Madhusudan Kela-backed Waaree Energies shares rally up to 9x in two years ahead of IPO

IPO-bound Waaree Energies has delivered multibagger returns to investors in the unlisted market. The stock prices have seen a about nine-fold jump in the unlisted space in less than two years, where some of the Dalal Street veterans of Dalal Street have put in their money.

Mumbai-headquartered Waaree Energies, the flagship company of the Waaree Group, manufactures solar PV modules and provides solar energy solutions in India. It is among the top players in solar panel manufacturing, EPC services, project development, rooftop solutions and solar water pumps.

Waaree Energies undertook a pre-IPO placement between September 2022 to December 2022, where it sold shares for Rs 225 apiece. The stock recently was exchanging hands Rs 2,000 apiece, about 788 per cent higher from the issue price. However, the stock currently trades around Rs 1,800 in the pre-IPO market.

In June 2023, seasoned Dalal Street investor Madhusudan Kela bought 7,25,000 equity shares in Waaree Energies at an issue price of Rs 550 per share, participating in the latest pre-IPO funding round. Kela invested Rs 39.88 crore in the company, which is around 1.28 per cent stake in the company.

Waaree Energies is seen as the biggest gainer of the government's recently launched PM Suryoday Yojana. The company marks its presence in more than 380 locations in India and more than 20 countries across the globe.

Waaree Energies is seen as the biggest beneficiaries of the emerging solar-theme and the company boasts sound order books, solid fundamentals and brilliant execution, said Sandip Ginodia, CEO of Kolkata-based Altius Investech. "The stock had reported a strong performance in the last two financial years, with robust growth in topline and bottom-line," he said.

Waaree Energies reported a profit-after-tax (PAT) at Rs 501 crore with a revenue of Rs 6,840 crore for the year ended on March 31, 2023. The company's revenue stood at Rs 2,950 crore and Rs 1,997 crore and profit came in at Rs 79 crore and Rs 47 crore for FY22 and FY21, respectively.

The government's push on the solar or renewable energy sector is pushing demand for stocks related to them, said Dinesh Gupta, Co-founder of Delhi-NCR based UnlistedZone. "The company is commanding a strong premium in the pre-IPO market as its order books are swelling at a tremendous pace and a revenue of more than Rs 10,000 crore the FY 2023-24 with a profit-after-tax (PAT) around Rs 1,500 crore," he said.

Gupta anticipates IPO price band to be around Rs 1,200-1,400 based on the results for FY24. "Investors are buying the stock from the unlisted markets at a premium price as there is limited scope allotment in the IPO, anticipating a bumper demand for the issue, if things remain stable in the broader markets," said Gupta.

In December 2023, Waaree Energies filed its DRHP with capital market regulator Sebi to launch its IPO. The company is looking to share a fresh share of Rs 3,000 crore and offer-for-sale (OFS) of up to 32,00,000 equity shares. The company is looking to raise Rs 3,500-3,700 crore via IPO route, said the market sources.

Narottam Dharwat from Mumbai-based Dharawat Securities said that the stock has a strong potential in the coming days on the back of brilliant execution, strong demand and sound financials. One should wait for FY24 results and IPO timeline for further course of action but the current valuations price in-all the positive so far.