The initial public offering (IPO) of Brookfield-backed Clean Max Enviro Energy Solutions is scheduled for Monday, February 23 and will close on Wednesday, February 25. The price band for the issue has been fixed in the range of ₹1,000 to ₹1,053.
The ₹₹3,100 crore IPO consists of a fresh issue of equity shares aggregating ₹1,200 crore, along with an offer-for-sale (OFS) worth ₹1,900 crores. The overall issue size has been scaled down from the earlier proposed ₹5,200 crore, as outlined in the preliminary documents filed in August last year.
The OFS will see stake sales by promoters Kuldeep Jain, Brookfield’s BGTF One Holdings (DIFC) and KEMPINC, along with existing investors Augment India I Holdings and DSDG Holding APS.
The lot size for the IPO has been fixed at 14 equity shares. Based on the upper end of the price band, retail investors will need to make a minimum investment of ₹14,742 to apply for one lot of 14 shares.
The anchor investor allocation for the Clean Max Enviro Energy Solutions IPO is scheduled for Friday, February 20. The basis of allotment is expected to be finalized on Thursday, February 26, following which the company will initiate refunds on the same day. Shares will be credited to the demat accounts of successful applicants on Friday, February 27. The company’s shares are likely to list on the BSE and NSE on Monday, March 2.
According to a CRISIL report, Clean Max Enviro is the largest provider of renewable energy solutions for commercial and industrial consumers in India as of March 31, 2025. As of July 31, 2025, the company operated, owned and managed 2.54 GW of renewable energy capacity, while an additional 2.53 GW was under contract and under development.
As per the red herring prospectus (RHP), the company’s listed peers include ACME Solar Holdings Ltd, which trades at a price-to-earnings (P/E) ratio of 49.46, NTPC Green Energy Ltd with a P/E of 132.94, Adani Green Energy Limited with a P/E of 119.14, and ReNew Energy Global PLC, which has a P/E of 44.84.
While the IPO offers exposure to a fast-growing renewable energy platform, the Draft Red Herring Prospectus states certain risks, that investors must know before subscribing to the issue.
Let’s take a look at the key risks
1. High Revenue Concentration Risk
The company derives a significant portion of its revenue from a limited number of customers. As per the DRHP, the top 10 customers accounted for 36.16% in FY25, 45.39% in FY24 and 44.32% in FY23. Any loss of key customers, reduction in contracted capacity, payment delays or adverse renegotiation of terms could materially impact revenue visibility, cash flows and overall financial stability. The business may also face pricing pressure due to customer concentration, limiting its bargaining power and affecting long-term profitability.
2. Heavy Dependence on Long-Term Contracts
The company’s revenue model is heavily dependent on long-term power purchase agreements (PPAs) and energy access agreements (EAPAs). These contracts provide visibility but also expose the business to counterparty and contract-renewal risks. If any major agreement is terminated early, not renewed, or renegotiated on unfavorable terms, the company may struggle to replace revenues at similar margins. Delays in securing replacement contracts could adversely affect capacity utilization and long-term growth prospects.
3. Risk of Delayed or Defaulted Payments
The company faces counterparty credit risk arising from delayed payments or defaults by customers under PPAs and EAPAs. Any prolonged delay in receivables collection could strain working capital, increase borrowing requirements and impact liquidity. As highlighted in the DRHP, inability to recover dues on time may adversely affect cash flows and financial condition, particularly given the capital-intensive nature of renewable energy projects.
4. Project Execution and Cost Overrun Risk
Timely execution of projects depends on factors such as equipment availability, contractor performance, land acquisition and regulatory approvals. Any delay in commissioning or escalation in costs could reduce project returns and impact profitability. Supply-chain disruptions, inflationary pressures or logistical challenges may further aggravate execution risks. The DRHP notes that failure to complete projects within scheduled timelines could lead to penalties, loss of incentives and reduced internal rates of return.
5. First-Time Exposure to CTU and ISTS Projects
The company is undertaking Central Transmission Utility (CTU) and Inter-State Transmission System (ISTS) projects for the first time. Since it lacks prior commissioning experience in this segment, execution risks remain elevated. Any technical, regulatory or coordination challenges could delay grid connectivity and commercial operations. The DRHP highlights that failure to successfully implement these projects could adversely impact expansion plans and financial performance.
6. Land Ownership and Title Risks
Renewable energy projects require large parcels of land, often involving complex ownership structures. The company faces risks related to land title defects, lease disputes, local opposition and regulatory challenges. Any adverse claims or litigation related to land could delay projects, increase costs or lead to loss of operational assets. The DRHP cautions that land-related issues may result in prolonged legal proceedings and operational disruptions.
7. High Debt and Covenant Compliance
The company and its subsidiaries have significant outstanding borrowings to fund capital-intensive projects. These loans are subject to various financial and operational covenants. Any breach could trigger penalties, higher interest costs or acceleration of repayment obligations. As stated in the DRHP, inability to service debt or comply with covenants could materially impact cash flows, credit profile and overall financial stability.
8. Ongoing Legal and Regulatory Proceedings
There are pending litigations involving the company, its subsidiaries, promoters, directors and key managerial personnel. Any adverse rulings could result in financial liabilities, reputational damage or operational restrictions. The DRHP notes that such proceedings, even if resolved favourably, may require significant management time and legal expenses, potentially affecting business focus and performance.
9. Exposure to Policy and Regulatory Changes
The renewable energy sector is highly regulated and dependent on government policies, incentives and grid regulations. Changes in tariff structures, transmission norms, renewable purchase obligations or subsidy frameworks could impact project economics. The DRHP warns that adverse policy changes may affect returns, viability of existing projects and future growth opportunities.
10. No Prior Public Market and Valuation Risk
This is the company’s first public issue, and there is no prior trading history for its equity shares. Investors may face volatility post-listing, and there is no assurance that the issue price will be sustained. The DRHP clearly states, “If any of these risks actually occur, our business, financial condition and results of operations could suffer and the trading price of the Equity Shares could decline, resulting in loss of investment.”
