Sugs Lloyd

• Sugs Lloyd is coming out with an initial public offering (IPO) of 69,64,000 equity shares in a price band of Rs 117-123 per equity share.
• The issue will open on August 29, 2025 and will close on September 02, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 11.70 times of its face value on the lower side and 12.30 times on the higher side.
• Book running lead manager to the issue is 3Dimension Capital Services.
• Compliance Officer for the issue is Nimmy Singh Chauhan.

Profile of the company

Sugs Lloyd operates in the renewable energy sector, with a primary focus on solar energy, electrical transmission and distribution, and civil EPC (Engineering, Procurement, and Construction) projects. It provides a wide range of services, including the development of power transmission and distribution infrastructure, construction of power substations, and the renovation, upgrading, and modification of existing power systems. Additionally, it also engages in providing solutions for Outage Management Solutions (OMS) using fault passage indicators, auto reclosers, and Sectionalizer to various electricity DISCOM (Distribution Companies). In the civil construction domain, it offers turnkey solutions for civil building construction and electrical substation work, particularly for government clients, with a strong emphasis on serving power DISCOMs (Distribution Companies).

The company also provides skilled manpower and staffing services to government organizations, specifically power DISCOMs, ensuring the efficient operation and maintenance of energy infrastructure. The company deals with state government power utilities, private power entities and Renewable energy developers. Preferentially, company opts for Renewable Energy and EPC projects. The company bags project work from government utilities through open bidding process and from private power entities and renewable energy developers by way of open bidding or preferential basis in accordance with company’s merit and performance.

The company has set business module to suit operational needs. Business operations mainly comprises of two main tasks: Supply and service. For performing these tasks, various sequential activities are performed. It has to deploy quality manpower and developed resources. The company owns adequate machineries but for specific requirements of machineries, it has to avail services on hire basis. At site, company sets up office and store facilities as per project requirement and deploy project team and hire labours on daily basis as per the site requirement.

Proceed is being used for:

• Meeting working capital requirements of the company
• General corporate purposes

Industry Overview

India's energy demand is expected to increase more than that of any other country in the coming decades due to its sheer size and enormous potential for growth and development. Therefore, most of this new energy demand must be met by low-carbon, renewable sources. India's announcement India that it intends to achieve net zero carbon emissions by 2070 and to meet 50% of its electricity needs from renewable sources by 2030 marks a historic point in the global effort to combat climate change. India was ranked fourth in wind power capacity and solar power capacity, and fourth in renewable energy installed capacity, as of 2021. Installed renewable power generation capacity has increased at a fast pace over the past few years, posting a CAGR of 15.4% between FY16 and FY23. India has 125.15 GW of renewable energy capacity in FY23. India is the market with the fastest growth in renewable electricity, and by 2026, new capacity additions are expected to double.

As of July 2024, Renewable energy sources, including biomass, waste to power and waste to energy, have a combined installed capacity of 150.27 GW. As of October 2024, 44.72% of the total power installed capacity is from non-fossil-based sources. India's installed renewable energy capacity is expected to increase to about 170 GW by March 2025 from the level of 135 GW as of December 2023. The country is targeting about 450 Gigawatt (GW) of installed renewable energy capacity by 2030 - about 280 GW (over 60%) is expected from solar. India's renewable energy capacity is set to reach 250 GW by 2026, driven by a strong project pipeline. Power generation from renewable energy sources (excluding hydro) stood at 19.77 billion units (BU) in December 2024, up from 16.76 BU in December 2023. Power generation from renewable energy sources stood at 189.48 billion units (BU) between April-December 2024, up from 172.48 BU in the same period in the previous year.

India has set a target to reduce the carbon intensity of the nation’s economy by less than 45% by the end of the decade, achieve 50% cumulative electric power installed by 2030 from renewables, and achieve net-zero carbon emissions by 2070. Low-carbon technologies could create a market worth up to $80 billion in India by 2030. India’s target is to produce five million tonnes of green hydrogen by 2030. The Green Hydrogen target is set at India’s electrolyser manufacturing capacity is projected to reach 8 GW per year by 2025. The cumulative value of the green hydrogen market in India could reach $8 billion by 2030 and India will require at least 50 gigawatts (GW) of electrolysers or more to ramp up hydrogen production. It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. The use of renewables in place of coal will save India Rs 54,000 crore ($8.43 billion) annually. Around 15,000 MW of wind-solar hybrid capacity is expected to be added between 2020-25.

