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BW Businessworld

Startup: Power Of Sun Rays

Two young engineers bet on solar power as the energy source of the future and are today basking in the glory of the sun

Photo Credit : Ritesh Sharma

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Ketan Mehta and Pawan Sharma were final year B. Tech students at IIT Roorkee, when they read about this young entrepreneur who had set up India’s first solar park in Punjab. They were young, ambitious and hugely inspired. After extensive research on the market potentials of solar power, the two engineering students were convinced that it was the energy of the future.

Mehta, who is now director and co-founder, Rays Power Infra, says, “It’s all about being at the right place at the right time. Coming from Rajasthan, which was the hub of solar energy when the National Solar Mission was rolled out by the Central government, gave us an edge.”

Mehta and his partner, Pawan Sharma, incorporated Rays Power Infra in 2011 and in a span of five years, their company was rubbing shoulders with industry veterans like the Tata’s, the Reliance group and the Adani group. Mehta says, “Although we work like a startup, we’re not considered a startup in the solar power industry anymore. In a short span of five years, we are already rubbing shoulders with mammoths.”

Rays Power Infra is already India’s third largest solar turnkey solutions provider and IPP (Independent Power Producer). It has won big bids and completed work before deadlines. “We always knew we will have to compete with bigger firms, so inefficiency and delay were never options,” says Mehta.

The company sets up solar plants through the process of consulting engineering contracting commissioning. It also undertakes operation and maintenance services under two verticals — Advisory and Engineering, Procurement and Construction (EPC) for conglomerates at utility scale operations. It is a turnkey solution provider too. Rays Power Infra finances commoditised rooftop solutions for both home owners and institutional customers, like schools, hospitals and commercial entities.

“We have a project development track record of over 300MW in renewable energy — across four different proven technologies and eight Indian states. Soon we will start operations in Andhra Pradesh — it will be our ninth state,” says Mehta.

Rays Infra Power was voted India’s third largest solar EPC player in December by Bridge to India, a consulting and knowledge service provider in the Indian clean-technology market. World Consulting and Research Corporation awarded the firm a trophy for being the ‘most promising brand in power and energy’.

The firm has a strong financial book. It has a top line (gross revenue) of more than Rs 300 crore, with an EBITDA (earnings before income tax, depreciation and amortisation) of Rs 25 crore. By the end of the 2016-17 fiscal, Rays Infra Power hopes to clock a top line of Rs 800 crore, with a whopping EBITDA of Rs 75 crore. The company has experienced an exponential growth, leading to a current order book worth Rs 600 crore. In March Rays Power Infra partnered with Hilliard Energy to develop a 150 MW solar power project, entailing an investment of about Rs 870 crore.

“Having covered a portfolio of 300 MW-plus, we are poised to grow exponentially,” says Mehta. “For instance, we have already tied up with a big US private equity (PE) firm for a 150 MW project in the 2016-17 financial year. Similarly, we’ve bagged repeat orders from existing clients who are big ticket Indian conglomerates, to the tune of 200 MW. We are looking at a capacity addition of more than 600 MW this year,” he added.

The company has set itself tall targets for the years ahead. It plans to, for instance, create a pan-India ground mounted IPP portfolio of 2.0 GW by 2020. It plans to achieve a rooftop IPP portfolio of 1.5 GW by then. Sun Infra Power also aims to be the leading third party turnkey solar project solution provider in India and execute 2.5 GW of solar projects by 2018.

High hopes and projections of the industry, notwithstanding, the solar power sector in India has witnessed a few blips of late. Low bids for projects and the exit of a major player like SunEdison, has cast a cloud over the industry. Mehta remains optimistic, however, banking on his company’s “strong operational model”.

“If a firm wants to make losses, then no one can stop them,” Mehta says, referring to the persistent instances of companies making low bids for projects. He points out that it was not the most suitable time for startups to venture into the space. “Without a very strong financial backup, it is very difficult for startups to grow in the renewable space in current times,” says Mehta.

So long Rays Infra Power has been an internally funded company, but is now in talk with venture capitalists to raise funds to be able to keep its growth momentum on track. In the long run, the firm plans to go public. Expansion is the company’s prime focus now. “We plan to add a city a month under our name, especially in the rooftop portfolio,” boasts Mehta. For him, obviously, the sun is the limit.