Should you apply for Waaree Energies IPO? Here's what analysts say
The company has an investment plan of Rs 27.75 billion for its upcoming project, which will be deployed over the next three years.
India's largest manufacturer and exporter of solar panels, Waaree Energies, is set to open its initial public offering (IPO) for subscription on Monday (October 21, 2024) and will close on October 23. The company has fixed a price band between Rs 1,427 and Rs 1,503 per share for its Rs 4,321 crore initial share sale.
What is the objective of the IPO?
To help finance the establishment of a 6GW manufacturing facility for ingot wafers, solar cells, and solar PV modules in Odisha. This investment will supplement the Rs 19 billion PLI Tranche II grant from the Government of India.
Waaree Energies IPO: Should you apply?
The company has an investment plan of Rs 27.75 billion for its upcoming project, which will be deployed over the next three years. Of this amount, Rs 2.75 billion will be spent by FY25E, followed by a major investment of Rs 20 billion by FY26E, and the remaining Rs 5 billion will be utilised by FY27E.
Waaree Energies IPO: Should you apply?
To cover the remaining financial needs, the company has secured a project loan sanction letter from the State Bank of India (SBI).
Should you apply for Waaree Energies? Here is what analysts recommend
Analysts from domestic brokerage, Monarch Networth Capital Limited (MNCL), including Shiwani Kumari and Mohammed Haris have recommended to subscribe for the IPO.
Brokerage outlined four key highlights of Waaree Energies
The brokerage has highlighted four key points related to the company:
- Leading solar module manufacturer by the brokerage
- Capacity expansion
- Government support
- Strong financials
Leading solar module manufacturer
Leading solar module manufacturer: The solar maker company is a top player in India's solar energy with 13.3GW capacity and 21 per cent market share. It exports 44 per cent of India's solar modules, and its strong R&D focus has helped secure an order book of 19.9GW by FY24.
Capacity expansion
Capacity expansion: Waaree Energies aims to grow to 20.9GW by FY27, including a US facility of up to 5GW and also building a 5.4GW solar cell plant and a fully integrated 6GW facility, emphasising innovation and high-efficiency modules.
Government support
Government support: Initiatives like PM-KUSUM and Atmanirbhar Bharat, along with subsidies and incentives, are driving growth in solar energy. WEL, with its large capacity, is well-positioned to benefit from these policies and future investments in green hydrogen.
Strong financials
Strong financials: The company has achieved revenue growth of 80 per cent, EBITDA of 154 per cent, and PAT of 204 per cent from FY21-24.
Should you apply for Waaree Energies IPO? Here's what analysts say
Disclaimer: The views/suggestions/recommendations expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.