Waaree Energies IPO subscribed about 37x on Day 3 so far, GMP sees recovery

The initial public offering (IPO) of Waaree Energies continued to see a solid response from the investors during the third and final day of the bidding process. The issue was overall booked more than 3.3 times and ended day two with more than 9 times subscription.

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 77,21,66,358 equity shares, or 36.63 times, compared to the 2,10,79,384 equity shares offered for the subscription by 2.45 pm on Wednesday, October 23. The three-day bidding for the issue, which opened on Monday, October 21, concludes today.
 

The allocation for qualified institutional bidders (QIBs) was subscribed 74.32 times, while the portion reserved for non-institutional investors (NIIs) saw a subscription of 54.10 times. The allocation for employees was booked 4.52 times. However, the quota set aside for quota saw bids 9.54 times 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 it a multibagger in making on the back of strong demand. Last heard, the company was commanding a premium of Rs 1,400-1,450 in the unofficial market, suggesting a listing pop of nearly 95 per cent for the investors. The GMP had dropped to Rs 1,350 on Tuesday.

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.

The IPO is reasonably priced at 26.9 times. With Waaree Energies being a market leader in the solar module segment along with positive factors like growing global demand for solar energy, strong government focus on renewable sector and impetus on China Plus One Policy, we believe the company is favourably positioned, said Motilal Oswal.

"Hence, we recommend ‘subscribe’ on the issue given current buoyant market and high interest for renewable energy related stocks, the issue could catch investors fancy and hence could see listing gains as well," 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 the largest manufacturer of solar PV modules in India with a pan-India network and well positioned to capture industry tailwinds and growth prospects for solar energy in India and globally. It has advanced manufacturing facilities with global accreditations alongside holds a large order book with a diversified base of global and Indian customers, said Hensex Securities.

"The company has a healthy balance sheet with total borrowings at Rs 317.32 crore in FY24 with debt/ equity ratio at 0.08 times and interest coverage ratio at 22.17 times. We recommend investors 'subscribe' to the issue for listing gains as well as for long term investment perspective," it said.

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 has a strong presence in the solar project development sector, offering comprehensive EPC services that include design, engineering, procurement, installation, and maintenance of solar power projects. Waaree's extensive sales and service network spans across India, ensuring that customers have access to reliable solar solutions and support, said Ventura Securities.

"With a focus on innovation, sustainability, and customer satisfaction, Waaree Energies has established itself as a leading force in India's transition to renewable energy, contributing significantly to the country's solar energy capacity and helping to reduce its carbon footprint," it added with a 'subscribe' tag.

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.