Pros and strengths

Quality assurance and standards: The company provides its customers quality services and the company is ISO certified. Quality standards followed right from the beginning are very stringent, and adhere during the services and assembling process. It is very particular from usage of right person at right place to render specialized services to its clients. Its dedicated efforts towards the quality of services, processes and inputs have helped it to gain a competitive advantage over others. Its quality services have earned it a goodwill from its customers, which has resulted in repeat services orders from many of them.

Existing client relationship: The company has earned reputation based upon which it has been successful in retaining clients. Its existing customer relationship helps it to get repeat business from its customers. This has helped it maintain a long-term working relationship with its customers and improve its customer retention strategy. The company’s relationship with the existing customers represents a competitive advantage in gaining new customers and increasing its business.

Scalable business model: The company’s business model comprises of optimum utilization of its existing resources, developing linkages with expertise of its development team and achieving consequent client’s satisfaction. This business model has proved successful and scalable for it in the last financial years. It can scale by venturing into different sectors where technologically advanced management is required and also by providing better services in the renewable energy sectors that it already has presence in. The business scale generation is basically due to the development of new markets by maintaining the consistent quality of the services.

Risks and concerns

Maximum revenue comes from limited customers: Maximum revenue of the company comes from few customers. The company has garnered 87.93%, 93.44% and 96.78% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. Larger contracts from few customers may represent a larger part of its portfolio, increasing the potential volatility of its results and exposure to individual contract risks. Such concentration of its business on a few projects or clients may have an adverse effect on its results of operations and result in a significant reduction in the award of contracts which could also adversely affect its business if it does not achieve its expected margins or suffer losses on one or more of Projects from such clients.

Dependent on few suppliers for purchase of product: The company relies on a limited number of suppliers for the purchase of Material, its dependence on few suppliers is significant. The company bought 55.84%, 51.98% and 80.97% of its total products from top 10 suppliers in FY25, FY24 and FY23 respectively. The company cannot assure that it will be able to get the same quantum and quality of supplies, or any supplies at all, and the loss of supplies from one or more of them may adversely affect its purchases of stock and ultimately its revenue and results of operations.

Substantial portion of revenue comes from government entities: The company derives a substantial portion of its revenue from sales to government entities, which accounted for 93.44% of its total revenue for the year ended March 31, 2025, 69% and 45% for the year ended 2024 and 2023 respectively. Any adverse changes in government policies, regulations, or procurement procedures, or a significant reduction in government spending, could materially and adversely affect its business, financial condition, and results of operations.

Outlook

SUGS Lloyd is a technology-driven engineering and construction company specializing in renewable energy, particularly solar energy, as well as electrical transmission, distribution, and civil EPC projects. The company has quality assurance and standards and has scalable business model. On the concern side, the company’s business is dependent on a few customers and the loss of, or a significant reduction in award of contracts by such customers could adversely affect its business. Moreover, too much concentration of its business is from sale to government which may impact its business.

The company is coming out with a maiden IPO of 69,64,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 117-123 per equity share. The aggregate size of the offer is around Rs 81.48 crore to Rs 85.66 crore based on lower and upper price band respectively. On performance front, revenue from operations for the FY 2024-25 stood at Rs 17619.86 lakh whereas in FY 2023-24 the same stood at Rs 6512.57 lakh representing an increase of 170.55%. Moreover, the company reported Restated Profit after tax for the financial year 2024-25 at Rs 1677.76 lakh in comparison to Rs 1048.43 lakh in the financial year 2023-24, representing an increase of 60.03%.

The company constantly endeavours to improve its service process to optimize the utilization of resources. It has invested significant resources, and intend to further invest in its activities to develop customized systems and processes to ensure effective management control. It regularly analyses its existing policies to be carried out for operations of the company which enable it to identify the areas of bottlenecks and correct the same. This helps it in improving efficiency and putting resources to optimal use. Going forward, the company aims to continue to improve ongoing operational effectiveness and efficiencies to achieve cost reductions including overheads. This can be done through continuous business process review and timely corrective measures in case of diversion and technology up gradation with proper analytics base. As a result of these measures, the company will be able to increase its market share and profitability.