Unlisted shares of Waaree Energies Ltd are trading just Rs 1,375 higher in the grey market, signalling a 91.48 per cent listing gain from the public issue.
Waaree Energies IPO: The initial public offering of solar panel maker Waaree Energies Ltd (WEL) is going to be closed today, Wednesday, October 23. The Rs 4,321-crore IPO, which was subscribed over 50 per cent within the first hour of bidding, received 9.19 times subscription till the end of the second day of bidding on Tuesday. Its grey market activity also indicates a robust 92% listing gain for investors.
Now, till 11:13 am on the final day of bidding on Monday, the Waaree Energies IPO received overall bids for 25,02,00,405 shares as against 2,02,56,207 shares on offer, a 12.35 times total subscription.
Its retail quota has been subscribed by 7.84 times so far, while its non-institutional investor (NII) category received an 36.68 times subscription. So far, the QIB quota has received a 1.88 times subscription.
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Waaree Energies IPO: Key Dates
The Waaree Energies IPO will remain opened for public subscription between October 21 and October 23. The share allotment of the Waaree Energies IPO will likely be finalised on October 24, while its shares will be listed on both BSE and NSE on October 28.
Waaree Energies IPO: Price Band
The price band of the Rs 4,310.44-crore IPO has been fixed at Rs 1,427 to Rs 1,503 per share for the public issue.
Waaree Energies IPO: GMP Today
According to market observers, unlisted shares of Waaree Energies Ltd are trading just Rs 1,375 higher in the grey market than its issue price. The Rs 1,375 grey market premium or GMP means the grey market is expecting a 91.48 per cent listing gain from the public issue.
The GMP is based on market sentiments and keeps changing. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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Waaree Energies IPO: Analysts’ Recommendations
Analysts at most brokerages have given ‘subscribe’ ratings to the IPO on the back of Waaree Energies’ growth outlook, strong orderbook as well as financial performance.
Giving a ‘subscribe for medium to long-term investment’ rating, brokerage firm Geojit Financial Services in its IPO note said, “At the upper price band of Rs 1,503, WEL is trading at a P/E ratio of 34x for FY24, which is at a discount compared to its listed peers.”
Considering its experience in module manufacturing, backward integration, leading position in exports, a strong order book, and government policies like China Plus One, we assign a ‘Subscribe’ rating for medium to long-term investment, it added.
Another brokerage firm Anand Rathi also give a ‘subscribe’ rating to the IPO. It said, “The company’s legacy, backed by government support and growth opportunities in renewable energy, could drive additional growth.”
It also believes that with solar energy emerging as a key global theme in the transition to renewable energy, Waaree Energies (WEL) is well-positioned to capitalise on this growing opportunity given its leading market share, strong financials, and focus on innovation and sustainability, alongside its capacity expansion through backward integration.
On valuation, Anand Rathi said Waaree is seeking an FY25 annualised P/E of 26 times, with a market cap of Rs 431,786 million, which is reasonably priced.
Brokerage firm Swastika also gave a ‘subscribe’ rating to the IPO. It remains bullish on Waaree Energies’ focus on growth and expansion, as well as its remarkable financial performance.
The IPO is offered at a fair P/E valuation and that investors should consider applying for potential listing gains and long-term appreciation, Swastika said.
Waaree Energies IPO: More Details
The IPO is a combination of a fresh issue of equity shares aggregating to Rs 3,600 crore and an Offer For Sale (OFS) of 48 lakh equity shares worth Rs 721.44 crore, at the upper end of the price band, by a promoter and existing shareholders. This translates into the total issue size of Rs 4,321.44 crore.
The price band of the IPO is Rs 1,427-Rs 1,503. The minimum lot size for the IPO is 9 shares. So, retails investors need to apply with a minimum investment amount of Rs 13,527. The minimum lot size investment for small NII is 15 lots (135 shares), amounting to Rs 2,02,905, and for big NII, it is 74 lots (666 shares), amounting to Rs 10,00,998.
Moreover, shares valued Rs 65 crore have been reserved for the employees of the solar panel maker.
Under the OFS, promoter Waaree Sustainable Finance Pvt Ltd and shareholder Chandurkar Investments Private Ltd are offloading shares.
Proceeds from the fresh issue will be used for setting up the 6 GW of Ingot Wafer, Solar Cell and Solar PV module manufacturing facility in Odisha. Besides, a portion will be used for general corporate purposes.
The company’s market valuation has been pegged at over Rs 4,300 crore post-issue at the upper end of the price band.
Half of the issue size has been reserved for qualified institutional investors, 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.
Waaree Energies, one of the major players in the solar energy industry in India, is focused on PV module manufacturing with an aggregate installed capacity of 12 GW as of June 30, 2023.
It operates five manufacturing facilities with one factory each, located at Surat, Tumb, Nandigram and Chikhli in Gujarat, and the IndoSolar Facility, in Noida, Uttar Pradesh.
Axis Capital, IIFL Securities, Jefferies India, Nomura Financial Advisory and Securities (India) Private Ltd, SBI Capital Markets, Intensive Fiscal Services and ITI Capital are the book-running lead managers to the issue.
