Any idea how much of fund raising is planned?
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yeah, your absolutely right with previous QIP and its under utilized.
previous QIP was for doubling the capacity of solar pumps, still now there’s no news/info regarding it!
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Let’s see wat they are raising QIP for and who’s participating ?
If no solid reason, then its RED flag!
Disclosure; Biased
2300 cr ttm revenue max capacity is at 2500 cr above 90 percent capacity utilization is there and they are also getting orders 700 cr recently added to 1800 crores adds up to 2500 crores which is max capacity the march qip was for 3000-3500 crores capacity which the order book does not add upto but further orders are to be keep an eye on currently I think they are at ath order book and capacity utilization but this current qip idk (? ev/kusum-c) management needs to do a concall regarding the same.
disclosure: biased
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Management had been claiming that they have a Pump capacity of 5,00,000 units Per Annum. What is the present capacity utilisation, how much they have installed during last last FY 2022,2023,2024 and during current FY. In my opinion current valaution is sustainable only and only if they are doing something big in EV or any thing else which is not known to retailers. KUSUM business is not sufficient to sustain such kind of valuation.
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What if they are doing backward integration and maybe put solar cell line ? This way margins can sustain and then they can take DCR advantage as well. Since govt has made mandatory to purchase 45% solar content domestically and by doing backward integration they can sell in the market as well as use internally also. Doing backward integration makes sense according to me since the PM kusum scheme is very big and going forward there will be something for replacement pumps as well. There are currently 4.5 cr off grid diesel pumps which will definitely be replaced in future seeing the advantage of the solar pumps
Trying to put forward some thesis for fund raising. Lets see on Jan 7th
Disclaimer - Invested from lower levels
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In my opinion that will be not be an efficient capital allocation.
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Doing backward integration would be very highly capital intensive, technological transfer, opex and OPPURTUNITY COST, blunder according to me !
If i am not wrong, major Solar PV modules are acquired from premier solar!
some things have to be outsourced !
Does servotech manufacture pumps as well?
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The company has now over 1000cr in accounts receivable on a TTM revenue of 2300 cr , There are high chances that the fund raising might be due to stretched working capital
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I have written to the CFO, will update as and when I get a response.
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As per my understanding from the concall & whatever i have gathered from other sources.
Kusum C scheme will not prove to be beneficial for discoms if the pumps are not replaced.
As their will be no savings in the electricity consumption and all the energy produced by the Solar project will get consumed by the pump itself.
Moreover there will not be any incremental revenue generation for the farmers (i.e no export of energy to the grid)
Also as explained in the concall this will elongate the recovery time for the investments done by the discoms.
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Servotech manufactures solar panel module only which is part of component C of KUSUM
Hi Aditya,
Can you help out in understanding more if possible as to how does the pump replacement helps? Is it because the older pumps are inefficient or some other reason?
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Replacement of existing diesel pump will be with routine and normal agriculture pump. There are 100s of such pump manufacturers. What moat Shakti Pump has in for normal agriculture pump.
I am unable to understand how Shakti Pump will have a moat under KUSUM Scheme C.
Disclosure: Exited & Tracking for knowledge purpose only.
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"And while saving water, the remaining electricity will be supplied to the grid at the same time.
Means in one time we will be able to do two things. One is that we will be able to run the
pump and at the same time if pump use say 10kW, we will be giving 5 kW of remaining
electricity to the grid and the benefit of this will also be given to the farmer. And for this we
have a patent. So this is the technology of Shakti Pumps which is a patented technology which
in the coming time the way it the market moves towards grid connecting, Shakti Pumps will
benefit from it." quoted from concall moat
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My short understanding of Comp C.
As far as I understand, Component C has 2 schemes - FLS (Feeder Level solarisation) and IPS (Individual Pump solarisation). Right now only FLS tenders and orders are being rolled out under Kusum Comp C which are being won by several EPC players such as HG Infra.
Shakti management has said that they believe in the medium to long run, the IPS scheme will gain more traction compared to FLS as IPS gives an extra earning stream to farmers which FLS does not. They have said that they are doing a trial order at Ajmer. As far as I remember they have said that its taking time because the infrastructure required to feed back electricity generated from the pumps to the grid is not yet available and is in the process of getting built. If the Ajmer trial proves to be successful then Comp C - IPS can take off.
Whether this will actually happen or not remains to be seen. If it does happen, that opens up another source of orders for the company.
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Shakti Pumps Expands Manufacturing Footprint with Major Investment! | MCap 12,547.58 Cr | PE 42.33
Exciting news from Shakti Pumps! They’ve committed ₹3.80 Crores to boost solar manufacturing capabilities with Shakti Energy Solutions. 
Key Highlights:
- Shakti Pumps (India) Limited has invested ₹3.80 Crores in its wholly-owned subsidiary, Shakti Energy Solutions Private Limited.
- The investment includes subscribing to 3,80,00,000 equity shares at a face value of ₹1 each.
- Shakti Energy Solutions achieved a turnover of ₹139.59 Crores for FY24.
- The subsidiary specializes in manufacturing solar structures and related products.
- No governmental or regulatory approvals are required for this investment.
- The transaction will be finalized on the same day it was announced.
- This acquisition is not classified as a related party transaction as it pertains to a wholly-owned subsidiary.
Shakti energies has been alloted land for pv modules manufacturing in madhya pradesh.
Shakti pumps announced investment in shakti energies recently.
Rising module prices may be countered by this to protect the margins.
- forwarding from WhatsApp
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https://search.app/AT7mCtPTR2ivbbVy7
Fund raise of 400 crores is approved. However, the reason for fundraise is not mentioned. It might be there for the stretched working capital requirements but the management has denied the need of access funds for working capital in the last Q2 FY 25 earning call.
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