Vineet Mittal’s Avaada Electro Ltd has scaled down its proposed initial public offering (IPO) to ₹7,600 crore from an earlier potential target of ₹10,000 crore, according to an updated draft red herring prospectus submitted to the Securities and Exchange Board of India (Sebi) on 24 August.
The adjustment comes after preliminary discussions with prospective investors regarding valuation and concentration risks, two people familiar with the matter told Mint. It also coincides with a broader moderation in appetite across India's primary market, as Mint reported on Wednesday morning.
"There is a lot of competition in the solar photovoltaic manufacturing space, from listed as well as unlisted players," one of these people said. “With the kind of dilution Avaada was seeking, a billion-dollar offer didn't end up materialising once potential investors were approached.”
Several listed companies already give investors exposure to the sector, including Waaree Energies Ltd, Vikram Solar Ltd, Premier Energies Ltd, Websol Energy Systems Ltd, and Emmvee Photovoltaic Power Ltd.
Though formal investor roadshows with company executives are still some time away, potential buyers cited Avaada Electro's heavy revenue dependence on its power-generation subsidiary Avaada Energy Pvt Ltd as a key factor in negotiating a lower valuation, said the second person cited above.
"The IPO-bound entity derives almost all its revenue from another group subsidiary, which also has a lot of competitors. The IPO ask had to be adjusted a bit to reflect that concentration risk," this person explained.
For context, Avaada Electro generated almost 90% of its FY26 revenue, totaling ₹4,733 crore, from Avaada Energy, the group's flagship independent power producer. In FY25, that reliance was even higher at 99.74%.
Avaada Energy lists Adani Green Energy Ltd, ReNew Energy Group PLC, Acme Solar Holdings Ltd, Tata Power Renewable Energy Ltd, NTPC Green Energy Ltd and Juniper Green Energy Ltd as its competitors.
Mint had reported on 18 October 2025 that Avaada was evaluating an issue size of up to ₹10,000 crore when it submitted initial documents via the confidential pre-filing route.
Queries emailed to a representative of Avaada Electro did not elicit an immediate response.
Revised IPO details
The listing comprises a fresh issue of shares worth up to ₹1,600 crore and an offer for sale of up to ₹6,000 crore by promoter entity Avaada Ventures Pvt. The company may also consider a pre-IPO placement of up to ₹320 crore, which would reduce the size of the fresh issue accordingly. Avaada Electro plans to use ₹1,200 crore of the IPO proceeds to repay debt, and the rest for general corporate purposes.
The company was originally said to have considered using the IPO proceeds to expand capacity in solar cell and module manufacturing. Avaada Electro currently operates 8.5 GW of module capacity and 3 GW of cell capacity. It aims to add another 5.1 GW and 9 GW, respectively, to these lines while establishing a new 3 GW capacity for ingots and wafers.
The firm's revenue from operations rose to ₹5,304 crore in FY26 from ₹912 crore the previous year. Ebitda increased to ₹1,259 crore from ₹242 crore, while profit after tax grew to ₹889 crore from ₹173 crore.
The Avaada group, backed by Brookfield Renewable Partners and Thailand's Global Power Synergy Public Co, which is part of the country's state utility PTT, raised more than $1.3 billion in 2023 to fund expansion across its solar, hydrogen, battery storage, and green ammonia verticals.
ICICI Securities Ltd, Axis Capital Ltd, BofA Securities India Ltd, HSBC Securities and Capital Markets (India) Pvt Ltd, SBI Capital Markets Ltd, and IIFL Capital Services Ltd are managing the sale.
Cooling primary-market sentiment
Avaada Electro’s decision to downsize its offer coincides with a broader moderation in India's primary market. Data from the National Stock Exchange (NSE) reveals a clear shift in individual investor behaviour during FY27, with retail capital rotating away from initial public offerings back toward secondary-market equities, Mint reported.
In FY27 so far, retail buyers deployed a net ₹39,053 crore into secondary-market shares, a sharp reversal from the ₹5,803 crore net outflow seen in FY26. Conversely, primary-market deployment by retail investors dropped to ₹7,134 crore, down significantly from ₹42,608 crore in the preceding financial year. Mainboard IPO collections overall stood at ₹32,442.57 crore in FY27 so far, representing just 18% of the ₹1.79 trillion raised in FY26.
Market experts attribute this trend to a combination of attractive secondary-market valuations following earlier corrections, and a scarcity of high-quality, competitively priced primary issues.
Gurpreet Sidana, chief executive of InCred Markets, said, “The current shift should not be seen simply as investors moving away from IPOs. It reflects limited compelling IPO opportunities and better risk-reward in selected listed companies, particularly in the mid- and small-cap segments,” he added. “In short, retail investors are not moving away from equities; they are becoming more selective about where they deploy their capital.”