Waaree Energies IPO opens for bidding: Should you subscribe or skip?

The Waaree Energies IPO consists of a fresh issue of 2.4 crore shares, amounting to Rs 3,600 crore, along with an offer for sale of 0.48 crore shares, totalling Rs 721.44 crore.

In Short

• Waaree Energies IPO aims to raise Rs 4,321.44 crore
• India's top solar module exporter with 13.3GW capacity
• Strong financials, industry growth suggest IPO subscription

The initial public offering (IPO) of Waaree Energies opened for bidding on Monday, looking to raise Rs 4,321.44 crore from its public issue.

Waaree Energies is India’s largest manufacturer and exporter of solar modules having a capacity of 13.3GW, which grew 6x in just three years from 2GW in FY21. It has a market share of 21% in India and a healthy 44% share in exports of solar modules from India.

The Waaree Energies IPO consists of a fresh issue of 2.4 crore shares, amounting to Rs 3,600 crore, along with an offer for sale of 0.48 crore shares, totalling Rs 721.44 crore.

The IPO will be open for subscription until October 23, 2024. The price band for the Waaree Energies IPO is set between Rs 1,427 and Rs 1,503 per share. Retail investors can apply with a minimum lot size of 9 shares, requiring an investment of at least Rs 13,527.

For small non-institutional investors (sNII), the minimum lot size is 15 lots (135 shares), requiring Rs 202,905, while large non-institutional investors (bNII) need a minimum of 74 lots (666 shares), amounting to Rs 1,000,998.

The book-running lead managers for the issue include Axis Capital Limited, IIFL Securities Ltd, Jefferies India Private Limited, Nomura Financial Advisory and Securities (India) Pvt Ltd, SBI Capital Markets Limited, Intensive Fiscal Services Private Limited, and ITI Capital Ltd. The registrar for the IPO is Link Intime India Private Ltd

SHOULD YOU SUBSCRIBE?

An IPO report from Incred Research Services Private Ltd said that during FY20-24, the company’s revenue/EBITDA/PAT clocked a CAGR of 55%/103%139%, respectively, as the EBITDA margin improved from 4.8% in FY20 to 13.8% in FY24. In 1QFY25, the company’s revenue was at Rs34bn (+2% YoY) while EBITDA and PAT stood at Rs5.5bn (+18% YoY) and ~Rs4bn (+19% YoY), respectively.

"Based on FY25F annualised financials, the IPO’s higher band implies an EV/EBITDA of ~18x, and a P/E of ~27x, which is at a discount to its peers, in our view. We recommend subscription to the IPO, given the strong financials, strong industry tailwinds with long-term opportunities in the solar industry, robust order backlog and further expansion plans," said the report.

LATEST GMP FOR WAAREE ENERGIES IPO

The last grey market premium (GMP) for Waaree Energies IPO stood at Rs 1,480, as of October 21, 2024, 10:32 AM.

With a price band of Rs 1,503, the estimated listing price for Waaree Energies' IPO is expected to be around Rs 2,983, which combines the cap price and the latest GMP. This suggests a potential gain of 98.47% per share

The allotment is expected to be finalised by Thursday, October 24, 2024, and the company's shares are set to be listed on the BSE and NSE, with a tentative listing date of Monday, October 28, 2024.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)