Waaree Energies IPO: A Solar Panel Manufacturer’s Remarkable Journey: The initial public offering (IPO) of Waaree Energies Limited (WEL), a prominent solar panel manufacturer, was officially concluded on Wednesday, October 23. The IPO, valued at ₹4,321 crores, witnessed overwhelming interest right from its first hour, with over 50% of shares subscribed. By the end of the second bidding day on Tuesday, the subscription surged to an impressive 79.44 times. Additionally, activities in the grey market suggest a potential listing gain of 92% for investors.
As of the final bidding day on Monday, by 5:00 PM, Waaree Energies had received total bids for 1,60,91,61,741 shares, while only 2,02,56,207 shares were available, indicating a total subscription rate of 79.44 times. The retail segment saw a staggering 11.27 times subscription, while the non-institutional investor (NII) category was subscribed 65.25 times. The Qualified Institutional Buyers (QIB) category received an astounding 215.03 times subscription. Notably, the employee quota also received 5.45 times subscription.
The share allocation for Waaree Energies’ IPO is expected to be finalized on October 24, while the shares are set to be listed on both the BSE and NSE on October 28.
Key Dates for Waaree Energies IPO
The public subscription for Waaree Energies’ IPO was open from October 21 to October 23. The share allocation is expected to be finalized on October 24, with the listing scheduled for October 28 on both BSE and NSE.
IPO Pricing and Market Performance
The IPO, amounting to ₹4,310.44 crores, has a price band set between ₹1,427 and ₹1,503 per share. According to market observers, Waaree Energies’ unlisted shares are currently trading at a premium of ₹1,470 in the gray market, indicating a promising listing gain of 97.8% from the issue price. This gray market premium has increased from ₹1,375 earlier in the day, reflecting the market’s positive sentiment. The gray market premium signifies the investors’ willingness to pay more than the issue price, indicating robust demand.
Analyst Recommendations
Most brokerage firms have rated the Waaree Energies IPO as a “subscribe,” based on its growth prospects, solid order book, and financial performance. Geojit Financial Services recommended a “subscribe for medium to long-term investment,” noting that at the upper price band of ₹1,503, WEL trades at a PE ratio of 34x for FY24, which is favourable compared to its listed peers.
Taking into account its expertise in module manufacturing, backward integration, leading export position, and government policies favouring a China-plus-one strategy, they believe Waaree Energies is well-positioned to capitalise on the growing opportunities in renewable energy. Another brokerage, Anand Rathi, echoed this sentiment, stating that the company’s legacy, supported by government backing and growth opportunities in renewable energy, could drive further growth.
More Insights on Waaree Energies IPO
The IPO comprises a new issue of equity shares worth ₹3,600 crores and an offer for sale (OFS) of 48 lakh equity shares by promoters and existing shareholders at the upper end of the price band, totaling ₹721.44 crores. This increases the total amount raised to ₹4,321.44 crores.
The price band for the IPO ranges from ₹1,427 to ₹1,503, with a minimum lot size of 9 shares for retail investors, requiring a minimum investment of ₹13,527. For small NIIs, the minimum investment is 15 lots (135 shares), totaling ₹2,02,905, while large NIIs must invest in 74 lots (666 shares), amounting to ₹10,00,998.
Additionally, shares worth ₹65 crores have been reserved for the employees of the solar panel manufacturer. Under the OFS, promoters such as Waaree Sustainable Finance Private Limited and shareholder Chandurkar Investment Private Limited are selling their shares.
The funds raised through the new issuance will be utilized to establish a 6 GW ingot wafer, solar cell, and solar PV module manufacturing facility in Odisha, while a portion will also be allocated for general corporate purposes. Post-issue, the company’s market capitalization is expected to exceed ₹4,300 crores at the upper end of the price band.
Half of the issue is reserved for qualified institutional buyers, 35% for retail investors, and the remaining 15% for non-institutional investors. Waaree Energies stands as one of the key players in India’s solar energy sector, focusing on PV module manufacturing with a total installed capacity of 12 GW as of June 30, 2023.
The company operates five manufacturing facilities located in Surat, Tumb, Nandigram, and Chikhli in Gujarat, along with the Indosolar facility in Noida, Uttar Pradesh.
Axis Capital, IIFL Securities, Jefferies India, Nomura Financial Advisory and Securities (India) Private Limited, SBI Capital Markets, Intensive Fiscal Services, and ITI Capital are the book-running lead managers for this issue.
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