On Monday, October 28, Waaree Energies’ shares surged on the stock exchanges, closing at ₹2,500 on the NSE, 66.33% more than the issue price of ₹1,503. At a premium of 69.66 per cent, the stock debuted at ₹2,550 on the BSE.
Subscriptions for the ₹4,321.44 crore initial public offering (IPO) were accepted from October 21 to October 23. The price range for the public offering was between ₹1,427 and 1,503 per share.
Waaree Energies’ IPO closed with strong demand after three days of bidding, receiving 79.44 times bids. Out of the 2.02 crore shares available, bids for 160.91 crore shares were received during the IPO. While the non-institutional investor (NII) group witnessed a subscription of 65.25 times, the retail investor segment was booked 11.27 times. In the meantime, 215.03 times as many bids were placed on the qualified institutional buyers (QIB) quota.
IPO
A fresh issue of 2.4 crore shares, valued at ₹3,600 crore, and an offer to sell 0.48 crore shares, totalling ₹721.44 crore, were combined to form Waaree Energies’ initial public offering (IPO). On October 18, the company raised ₹1,276.93 crore from anchor investors. Retail investors had to invest a minimum of ₹13,527 and the minimum lot size for an application was nine shares.
Up to 20% of the offer was set aside for QIBs in the Waaree Energies IPO, 15% for NIIs, and 35% for retail investors. In the meantime, up to 30% of the offer was set aside for anchor investors, and 1.5% was set aside for staff.
A 6GW facility for the production of ingot wafers, solar cells, and solar PV modules is to be partially financed with the net proceeds from the new issue in Odisha, India. Furthermore, some of the money will go towards general business objectives.
While Link Intime India Private Ltd is the registrar for the Waaree Energies IPO, Axis Capital Limited, IIFL Securities Ltd, Jefferies India Private Limited, Nomura Financial Advisory And Securities (India) Pvt Ltd, SBI Capital Markets Limited, Intensive Fiscal Services Private Limited, and Iti Capital Ltd are the book-running lead managers.
Given that Waaree Energies’ IPO is reasonably priced at 26.9 times its Q1FY25 price-to-earnings ratio (diluted), Motilal Oswal has suggested a “subscribe” recommendation. The company emphasised Waaree’s dominance in the solar module market, as well as the substantial government support for renewable energy sources, the China Plus One policy, and the robust demand in the global solar market. They contend that these elements provide Waaree with a good growth prognosis, increasing the likelihood of substantial investor interest and listing returns.
The IPO’s remarkable financial trajectory, which included a revenue CAGR of 99.8% from FY22 to FY24 and a growth in profit after tax from ₹796.50 million in FY22 to ₹12,743.77 million in FY24, also led Sagar Shetty, Research Analyst at StoxBox, to rank it a “subscribe.” According to Shetty, the return on equity (RoE) increased dramatically from 17.69% to 30.26%, demonstrating robust operational efficiencies and international expansion initiatives. The company has an edge over competitors thanks to its competitive pricing, strong order book, and value at a PE ratio of 31.4 times the FY24 earnings. StoxBox recommended a “subscribe” rating for medium- to long-term investment because of its strong financial base and significant growth potential.
About the Company
Waaree Energies Limited is an Indian firm that was founded in December 1990 and specialises in producing solar PV modules with a 12 GW installed capacity. Its range of solar energy products includes both monocrystalline and multicrystalline photovoltaic modules. Waaree also provides building-integrated photovoltaic (BIPV) modules and TopCon modules, which include flexible bifacial modules (Mono PERC) in framed and unframed versions.
With a total installed capacity of 12 GW as of June 2024, Waaree Energies is the biggest producer of solar PV modules in India. Waaree is also establishing a 3 GW production facility in the US to expand its global reach and satisfy the growing demand for solar energy worldwide.
Out of all domestic solar PV module producers in India, the company claimed the second-best operational income for Fiscal 2024. Waaree reported revenue of ₹11,398 crore in FY24, up 69% year over year, while profit after tax more than doubled to ₹1,274 crore.
