The initial public offering (IPO) of Waaree Energies continued to see a solid response from the investors during the second day (Day 2) of the bidding process. The issue, which kicked-off for bidding on Monday, October 21, was overall booked more than 3.3 times, thanks to the HNI and retail push.
Waaree Energies is selling its shares in the price band of Rs 1,427-1,503 apiece. Investors can apply for a minimum of nine shares and its multiples thereafter. It is looking to raise Rs 4,321.44 crore via IPO, which includes a fresh share sale of Rs 3,600 crore and an offer-for-sale (OFS) of up to 48,00,000 equity shares.
According to the data from BSE, the investors made bids for 13,86,05,184 equity shares, or 6.58 times, compared to the 2,10,79,384 equity shares offered for the subscription by 2.30 pm on Tuesday, October 22. The three-day bidding for the issue will conclude on October, October 23.
The allocation for non-institutional investors (NIIs) was subscribed 17.80 times, while the portion reserved for retail investors saw a subscription of 5.55 times. The allocation for employees was booked 2.67 times. However, the quota set aside for qualified institutional bidders (QIBs) quota saw bids 16 sper cent for their allocations as of the same time.
Mumbai-based 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;
The grey market premium (GMP) for Waaree Energies has been signaling at bumper listing pop for the investors on the back of strong demand. Last heard, the company was commanding a premium of Rs 1,350-1,400 in the unofficial market, suggesting a listing pop of nearly 100 per cent for the investors.
Brokerages have a positive view on the issue and suggest subscribing for a long term due to strong financial record, rising solar power demand, robust market shares, growth potential in future, expansion plans expansions and reasonable valuations. However, dependence on China for raw material, reliability on limited players and any changes in government policy are key concerns.
Waaree Energies has backward integrated manufacturing facilities with an NABL accredited laboratory, global certifications, multiple awards, diversified base of global and Indian customers and enjoys leadership in the retail segment with pan India distribution and network, said Reliance Securities.
"We believe the current leadership in the domestic market, 44 per cent share of India’s module exports, organic and inorganic capacity expansion in multiple solar related products, focus on module upgrades, steers the company to continue with strong earnings growth in the coming years. Hence, we recommend a subscription to the issue," it said.
Ahead of its IPO, Waaree Energies raised Rs 1,276.9 crore from 92 anchor investors as it allocated 84,95,887 equity shares at a price of Rs 1,503 per share. It clocked a net profit of Rs 401.13 crore with a revenue of Rs 3,496.41 crore for the quarter ended on June 30, 2024. It reported a net profit of Rs 1,274.38 crore with a revenue of Rs 11,632.76 crore for the financial year 2023-24.
Waaree Energies is set to list at a P/E of 32 times with a market cap of Rs 43,178.66 crore whereas its peers, Websol Energy System and Premier Energies, are trading at P/E ratios of 669 times and 222 times, respectively, said Marwadi Financial Services. "We assign 'subscribe' rating to this IPO as it is the Largest solar PV module manufacturer in India and available at reasonable valuations."
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.
Waaree Energies has been able to harness the opportunity while staying nimble footed to changes in the technologies. The revenues have grown 4 times while the EBITDA and PAT have grown 9 times and 15 times, respectively over FY22-24, said Aditya Birla Capital with a 'subscribe' rating on the IPO for a long term.
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.