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Jai Hind! Today, we will discuss another upcoming IPO that has caught the attention of investors—Waaree Energies IPO. This IPO has raised several questions: Will it offer good short-term returns, or is it better to hold for the long term? In this article, we’ll dive deep into Waaree Energies’ IPO, its financials, management, valuation, and whether this IPO aligns with your investment strategy.
Introduction to Waaree Energies
Waaree Energies Limited was established in December 1990 and is a leading Indian company in the solar PV module manufacturing sector. The company boasts a total installed capacity of 12 GW (gigawatts). Waaree’s core business is solar energy-related products, including both multi-crystalline and mono-crystalline solar panels. The company operates four manufacturing units in Surat, Tamil Nadu, Nandigram, and Chikli, covering approximately 136 acres.
Waaree Energies IPO Details
| IPO Details | Information |
|---|---|
| IPO Date | October 21, 2024 to October 23, 2024 |
| Listing Date | .. |
| Face Value | ₹10 per share |
| Price Band | ₹1427 to ₹1503 per share |
| Lot Size | 9 Shares |
| Total Issue Size | 28,752,095 shares (₹4,321.44 Cr) |
| Fresh Issue | 23,952,095 shares (₹3,600.00 Cr) |
| Offer for Sale | 4,800,000 shares of ₹10 (₹721.44 Cr) |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Pre-Issue Share Holding | 263,331,104 |
| Post-Issue Share Holding | 287,283,199 |
Waaree Energies’ Main Products and Their Applications
Waaree Energies focuses on manufacturing solar energy products, including solar PV modules, top-cone modules, and various types of crystalline solar panels. With the growing demand for renewable energy, particularly solar energy, and the government’s continuous support, the Waaree Energies IPO has become a focal point for investors.
Competitive Position and Strengths of Waaree Energies
Waaree Energies is one of India’s largest solar PV module manufacturers, with a strong and extensive pan-India distribution network. This allows the company to efficiently supply its products across the country. Its customer base is also quite large, with over 1,300 clients, including not only Indian customers but also international ones. The company’s solid business model positions it for stable growth.
Management and Past Performance of Waaree Energies
Waaree Energies’ management has a proven track record, having already listed two of its subsidiary companies. These subsidiaries have delivered impressive performance, with one showing a 7x to 8x growth in its initial trading price and the other providing 4x returns. This demonstrates the management’s ability to deliver solid returns to investors.
Key Dates and Pricing of Waaree Energies IPO
The Waaree Energies IPO subscription period will be from October 21 to October 23. The allotment will take place on October 24, and shares are expected to be listed on the stock exchange on October 28. The price band for the IPO has been set between ₹1,427 and ₹1,503 per share. Investors are advised to apply at ₹1,503 for the best chance at allocation.
Waaree Energies IPO Timeline (Tentative Schedule)
| IPO Event | Date |
|---|---|
| IPO Open Date | Monday, October 21, 2024 |
| IPO Close Date | Wednesday, October 23, 2024 |
| Basis of Allotment | Thursday, October 24, 2024 |
| Initiation of Refunds | Friday, October 25, 2024 |
| Credit of Shares to Demat Accounts | Friday, October 25, 2024 |
| Listing Date | Monday, October 28, 2024 |
| Cut-off Time for UPI Mandate Confirmation | 5 PM on October 23, 2024 |
Waaree Energies IPO Size and Objectives
The total size of the Waaree Energies IPO is ₹4,300 crore, of which ₹3,600 crore will be raised through a fresh issue, meaning the company will issue new shares to raise capital directly. The remaining ₹700 crore is allocated for an offer for sale (OFS). The ratio between fresh issue and OFS reflects that the company is focused on utilizing the funds for expansion and growth.
Waaree Energies IPO Lot Size
| Application Category | Lots | Shares | Amount (₹) |
|---|---|---|---|
| Retail (Min) | 1 | 9 | ₹13,527 |
| Retail (Max) | 14 | 126 | ₹189,378 |
| S-HNI (Min) | 15 | 135 | ₹202,905 |
| S-HNI (Max) | 73 | 657 | ₹987,471 |
| B-HNI (Min) | 74 | 666 | ₹1,000,998 |
Financial Performance: Waaree Energies by the Numbers
Let’s take a closer look at the financial performance of Waaree Energies:
- Assets: In 2021, the company’s total assets stood at ₹2,200 crore, which increased to ₹12,000 crore by 2023.
