Waaree Energies IPO: A Promising Investment Opportunity
The Waaree Energies IPO has captured the attention of investors and market analysts alike, showcasing a robust two-day bidding period marked by enthusiastic participation from both non-institutional and retail investors. As the solar photovoltaic (PV) module manufacturer gears up for its public offering, the market sentiment surrounding this IPO stands in stark contrast to other recent offerings, such as those from Deepak Builders & Engineers India and Godavari Biorefineries, which have not generated the same level of excitement.
Key Details of the Waaree Energies IPO
The subscription for the Waaree Energies IPO commenced on October 21, 2024, and will remain open until October 23, 2024. The company has set a price band for its shares between ₹1,427 and ₹1,503, aiming to raise a substantial ₹4,321.44 crore. Out of this amount, ₹3,600 crore is expected to be raised through the issuance of fresh shares. Early indicators suggest that the IPO is receiving a favorable response from the Indian primary market, with the grey market reflecting a bullish outlook, as Waaree Energies shares are reportedly trading at a premium of 100%.
Market observers have noted that the Grey Market Premium (GMP) for the Waaree Energies IPO currently stands at ₹1,375, which is approximately 91.48% higher than the upper issue price of ₹1,503. This positive trend in the grey market over the past ten sessions suggests that a strong listing is anticipated. The lowest GMP recorded was ₹0, while the highest reached ₹1,545, indicating significant investor interest.
Subscription Performance
On the second day of the share sale, Waaree Energies’ IPO was oversubscribed by an impressive 8.81 times. Non-institutional investors led the charge, subscribing 24.38 times, while retail investors contributed with a subscription rate of 6.39 times. Qualified Institutional Buyers (QIBs) also showed interest, subscribing 1.73 times, and the employee segment was booked 3.11 times. The first day of the IPO saw a subscription rate of 3.32 times, with retail investors subscribing 3.17 times and non-institutional investors at 8.09 times.
Financial Performance and Market Position
Analysts have been quick to assign a ‘subscribe’ rating to the Waaree Energies IPO, citing the company’s impressive financial performance. Sagar Shetty, a research analyst at StoxBox, highlighted that Waaree Energies has achieved a remarkable compound annual growth rate (CAGR) of 99.8% in operational revenue from FY22 to FY24. The company’s profit after tax surged from ₹796.50 million in FY22 to ₹12,743.77 million in FY24, with a notable improvement in return on equity (ROE) from 17.69% to 30.26%.
The company’s strategic focus on global expansion, competitive pricing, and a robust order book positions it favorably for sustainable growth. With a price-to-earnings (PE) ratio of 31.4x based on FY24 earnings, Waaree Energies is valued competitively compared to its peers, making it an attractive investment opportunity.
Motilal Oswal echoed this sentiment, stating that the IPO is reasonably priced at 26.9x Q1FY25 P/E (on a diluted basis). The growing global demand for solar energy, coupled with strong government support for the renewable sector and the China Plus One Policy, further enhances the company’s market position.
Recommendations from Analysts
Several brokerage firms, including Aditya Birla Securities, Canara Bank Securities, Choice Broking, Geojit Securities, Marwadi Shares and Finance, Monarch Networth Capital, Ventura Securities, and Swastika Investmart, have all assigned a ‘subscribe’ tag to the Waaree Energies IPO. Their recommendations are based on the company’s strong fundamentals, market leadership in the solar module segment, and the favorable macroeconomic environment for renewable energy investments.
Upcoming Dates
Investors looking to participate in the Waaree Energies IPO should note that the allotment date is expected to be on October 24, 2024, with the listing date anticipated for October 28, 2024.
Conclusion
The Waaree Energies IPO presents a compelling investment opportunity in the rapidly growing renewable energy sector. With strong financial metrics, a favorable market position, and positive investor sentiment, this IPO is poised for success. However, as always, potential investors are advised to conduct thorough research and consult with certified financial experts before making any investment decisions, as market conditions can change swiftly.
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