Waaree Energies shares make strong debut, list at ₹2,500 on NSE, up 66.3% over IPO price

Waaree Energies IPO listing: Shares of Waaree Energies made a strong on the bourses on Monday, October 28, listing at ₹2,500 on NSE, a premium of 66.33 per cent to the issue price of ₹1,503. Meanwhile, on BSE, the stock debuted at ₹2,550, a premium of 69.66 per cent.

The initial public offering (IPO), valued at ₹4,321.44 crore, was open for subscription from October 21 to October 23. The public offer was priced in the range of ₹1,427-1,503 per share.

Following the three days of bidding, Waaree Energies IPO closed with a robust demand, garnering 79.44 times bids. The IPO received bids for 160.91 crore shares against 2.02 crore shares on offer. The retail investor segment was booked 11.27 times while the non-institutional investors (NII) category saw a subscription of 65.25 times. Meanwhile, the qualified institutional buyers (QIB) quota received 215.03 times bids.

About the IPO

Waaree Energies IPO was a combination of a fresh issue of 2.4 crore shares, worth ₹3,600 crore and an offer for sale of 0.48 crore shares, aggregating to ₹721.44 crore. The company raised ₹1,276.93 crore from anchor investors on October 18. The minimum lot size for an application was nine shares, requiring a minimum investment by retail investors of ₹13,527.

Waaree Energies IPO reserved up to 20% of the offer for QIB, up to 15 per cent for NIIs and up to 35 per cent for retail investors. Meanwhile, 1.5 per cent of the offer was reserved for employees and up to 30 per cent for anchor investors.

The net proceeds from the fresh issue are planned to be allocated toward partially financing the establishment of a 6GW Ingot Wafer, Solar Cell, and Solar PV Module manufacturing facility in Odisha, India. Additionally, a portion of the funds will be directed toward general corporate purposes.

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 are the book-running lead managers of the Waaree Energies IPO, while Link Intime India Private Ltd is the registrar for the issue.

IPO Review

Motilal Oswal had recommended a 'subscribe' rating for Waaree Energies' IPO, noting the issue is attractively priced at 26.9 times its Q1FY25 price-to-earnings ratio (diluted). The firm highlighted Waaree’s market leadership in the solar module sector, coupled with strong demand in the global solar market, robust government backing for renewables, and support from the China Plus One policy. These factors, they believe, create a favourable growth outlook for Waaree, making it likely to attract significant investor interest and listing gains.

Similarly, Sagar Shetty, Research Analyst at StoxBox, also rated the IPO a 'subscribe' for its impressive financial trajectory, including a revenue CAGR of 99.8 per cent from FY22 to FY24 and an increase in profit after tax from ₹796.50 million in FY22 to ₹12,743.77 million in FY24. Shetty pointed out that the return on equity (RoE) improved significantly from 17.69 per cent to 30.26 per cent, reflecting strong operational efficiencies and global expansion efforts. The company's competitive pricing, robust order book, and valuation at a PE ratio of 31.4 times the FY24 earnings offer an advantage over peers. With a solid financial foundation and considerable growth potential, StoxBox suggested a "subscribe" rating for medium- to long-term investment.

About the Company

Established in December 1990, Waaree Energies Limited is an Indian company specialising in the manufacturing of solar PV modules, with a total installed capacity of 12 GW. Its solar energy product lineup includes a variety of PV modules, such as multicrystalline and monocrystalline modules. Additionally, Waaree offers TopCon modules, which feature flexible bifacial modules (Mono PERC), available in both framed and unframed formats, along with building-integrated photovoltaic (BIPV) modules.

Waaree Energies is the largest manufacturer of solar PV modules in India, with the highest aggregate installed capacity of 12 GW as of June 2024. To enhance its global footprint, Waaree is also setting up a 3 GW manufacturing facility in the United States, aimed at meeting rising global solar demand.

For Fiscal 2024, the company reported the second-best operating income among all domestic solar PV module manufacturers in India. In FY24, Waaree reported a 69 per cent year-on-year increase in revenue to ₹11,398 crore, with profit after tax more than doubling to ₹1,274 crore.