GK Energy IPO: Can the Solar Pump Leader Power Up Your Portfolio?

GK Energy Limited, a solar energy EPC company, is coming to Dalal Street with its ₹464.26 crore IPO, open from September 19 to 23, 2025. The price band is fixed at ₹145–153 per share, while the lot size is 98 shares. At the upper band, the IPO values the company at around ₹3,103 crore market cap.

The GMP stands at ₹36 per share, which indicates a 23.5% upside over the issue price. This shows healthy investor interest, but GMP is often volatile and should only be seen as a rough indicator of market sentiment.

In this blog, we break down the company’s business model, IPO objectives, strengths and risks, peer comparison, valuation metrics, leadership, and industry outlook - so you know exactly what you’re looking at before making any decision.

IPO Overview

• IPO Date: September 19 to September 23, 2025
• Total Issue Size: ₹464.26 crore
• Price Band: ₹145 to ₹153 per share
• Lot Size: 98 Shares
• Tentative Allotment Date: September 24, 2025
• Listing Date: September 26, 2025 (Tentative)
• GMP: The GMP for GK Energy IPO is ₹36, reflecting a 23.53% gain over the issue price, according to Chittorgarh.com (as of September 19).
  Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

Business Model: How GK Energy Makes Money

GK Energy is mainly into Engineering, Procurement, and Commissioning (EPC) of solar-powered agricultural water pumps. Simply put, they install solar systems that help farmers run water pumps on free solar energy instead of costly diesel or electricity.

Most of their business comes under government schemes like PM-KUSUM, where farmers get subsidised pumps. The company also sets up water storage facilities, rooftop solar projects, solar street lights, and home lights. To ensure a steady supply, they also trade in solar panels, modules, and related items made by other manufacturers.

Think of it this way: farmers need pumps, the government provides subsidies, and GK Energy acts as the middle player who designs, installs, and maintains these systems. That’s their bread and butter - making up 99.3% of revenue in FY25.

Objectives of the IPO

The company is raising ₹464.26 crore, of which ₹400 crore is a fresh issue and ₹64.26 crore is an offer for sale.

Here’s where the fresh money will go:

• ₹322.46 crore for working capital needs - this is important because the company is running on a negative working capital of ₹50 crore.
• Remaining funds for general corporate purposes, reducing reliance on external borrowings, and supporting growth in the solar pump and rooftop solar business.

Strengths:

• Revenue jumped from ₹285 crore in FY23 to ₹1,095 crore in FY25 - a 96% CAGR. Profit shot up from ₹10 crore to ₹133 crore in the same time.
• EBITDA margin rose from 6% in FY23 to 18.2% in FY25. PAT margin is now at 12.1%.
• Market leader in Maharashtra, it holds 15% market share in solar pump systems under PM-KUSUM.
• Large order book of ₹1,008.9 crore pipeline, which gives revenue visibility.
• ROE of 63.7% in FY25 - meaning it created ₹63.7 profit for every ₹100 shareholder equity.
• Receivable Days down to 120 in FY25 from 144 in FY23, showing improved liquidity cycle.

Risks:

• Heavy reliance on one scheme, as 84% of FY25 revenue comes from PM-KUSUM, which ends on March 31, 2026. If not renewed or replaced, revenue could collapse.
• 93% of FY25 revenue came from Maharashtra. Any slowdown or policy change in this state can hit business hard.
• Operating in negative working capital, with borrowings at ₹489 crore.
• Largest client contributed 15% of revenue. Losing this client would be a big blow.
• Its EBITDA Margin is lower than Shakti Pumps (24%) and Oswal Pumps (29.4%).

For detailed information, visit GK Energy’s IPO page.

Peer Comparison

The company’s listed peers are Shakti Pumps and Oswal Pumps.

Source: RHP

GK Energy is smaller in scale compared to peers, but offers higher efficiency than Shakti Pumps and a near-competitive valuation.

