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Waaree Energies IPO 2024: All Key Details and Latest Updates

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Waaree Energies was one of the most talked-about companies in terms of the 2024 initial public offering. The aspects that prima facie were the most gelling were its strong pricing, good grey market premium (GMP), and subscription numbers. Here are all the important aspects and in-depth analysis of this high-profile IPO:

1. IPO Details and Price Band

Date for Opening and Closing of Waaree Energies IPO: The Waaree Energies public issue has opened its subscription from October 21, 2024. It will close on 23rd October, 2024.

Price Band: This price band has been set from Rs 1427 to Rs 1503 per equity share.

Lot Size: A shareholder can apply the lot of nine shares for bid for this issue.

Amount Raised: The company aims at raising an aggregate of Rs 4,321.44 crore. Of this, a fresh issue of Rs 3,600 crore would be raised along with an Offer for Sale (OFS) of 48 lakh shares.

Anchor Investors: Waaree Energies received the balance amount of Rs 1,277 cr from 92 anchor investors, even before the opening of the IPO itself, an indication of a good response from the market.

2. Grey Market Premium (GMP)

GMP Trends: On 23 October, 2024, the Waaree Energies’ shares were trading at a grey market premium of Rs 1,500, that is, 100 per cent higher as compared to the upper price band of Rs 1,503 per share.

Investor Sentiment: The high GMP is, in fact, a manifestation of the desire of investors to have an oversized stake in the company. Very positive sentiment towards its growth prospects. In simpler words, Investors are willing to pay Rs 1,500 over the issue price to buy shares and are showing confidence in the listing performance of the stock.

3. Subscription Status

Total Subscription: The IPO has seen a huge amount of interest from the investors. Latest update reflects that the IPO has been subscribed 10 times so far.

Retail Investor Interest: There is also a particularly high response coming from retail investors, who have oversubscribed their share 6.7 times.

Bids Received: A host of categories of investors have been seen with Rs 27,971.71 crore coming through in forms of bids with both institutional and retail buyers

4. Reason for the IPO

Manufacturing Enlargement: A portion of the IPO proceeds will further be used to fund the proposed 6 GW Ingot Wafer, Solar Cell and Solar PV Module manufacturing facility in Odisha by Waaree Energies.

General Corporate Purposes: Part of the net IPO proceeds will also be used to meet general corporate purposes so that the company’s overall financial flexibility is maintained and operational needs are serviced.

5. Industry Leadership and Future Prospects by Waaree Energies

Market Leadership in Solar Modules: Waaree Energies is the leading player in the solar energy space. The company has built up installed capacity 6 times from FY20 to FY24. It now is at 13.3GW as against 2 GW it has in FY21.

Market Share: Waaree Energies enjoys a 21% market share of the domestic solar PV module market, and its export of solar modules from India accounts for a commendable 44%.

Order Book: The order book of the company stands at 16.6GW, comprising both domestic and export orders, as on June 30, 2024. Significantly, its US subsidiary, Waaree Solar Americas Inc., constitutes 3.75GW of the order book.

Electrolyser Manufacturing: Waaree Energies will start its electrolysers manufacturing during FY2026-end as part of local operations. This is to further diversity product offerings and capabilities.

6. Financial Performance and Valuation

Earnings and Profitability: For the last three fiscal years, Waaree Energies reported an average EPS of Rs 31.94 and average RoNW at 26.95%.

Valuation Metrics: The problem at the upper price band of Rs 1,503 a share works out to a price-to-book value (P/BV) multiple of 5.35 based on its post-IPO net asset value (NAV) at Rs 281.16. This puts the issue at a price-to-earnings (P/E) ratio of 26.91 based on projected FY25 earnings and a P/E multiple of 44.36 based on FY24 earnings. Analysts feel the issue appears fully priced at these multiples.

7. Analysts Opinion

Anand Rathi Research: The Company highlights Waaree Energies’ strong position in the solar PV module market, rapid capacity expansion, and leadership in exports. They find the growth prospects compelling with a dominant leadership position and robust order pipeline.

Bajaj Broking: Bajaj Broking’s report shows that the company is there with sound financials and leadership position but still, the IPO is at the fully priced state. Before investing in it also requires special caution and valuations must be made very carefully.

8. IPO Allotment and Listing Dates

Allotment Date: The final basis of allotment for the Waaree Energies IPO is slated to be approved on October 28, 2024.
Listing Date: The equity is proposed to be listed on the stock exchanges on October 31, 2024.

9. Conclusion

Waaree Energies’ issue has garnered much interest. It has been one of the leaders in the solar energy segment for quite some time now and leads in terms of having the highest share in the domestic panel market. Its financials have been pretty excellent as well with substantial growth potential. Still, high valuations may take the edge off the offer. Even the good GMP that the issue has attracted reduces the long-term upside from this nearly fully priced offering. The company’s order book, market share, and plans for expansions are some of the key strengths that make this an attractive investment vehicle for those who want to expose themselves to the renewable energy sector in India.

In short, here is the most promising opportunity that comes with the Waaree Energies IPO, but investments always come with risk and reward, so all things considered.

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