The initial public offering (IPO) of Waaree Energies has generated significant buzz and strong investor interest, marking a noteworthy event in the Indian financial markets. On its final day of bidding, which occurred on Wednesday, the IPO received a remarkable response, with subscription levels soaring to more than 30 times the shares on offer. This overwhelming demand indicates a robust appetite for Waaree Energies’ shares, reflecting investor confidence in the company's growth potential and market positioning.
According to data released by the Bombay Stock Exchange (BSE), investors had submitted bids for approximately 64.35 crore shares by 2 PM on the last day of the bidding period, dramatically exceeding the 2.10 crore shares available for subscription. This level of oversubscription demonstrates a compelling interest among various investor categories, including retail investors, institutional investors, and high-net-worth individuals.
Analyzing the subscription figures in detail reveals a particularly strong performance across different segments. The non-institutional investor (NII) portion, which caters to high-net-worth individuals, achieved an impressive subscription rate of 42.39 times, underscoring a robust demand from this demographic. Qualified institutional buyers (QIBs) also participated actively, achieving a subscription rate of 11.20 times. The employee category, which allows Waaree’s employees to invest in the IPO, recorded a subscription of 3.77 times, indicating strong internal confidence in the company's future. Additionally, the retail segment, which is crucial for any IPO’s success, received bids amounting to 7.91 times its allocation, further highlighting the enthusiastic response from everyday investors.
Waaree Energies, founded in 1990 and headquartered in Mumbai, has established itself as a leading Indian manufacturer of solar photovoltaic (PV) modules, boasting a substantial installed capacity of 12 gigawatts (GW). The company’s business model is multifaceted, as it is actively involved in solar project development and provides comprehensive engineering, procurement, and construction (EPC) services. These services encompass essential processes such as design, installation, and ongoing maintenance, all supported by a robust and widespread sales and service network across India. Notably, Waaree’s product portfolio is primarily comprised of multicrystalline PV modules, which are integral components in the construction of solar energy systems that harness renewable energy.
Investors considering this IPO will find that shares are being offered within a price range of Rs 1,427 to Rs 1,503 per share. Notably, there is a minimum application requirement, stipulating that investors must apply for at least nine shares or multiples thereof. Through this IPO, Waaree Energies is seeking to raise a substantial total of approximately Rs 4,321.44 crore. This figure includes Rs 3,600 crore derived from fresh issue shares and an offer-for-sale (OFS) of up to 48 lakh equity shares, which will enable the company to fund its growth initiatives and further expand its operational capabilities.
A noteworthy aspect of Waaree Energies’ market performance is reflected in its grey market premium (GMP). Current data suggests a remarkable potential listing gain of nearly 95%, with the company commanding a premium of Rs 1,415 in the unofficial market. This high GMP is indicative of strong investor sentiment and confidence regarding the company’s future trajectory in the stock market.
Financial analysts and brokerage firms are optimistic about the IPO, with many firms issuing favorable recommendations. Several brokerages have advised investors to "subscribe" to the offering based on Waaree Energies’ robust financial health, the increasing demand for solar power, and its reasonable valuations compared to industry peers. Despite this optimism, some analysts have voiced concerns regarding the company's reliance on Chinese suppliers for raw materials and the limited number of supplier options available, which could present challenges in maintaining stable operations.
Prominent brokerage firm Motilal Oswal highlighted Waaree’s leadership position in the solar module market, projecting a strong growth trajectory driven by the escalating global demand for solar energy solutions and favorable government policies supporting renewable energy initiatives. Their recommendation to subscribe to the IPO is firmly rooted in the anticipation of substantial listing gains, reinforcing investor confidence in the company’s potential for future profitability.
At the higher end of the price band for the IPO, Waaree Energies is seeking an enterprise value-to-sales (EV/sales) ratio of 3.3 times. This valuation is considered favorable in comparison to its peers within the solar manufacturing sector, suggesting that Waaree Energies offers a competitive investment opportunity. With a supportive regulatory environment and increasing government backing for renewable energy initiatives, the solar manufacturing industry is poised for significant expansion. Waaree’s strategic approach of backward integration—producing its own solar cells for internal use—is expected to enhance profit margins and overall operational efficiency.
Another brokerage firm, Choice Broking, has also issued a "subscribe" rating for the IPO. They emphasized Waaree Energies' ability to capitalize on the burgeoning demand for solar energy, further bolstered by its plans for backward integration. Analysts from Anand Rathi echoed these sentiments, pointing to Waaree’s solid market position, commendable financial metrics, and the government’s proactive support for renewable energy initiatives as key drivers for future growth and profitability.
The IPO is being managed by a consortium of prestigious financial institutions, including Axis Capital, IIFL Securities, Jefferies India, Nomura Financial Advisory, SBI Capital Markets, Intensive Fiscal Services, and ITI Capital. Link Intime India serves as the registrar for the offering, ensuring a streamlined process for investors. As Waaree Energies prepares to make its debut in the stock market, investor sentiment remains overwhelmingly positive, with expectations for a successful listing that reflects the overall optimistic outlook for the renewable energy sector in India. The company's commitment to advancing solar technology and enhancing sustainability positions it well to attract continued investor interest in the rapidly evolving energy landscape.
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