Waaree Energies has launched its initial public offering (IPO) on Monday, October 21. The solar power player is offering its shares in the range of Rs 1,427-1,503 apiece, for which investors can apply for a minimum of 9 equity shares and its multiples thereafter. The issue will close for bidding on Wednesday, October 23.
Waaree Energies, incorporated in December 1990, is an Indian manufacturer of solar PV modules with an aggregate installed capacity of 12 GW. The product portfolio of solar energy products consists of the PV modules such as multicrystalline modules; monocrystalline modules; and TopCon modules include flexible bifacial modules, both framed and unframed.
The Rs 4,321.344 crore IPO of Waaree Energies includes a fresh share sale of Rs 3,600 crore and an offer-for-sale (OFS) of up to 48,00,000 equity shares amounting to Rs 721.44 crore by its promoter Waaree Sustainable Finance and investor Chandurkar Investments.
Waaree Energies raised Rs 1,276.9 crore from 92 anchor investors as it allocated of 84,95,887 equity shares at a price of Rs 1,503 per share. Anchor book included Marquee names like Morgan Stanley, Blackrock, Goldman Sachs, PGGM World Equity, Abu Dhabi Investment Authority, Eastspring Investments, BNP Paribas Funds, Carmignac Portfolio, Copthall Mauritius and more.
The net proceeds from the fresh issue shall be utilized towards the cost of establishing the 6GW of ingot wafer, solar cell and solar PV module manufacturing facility in Odisha, India and general corporate purposes. Proceeds from OFS shall go to the selling shareholders. Shares of the company shall be listed on both BSE and NSE on Monday, October 28.
As of June 30, 2023, the company operates four manufacturing facilities in India, covering a total area of 136.30 acres. These facilities are located in Surat, Tumb, Nandigram, and Chikhli in Gujarat, India. The company also complies with various safety standards for its PV modules.
Waaree Energies clocked a net profit of Rs 401.13 crore with a revenue of Rs 3,496.41 crore for the three-months ended on June 30, 2024. The company reported a net profit of Rs 1,274.38 crore with a revenue of Rs 11,632.76 crore for the financial year ended on March 31, 2024.
The issue of Waaree Energies includes a reservation of equity shares worth Rs 65 crore for the eligible employees of the company. The company has reserved 50 per cent of the net offer for qualified institutional bidders (QIBs), while non-institutional investors (NIIs) have 15 per cent of the allocation. Retail investors will get the remaining 35 per cent.
Axis Capital, IIFL Securities, Jefferies India, Nomura Financial Advisory & Securities (India), SBI Capital Markets, Intensive Fiscal Services and ITI Capital are the book running lead managers of the Waaree Energies IPO, while Link Intime India is the registrar for the issue. Here's what a host of brokerage firms said about IPO of Waaree Energies:
Choice Broking Rating: Subscribe Over the years, WEL has significantly expanded its aggregated installed capacity from 4GW to 12GW and became the largest manufacturer of solar PV modules in India. It has also increased its presence in the export market, particularly in the USA. With successfully increasing its customer base, and its product sales, Waaree has grown in both its top and bottom line, said Choice.
"At the higher price band, WEL is seeking an EV/Sales ratio of 3.3 times, which is at a discount to its peer average. With pro-active regulations, policy support and commitments towards renewable energy by the government, the domestic solar manufacturing market is likely to witness an accelerated growth trajectory in the long-term, we recommend a 'subscribe' rating," it said.
Canara Bank Securities Rating: Subscribe Waaree Energies has demonstrated impressive growth. It is valued at a P/E ratio of 31.28 times, which is attractive considering the company's size and growth potential. It is approximately twice the size of its nearest competitor, which positions it as a market leader in the solar PV manufacturing space, said Canara Bank Securities.
"With its ambitious expansion plans, both in India and the US, along with the goal of achieving full integration across its operations, Waaree Energies is well-positioned for sustained growth. We recommend subscribe rating this issue for listing & long-term gains," it added.
Swastika Investmart Rating: Subscribe "Waaree Energies is the largest solar PV module manufacturer. The company has a strong focus on growth and expansion. It has demonstrated remarkable financial growth. The IPO is offered at a fair P/E valuation," said Swastika Investmart, suggesting investors may consider applying for the IPO, both for potential listing gains and long-term value appreciation.
Anand Rathi Research Rating: Subscribe Waaree Energies is the market leader in manufacturing and exporters of Solar PV modules. It is currently developing an 11.4GW integrated manufacturing facility, which includes a 5.4GW solar cell unit slated for FY25 and a 6GW fully integrated plant to produce ingots, wafers, and solar cells by FY27, said Anand Rathi Research.
"With solar energy emerging as a key global theme in the transition to renewable energy, WEL is well placed to capitalize on the growing opportunity given its leading market share, strong financials, and continued focus on innovation and sustainability with capacity expansion through backward integration. Therefore, we recommend 'subscribe' to this issue," it said.
KR Choksey Finserv Rating: Subscribe Waaree Energies's backward integration strategy, ranging from solar cells to ingots and wafers, along with its exploration into green hydrogen, enhances its operational efficiency and cost control. Waaree’s strong global presence, marked by a new 1.6 GW manufacturing facility in the US, further solidifies its leadership position, said KR Choksey Finserv.
"Its return on equity (ROE) of 30 per cent in FY24, coupled with a solid balance sheet and low debt levels, underscores its financial strength. At a P/E ratio of 33.9 times, Waaree offers an attractive investment opportunity in India’s booming renewable energy market. Based on these factors, we recommend a 'subscribe' rating for the upcoming IPO," it said.
Geojit Financial Services Rating: Subscribe Considering Waaree's extensive experience in module manufacturing, backward integration strategies, leading position in exports and domestic markets with strong order book, Strong financial position and expansion plans and domestic manufacturing opportunities supported by various government policies and the China Plus One strategy, Geojit assigned a 'subscribe' rating for it.
ICICIDirect Research Rating: Subscribe Sales and PAT at Waaree Energies has grown at a CAGR of 100 per cent and 277 per cent, respectively over FY22-24, led by capacity scaleup and consistent improvement in Ebitda margin profile. It clocked Ebitda margins of 13.8 per cent in FY24 with RoCE placed at 22 per cent, said ICICIDirect Research.
"At the upper end of the price band, WEL will command a valuation of 35 times P/E, 22.4 times EV/Ebitda and 3.4 times P/S on FY24 basis which is at a discount to its competitor- Premier Energies. We assign 'subscribe' rating on Waaree Energies given strong growth prospects amid industry tailwinds," it said.
Arete Securities Rating: Subscribe By 2027, the company plans to achieve significant capacity expansions, targeting 11.4 GW of solar cell manufacturing, 20.9 GW of module manufacturing, and 6 GW of ingot and wafer production. Given the company's robust growth trajectory, strategic capacity expansion, and market leadership, we recommend a 'subscribe' to the issue, said Arete Securities.