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Waaree Energies Limited All Set to Go Public - Key Things Investors Should Know

  •  4 min read
  • 0•
  • 22 Oct 2024
Waaree Energies Limited All Set to Go Public - Key Things Investors Should Know

India's largest manufacturer of solar PV modules, Waaree Energies Ltd is geared up to come up with its initial public offering (IPO) on 21st October. The IPO consists of a fresh issue of equity shares having a face value of ₹10 each, aggregating up to ₹3600 crores, along with an offer for sale (OFS) of up to 4,800,000 equity shares. This blog highlights key aspects of the company and the IPO that you should know as an investor.

The company plans to utilise the net proceeds from the fresh issue in the following manner:

  • Part finance the cost of establishing the 6GW of Ingot Wafer, Solar Cell and Solar PV Module manufacturing facility in Odisha through investment in its wholly owned subsidiary, Sangam Solar One Private Limited
  • For fulfilling general corporate purposes

Following are the selling shareholders who will offload their stakes in the company through offer for sale:

Name of Selling Shareholder Shares Offered
Waaree Sustainable Finance Private Limited
Up to 4,350,000 shares
Chandurkar Investment Private Limited
Up to 450,000 shares

Like any IPO, the IPO of Waaree Energies Ltd is allocated for various category of investors (see table):

Investor Type Allocation Percentage
QIBs
Not more than 50% of the net offer
Non-institutional bidders
Not less than 15% of the net offer
Retail individual bidders
Not less than 35% of the net offer

Prior to investing in a company’s IPO, it’s crucial for you to have a close view of its financials and Waaree Energies Ltd is no different. The table captures the key financials of the company across different financial years:

Particulars FY 24 FY 23 FY 22
Revenue from operations (in ₹ crores)
11397.609
6750.873
2854.265
Total income (in ₹ crores)
11632.763
6860.364
2945.851
EBITDA (in ₹ crores)
1809.577
944.134
202.532
Profit After Tax Margin
10.96%
7.29%
2.70%
Debt to Equity Ratio
0.08
0.15
0.72
Return on Equity
30.26%
26.26%
17.69%

While the company continues to invest and focus on the Indian market, it has also focused on increasing its export sales, which resulted in an increase in its export sales numbers. The company’s export sales numbers, which stood at ₹657.822 crores in FY 22, jumped to ₹4616.539 crores and ₹6569.096 crores in FY23 and FY24, respectively.

As a part of its expansion plans, Waaree Energies Ltd has earmarked the following business strategies:

  • Implement strategic backward integration to enhance operations and increase profitability
  • Maintain a leadership position in the utility and enterprise modules sales market with continued capacity expansion in India and abroad
  • Focus on technology upgrades to manufacture high-quality modules
  • Continue to grow and diversify its export markets
  • Continue its focus on maintaining a leadership position in commercial industrial, and residential business verticals
  • Continue to scale its operations through organic and inorganic expansion opportunities

While India's electricity requirement has risen at a CAGR of approximately 5.0% between Fiscal 2018 and Fiscal 2024, its power availability rose at approximately 5.1% CAGR thanks to strong capacity additions, both in the generation and transmission segments.

India is expected to almost double its renewable power capacity over 2022 to 2027, with solar PV accounting for three-quarters of this growth. Fiscal 2025 is projected to witness 16 GW to 18 GW of solar projects, including 3.1 GW to 3.3 GW of open-access projects. It must be noted that India aims to build its presence across all stages of PV manufacturing over the next two to three years.

In November 2020, the Government of India introduced the PLI scheme for manufacturing high-efficiency solar PV modules with a financial outlay of ₹ 45 billion. It later enhanced the outlay by ₹ 195 billion under the Union Budget for Fiscal 2023.

With India expected to add around 175-180 GW of solar capacity over Fiscal 2025 to 2030, Waaree Energies Ltd feels it is well positioned to tap the growing demand for solar energy products domestically and internationally due to its extensive experience, deep market penetration and regular capacity expansion.

That said, dependence of the solar energy segment on government policies, technological challenges, supply chain disruptions and competitive pressures are some hurdles that can drag growth in the long run. As an investor, you must be aware of them and consider your overall financial goals and risk tolerance before investing.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.

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