GK Energy's costs surge sharply ahead of IPO, shows DRHP
New Delhi: GK Energy Limited, which specialises in solar-powered agricultural water pump systems, is prepared to launch its initial public offering (IPO) after receiving final approval from the Securities and Exchange Board of India (SEBI) last month.
The company had filed its draft red herring prospectus (DRHP) with SEBI on December 17, 2024. However, it submitted an addendum to the DRHP on May 5.
According to the addendum, GK Energy's financials indicated that while its revenues had grown significantly in recent years, its expenses had also risen sharply.
Total expenses (consolidated) in FY25 amounted to Rs 918.91 crore. In the prior years, expenses had gone up 33.84 per cent from Rs 271.98 crore in FY23 to Rs 364.04 crore (standalone) in FY24.
The cost of goods sold in FY25 stood at Rs 702.69 crore. It had earlier risen over 23 per cent to Rs 297.81 crore in FY24 from Rs 241.65 crore in FY23.
Employee benefit expenses in FY25 reached Rs 18 crore. In the previous years, it had increased 940.2 per cent to Rs 8.01 crore in FY24 from Rs 0.77 crore in FY23.
Finance costs were Rs 22.35 crore in FY25. Earlier, they had gone up over 67 per cent from Rs 3.65 crore in FY23 to Rs 6.10 crore in FY24.
Depreciation and amortisation stood at Rs 1.42 crore in FY25. Before that, it had risen from Rs 0.48 crore in FY23 to Rs 0.67 crore in FY24.
Other expenses in FY25 were Rs 173.74 crore. They had earlier increased 220.1 per cent from Rs 11.93 crore in FY23 to Rs 38.19 crore in FY24.
Despite the rising costs, the company's revenue from operations in FY25 stood at Rs 1,094.83 crore. However, it had jumped over 44 per cent from Rs 285.03 crore in FY23 to Rs 411.09 crore in FY24.
Total income in FY25 was Rs 1,099.18 crore. In comparison, it had risen 44.4 per cent from Rs 285.45 crore in FY23 to Rs 412.31 crore in FY24.
The company had posted a net profit of Rs 133.21 crore in FY25. Earlier, it had increased 258 per cent from Rs 10.08 crore in FY23 to Rs 36.09 crore in FY24.
The IPO included a fresh issue of shares worth Rs 500 crore and an offer for sale (OFS) of 84 lakh equity shares by promoters Gopal Rajaram Kabra and Mehul Ajit Shah.
Of the Rs 500 crore raised through the fresh issue, Rs 422.45 crore was to be used to meet long-term working capital requirements, while the remainder was to go toward general corporate purposes.
The company had also planned to reserve a portion of the IPO for eligible employees.
The IPO was managed by IIFL Capital Services Limited and HDFC Bank Limited, with Link Intime India Private Limited acting as the registrar.
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