IPO Valuation

• At the upper price band of ₹153, GK Energy is valued at 23.3x P/E, compared to 24.1x for Shakti Pumps and 29x for Oswal Pumps. This makes GK Energy slightly cheaper than its peers.
• EV/EBITDA post-IPO at 16.3x also looks competitive.
• The pre-IPO placement and promoter stake sales both happened at ₹153, validating the IPO pricing as fair.

In simple terms, the IPO is not “cheap” but not over-expensive either — it seems aligned with sector valuations.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

The People Behind GK Energy

The company’s backbone is Gopal Rajaram Kabra, founder, CMD and CEO. With over 18 years in the solar energy space, he has steered GK from a niche EPC player to one of India’s largest solar pump installers. He even receives a small royalty of 0.1% of sales for using company trademarks, reflecting his strong personal stake in the business.

Mehul Ajit Shah, the Whole-time Director and COO, brings 14 years of experience and focuses on execution and project delivery. Together, Kabra and Shah hold a massive 93.3% pre-IPO stake, which ensures skin in the game.

The team also includes Sunil Malu as CFO, bringing financial discipline, and a mix of professionals and independent directors like Chandra Iyengar (ex-IAS officer and ex-Maharashtra Chief Secretary) and Pooja Chandak (Chartered Accountant with 17 years in finance), strengthening governance.

Industry Outlook

India’s agriculture sector runs on almost 30 million pumps, with 8 million still diesel-based and 22 million grid-electricity-based. The solar pump market is expected to grow to ₹30,000-32,000 crore by FY29, a 52% CAGR.

Government subsidies, coupled with farmers’ need to cut costs and ensure reliable irrigation, make this a high-growth space. On top of that, solar rooftops are picking up fast - GK already has orders worth ₹23.3 crore for 5.3 MW capacity.

The real tailwind is clear: India wants cleaner energy, and farmers want cheaper pumping solutions. GK Energy sits at that cross-section.

Who’s Making Money via the IPO OFS: Selling Shareholders

In the ₹64.26 crore offer for sale portion of the GK Energy IPO, both promoters are partially cashing out a very small fraction of their holdings. Chairman and CEO Gopal Rajaram Kabra is selling 40 lakh shares worth ₹61.2 crore. Having been with the company since its inception in 2008, this stake dilution is more a case of small value unlocking rather than an exit, as he continues to remain the primary promoter with a controlling majority post-issue. Whole-time Director Mehul Ajit Shah is offloading 2 lakh shares worth ₹3.1 crore, again a minor stake sale compared to his overall holding.

For long-standing promoters like Kabra and Shah, who entered at a very low cost years ago, the notional returns look extraordinary - Kabra’s sale reflects a 5100x multiple on his historic holding cost, while Shah records around 1020x returns. However, in promoter-led OFS transactions, these headline multiples simply reflect the journey from near-zero acquisition price to today’s IPO valuation and are best read as token cash-outs rather than disinvestment. Both founders continue to retain very high personal stakes and remain deeply committed to the company’s future growth.

Analyst View

GK Energy combines explosive growth, strong profitability, and leadership in a niche (solar pumps) with a massive market ahead. The IPO is priced reasonably, with a valuation in line with peers, making it neither a steal nor too stretched.

But investors must note the dependency on government schemes. If PM-KUSUM doesn’t extend beyond 2026, GK’s revenue base could shrink sharply. Also, geographical reliance on Maharashtra adds concentration risk.

Overall, for investors who believe in the long-term solar adoption story and the government’s renewable energy push, GK Energy IPO looks promising. But this is not a “set and forget” stock - it will need close tracking of policy changes and diversification efforts beyond PM-KUSUM.

How to Apply for an IPO on INDmoney?

1. Download the INDmoney app and complete your KYC.
2. Go to INDstocks → IPO, or just search “IPO”.
3. Tap on an IPO from the list of live IPOs.
4. View key details like price band, lot size, and dates.
5. Tap Apply Now and choose the number of lots.
6. Use INDpay UPI for instant mandate tracking.
7. Your funds will be blocked until the share allotment is finalized.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: GK Energy's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.