Upcoming IPO: Waaree Energies GMP Soars High; All You Need To Know Ahead Of Subscription

Waaree Energies, a player in the solar energy sector, is all set to launch its highly anticipated initial public offering (IPO) on Monday, October 21. The IPO will remain open for subscription until Wednesday, October 23, and the anchor investor allocation details are expected to be revealed later today (October 18). With the price band for the IPO set at Rs 1,427 to Rs 1,503 per share, the offering is generating significant buzz.

IPO Structure

Waaree Energies' IPO is structured to cater to a broad spectrum of investors, with 50% of the shares reserved for qualified institutional buyers (QIBs), 15% set aside for non-institutional investors (NIIs), and the remaining 35% allocated to retail investors. In addition, the company has reserved a portion of up to 650 million equity shares for its employees.

Company Overview

Established in December 1990, Waaree Energies is an Indian company that specializes in manufacturing solar photovoltaic (PV) modules. Over the years, the company has emerged as a leader in the renewable energy space, with a total installed capacity of 12 GW. Waaree Energies offers a wide range of solar products, including multicrystalline modules, monocrystalline modules, and TopCon modules. The latter includes flexible bifacial modules (Mono PERC) available in both framed and unframed versions, as well as building-integrated photovoltaic (BIPV) modules.

In terms of listed peers, Waaree Energies is comparable to Websol Energy Systems Ltd and Premier Energies Ltd. Notably, Premier Energies has a high price-to-earnings (P/E) ratio of 151.13.

Waaree Energies has demonstrated strong growth over the last two fiscal years. The company reported a 70% increase in revenue and an impressive 155% surge in profit after tax (PAT) for the fiscal years ending March 31, 2023, and March 31, 2024.

Grey Market Premium (GMP)

One of the most telling indicators of how an IPO will perform is the grey market premium (GMP), and Waaree Energies has shown positive signs ahead of its IPO opening. As of today, the GMP for Waaree Energies stands at +Rs 1,330, according to investorgain.com, which suggests that the company's shares are expected to trade at a substantial premium once they are listed.

At the upper end of the price band (Rs 1,503), the estimated listing price based on the current GMP would be Rs 2,833 per share, representing an impressive 88.49% gain. Experts have noted that the GMP has been on an upward trend over the last five sessions, indicating strong demand and investor confidence in the IPO's performance.

The grey market premium essentially reflects investors' willingness to pay more than the issue price before the stock officially hits the market. As such, it is a good indicator of market sentiment and the anticipated performance of Waaree Energies upon listing.

IPO Details

The Waaree Energies IPO aims to raise up to Rs 3,600 crore through the issuance of new equity shares. Additionally, there will be an offer for sale (OFS) of 4.8 million equity shares with a face value of Rs 10 each. The OFS shares will be sold by Waaree Sustainable Finance Private Ltd, a promoter entity, and Chandurkar Investments Pvt Ltd, a shareholder.

The funds raised through the IPO will likely be used to expand Waaree's production capacity, enhance its research and development capabilities, and explore new business opportunities in the renewable energy market.

Key Players in the IPO Process

The IPO process will be managed by a group of book-running lead managers, including 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. Additionally, Link Intime India Private Ltd has been appointed as the registrar for the IPO, handling all investor-related queries and allotment processes.

Given the company's dominant position in the solar energy space, its impressive financial growth, and the strong demand indicated by the grey market premium, Waaree Energies is poised for a successful IPO. With renewable energy gaining more traction in India, Waaree is in a prime position to benefit from the government's push for solar power and sustainable energy solutions.