Waaree Energies IPO: A Solar Powerhouse Lights Up the Markets with Stellar Debut- What’s Next?

Waaree Energies Share Price Strong Debut 

Waaree Energies Ltd. has captured the spotlight on Dalal Street with its much-anticipated initial public offering (IPO) debuting on October 28, 2024. Priced at Rs 1,503 per share, the share price listed at Rs 2,500 on the NSE and Rs 2,550 on the BSE, marking a stellar start with a 66.33% premium on the NSE and nearly 70% on the BSE. This high-profile IPO reflects investor confidence in India’s renewable energy growth story, as Waaree positions itself as a leading player in solar module manufacturing.

High Demand and Record-Breaking Subscription

Waaree Energies’ IPO received an overwhelming response, setting records and surpassing previous IPO giants like Bajaj Housing Finance, Tata Technologies, and LIC. The Rs 4,321 crore offering saw subscriptions worth Rs 2.41 lakh crore and an overall subscription rate of 76.34 times by day three.

Breakdown of Subscription Categories:

• Institutional Investors: A remarkable 208.63 times subscription, highlighting immense interest from large funds and institutional backers.
• Non-Institutional Investors: 62.48 times subscription, indicating strong confidence from high-net-worth individuals.
• Retail Investors: Subscribed 10.79 times, showing robust demand from individual investors.

The high grey market premium (GMP) of 85% leading up to the listing further underscored the IPO’s popularity and anticipated success.

Key Financial Highlights and Market Cap

The successful debut was underscored by Waaree Energies’ robust financial performance and operational scale. The company’s total market capitalization reached Rs 67,857.73 crore, with an intraday high of Rs 2,624.40 on the NSE. However, by mid-morning, the share price was trading slightly lower at Rs 2,344, reflecting the inherent volatility on listing day.

Financial Snapshot:

• Revenue Growth: 70% YoY increase as of FY24.
• Profit After Tax (PAT): 155% increase, signaling strong profitability growth.
• Export Revenue: Rs 6,500 crore generated from international markets in FY24.

The company’s revenue trajectory and profit surge place it among the fastest-growing companies in the renewable energy sector.

Strategic Use of IPO Funds: Expanding Solar Capacity

Waaree Energies plans to channel the funds raised towards expanding its manufacturing capabilities and supporting corporate objectives. The IPO proceeds will fund the establishment of a new 6-gigawatt (GW) facility in Odisha, covering the entire production process from ingots to PV modules. This move not only enhances Waaree’s production capacity but also aligns with India’s ambitious renewable energy goals.

Manufacturing Capacity and Market Share

Waaree Energies is a dominant force in India’s solar module market, with an aggregate installed capacity of 12 GW across five facilities in Gujarat and Noida. Holding a 44% share in India’s solar module export market, Waaree has secured significant contracts in the US, solidifying its position as a global player.

What Lies Ahead for Investors?

For investors, Waaree’s solid order book of 19.9 GW and focus on export growth could make it a promising long-term investment. The renewable energy sector in India is expanding, driven by government initiatives and corporate commitments to sustainable practices. Long-term investors may consider holding onto the stock, given its potential for growth and profitability in a sector poised for expansion.

However, for those with a short-term view, partial profit booking on listing day could be a wise strategy, especially given the high debut premium. As always, investment decisions should align with individual financial goals and risk tolerance.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.