Inox Green Energy likely to make forgettable market debut today. Here's why

Inox Green Energy, whose initial public offer (IPO) ran from November 11 to November 15, will list on BSE and NSE today.

As per grey market trends, it will be a forgettable listing. The listing ceremony for the wind power operation and maintenance service provider is scheduled to take place at BSE. 

The issue, which was commanding a GMP of Rs 8-10 during its IPO bidding process, may see flat listing, as the current discount stands at Re 1 per share. The issue price is set at Rs 65.  

Inox Green Energy Services is a provider of long-term O&M services for wind farm projects, specifically O&M services for wind turbine generators (WTGs). The company offers O&M services for all WTGs sold by Inox Wind through the entry of long-term O&M contracts between the WTG purchaser and terms that typically range between 5 to 20 years.

The loss-making company's IPO was subscribed 1.55 times, heled by retail (4.7 times) and qualified institutional buyers (1.05 times).  The quota reserved for non-institutional investors went undersubscribed at 47 per cent.

Brokerages such as Arihant Capital Markets, Ventura Securities, Hem Securities and  KR Choksey Shares & Securitieshad ‘subscribe’ ratings on the issue.

Favourable national policy support, a strong and diverse portfolio, backing by parent company Inox Wind, visibility for future growth and long-term O&M contracts were seen as key positives for Inox Green Energy. That said, the IPO valuation was a bit pricey based on the financial numbers.

There is no listed peer for Inox Green Energy. Among global players are Siemens Gamesa's (EV/Ebitda multiple of 35.2 times) and Vestas Wind (18.7 times EV/Ebitda for 2021).

KR Choksey in its report said it was cautious on the company's order book, as most of its contract is from its parent, IWL. But it was optimistic on the company's prospects, considering the consistent track record of the company, strong parentage and government initiatives to push renewable sector. 

It expected financials of the company to improve with reducing debt on the books.

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Also Read: Inox Green Energy likely to make forgettable market debut today. Here's why