- Revenue: Waaree Energies’ revenue has also surged from ₹3,000 crore in 2021 to ₹14,000 crore in 2023, reflecting a nearly 4x increase over three years.
- Profit Margin: The profit margin improved significantly from 2% in 2021 to 11% in 2023. With growing government support, the margin is expected to rise to 12-15% in the coming years.
Waaree Energies Limited Financial Information (Restated Consolidated)
| Period Ended | 30 Jun 2024 | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
|---|---|---|---|---|
| Assets (₹ Cr) | 11,989.48 | 11,313.73 | 7,419.92 | 2,237.4 |
| Revenue (₹ Cr) | 3,496.41 | 11,632.76 | 6,860.36 | 2,945.85 |
| Profit After Tax (₹ Cr) | 401.13 | 1,274.38 | 500.28 | 79.65 |
| Net Worth (₹ Cr) | 4,471.71 | 4,074.84 | 1,826.02 | 427.13 |
| Reserves and Surplus (₹ Cr) | 2,464.69 | 3,825.00 | 585.96 | 230.43 |
| Total Borrowing (₹ Cr) | 261.24 | 317.32 | 273.48 | 313.08 |
Key Performance Indicator
| KPI | Values |
|---|---|
| Market Capitalization (₹ Cr) | 42,939.36 |
| Return on Equity (ROE) | 8.79% |
| Return on Capital Employed (ROCE) | 9.45% |
| Debt/Equity Ratio | 0.06 |
| Return on Net Worth (RoNW) | 8.81% |
| Price to Book Value (P/BV) | 8.84 |
| Profit After Tax (PAT) Margin | 11.47% |
The Future of Waaree Energies: Is It a Long-Term Play?
The future of solar energy and renewable energy in India is bright. With around 280 sunny days a year, the potential for solar energy adoption is immense. Waaree Energies is well-positioned in this growing sector and plans to expand its capacity from 12 GW to 18 GW. The company is also setting up a new 6 GW plant in Odisha.
Investor Sentiment Towards Waaree Energies IPO
Investor interest in the Waaree Energies IPO is high, with estimates suggesting it may be oversubscribed by 50-60 times. While the company aims to raise ₹4,300 crore, investor demand could reach ₹2,40,000 crore. This strong demand makes the IPO attractive for both long-term and short-term investors looking for listing gains.
Potential for Listing Gains
When it comes to listing gains, investors could expect a return of 80-100%, though market volatility could reduce this to around 70-75%. Regardless, the IPO offers a great opportunity for both long-term and short-term gains.
Key Reasons to Invest in Waaree Energies IPO
There are several compelling reasons to consider investing in Waaree Energies IPO:
- Rising Renewable Energy Sector: Solar energy has a promising future, and government support for the sector continues to grow.
- Largest Solar PV Module Manufacturer in India: Waaree Energies has a large network, giving it a competitive edge.
- Strong Profit Margins: The company has demonstrated significant improvement in its profit margins over the last few years.
- Low Debt: Waaree Energies maintains a strong financial position with a low debt-to-equity ratio.
- Proven Track Record of Subsidiary Companies: Waaree’s listed subsidiaries have delivered excellent returns, making this a reliable option for investors.
Risks to Consider
However, there are also risks that investors should keep in mind:
- Market Volatility: Market conditions at the time of listing could impact short-term returns.
- Competitive Pressure: The solar sector is growing, and new competitors could impact Waaree Energies’ market share.
- Regulatory Risks: Any changes in government policies could affect the renewable energy sector.
Conclusion: Should You Invest in Waaree Energies IPO?
The Waaree Energies IPO presents an attractive investment opportunity, particularly for those who believe in the future of solar energy. With strong financials, a proven track record, and potential for listing gains, the IPO appeals to both short-term and long-term investors. However, it is essential to assess your own risk tolerance and market conditions before making a decision.
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