IPO will list on the NSE SME exchange on August 11th, 2023.
Oriana Power Ltd IPO Objectives
The objectives of Oriana Power Ltd IPO are listed below:
- Working capital requirement i.e. salaries, rent, utilities, and inventory.
- Investment in subsidiary companies.
- Capital expenditure i.e. investments in technology, equipment and infrastructure to support the growth and expansion of the business.
Peer Details
The following are some of the major players in this market, in India and abroad:
- Tata Power Solar Systems Ltd
- Abengoa SE, Acciona S.A.
- Canadian Solar Inc.
- Esolar Inc.
- United Renewable Energy Co. Ltd.
- Sunpower Corporation
- Kaneka Corporation
- Wuxi Suntech Power Co. Ltd.
- Brightcource Energy Inc.
Highlights of Oriana Power Ltd
- The company generated net positive cash flow of ₹3.12 lakhs in 2022-23, unlike a net negative cash flow of ₹1.76 and ₹42.95 lakhs in 2021-22 and 2020-21 respectively.
- While operating and financing activities have given consistent positive cash flows in the last 3 years, investing activities have caused consistent cash outflows in the same period.
- The company has given corporate guarantees of ₹7,437 lakhs with respect to the loan taken by its subsidiaries and associate companies.
- They have never made any dividend payments in the past.
Oriana Power Ltd Company Financials
| Particulars | Period Ending on 31st Mar’23 | Year ending on 31st Mar’22 |
|---|---|---|
| Total Income | 13,395.37 | 10,146.86 |
| Profit for the period | 1,268.52 | 695.53 |
| Current Ratio | 1.22 | 1.20 |
| Debt-Equity Ratio | 0.41 | 0.43 |
| Return on Capital Employed | 0.46 | 0.49 |
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Strengths
3The government of India currently provides a lot of support to renewable energy projects.
They have a large range of subsidiary companies and products that serve different types of clients as well as operate in different regions of India, as well as abroad e.g. in Africa.
In the last 3 years, the company has massively improved its revenue, profitability as well as current ratio.
Risks
3Several of their key raw materials and components are sourced from a limited group of global, third-party suppliers, which creates supplier concentration risks.
Their top 10 customers take up a sizeable part of their revenue, which creates the risk of demand concentration. In 2021-22, 42.64% of the revenue came from a single client.
The get their business usually via a bidding process. This creates a degree of uncertainty in revenue obtained per period.
