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Waaree Energies, a leading player in the Indian solar energy sector, has made a strong start to its initial public offering (IPO). The Rs 4,321-crore IPO, which opened on Monday, October 21, received a 3.42 times overall subscription by the end of the day, indicating significant investor interest. This positive reception is further reflected in the grey market premium (GMP) which suggests a potential 100.47% listing gain for investors.
The retail quota of the IPO has been subscribed 3.30 times, while the non-institutional investor (NII) category received an impressive 8.10 times subscription. The Qualified Institutional Buyer (QIB) quota, however, has only received an 8% subscription so far, likely due to the strong demand from other investor categories.
Analysts across several brokerage firms have given ‘subscribe’ ratings to the Waaree Energies IPO, citing the company's growth outlook, strong order book, and robust financial performance as key factors driving their positive recommendations. Geojit Financial Services, in particular, highlighted Waaree Energies' trading at a P/E ratio of 34x for FY24, a discount compared to its listed peers. They believe the company's backward integration capabilities, leading position in exports, and the growing demand for solar energy due to government policies like China Plus One, make it an attractive investment opportunity.
Anand Rathi also recommended subscribing to the IPO, citing the company's legacy, government support, and the burgeoning renewable energy sector as key growth drivers. The brokerage firm believes that with solar energy emerging as a key global theme in the transition to renewable energy, Waaree Energies is well-positioned to capitalize on this growing opportunity given its market share, strong financials, and focus on innovation and sustainability. They also highlighted the company's capacity expansion through backward integration.
Swastika, another brokerage firm, echoed the sentiment, assigning a ‘subscribe’ rating to the IPO. They are bullish on Waaree Energies' focus on growth and expansion, as well as its strong financial performance. They believe the IPO is offered at a fair P/E valuation and that investors should consider applying for potential listing gains and long-term appreciation.
The IPO is a combination of a fresh issue of equity shares aggregating to Rs 3,600 crore and an Offer For Sale (OFS) of 48 lakh equity shares worth Rs 721.44 crore. The proceeds from the fresh issue will be used to set up a 6 GW Ingot Wafer, Solar Cell and Solar PV module manufacturing facility in Odisha and for general corporate purposes. The company's market valuation has been pegged at over Rs 4,300 crore post-issue at the upper end of the price band. The IPO will remain open for public subscription between October 21 and October 23, with the share allotment likely to be finalized on October 24. The shares will be listed on both BSE and NSE on October 28.
Source: Waaree Energies IPO: Check Subscription Status, GMP Today, Recommendations