The initial public offering (IPO) of Waaree Energies Ltd, one of India's top solar PV module producers, has generated a lot of interest in the market. The IPO has been oversubscribed more than 11 times as of October 23, the last day of bidding, indicating high interest from investors. Positive signals from the grey market, where shares are selling at a substantial premium, coincide with this surge in subscriptions.
IPO Subscription
Bidding for Waaree Energies' initial public offering (IPO) began on October 21 and is scheduled to end today. As of the third day of the IPO, bids for a total of 23.44 crore equity shares were received against the offer of 2.10 crore shares, resulting in a subscription of nearly 11.12 times of the total offer. Notably, non-institutional investors (NIIs) have oversubscribed 33.47 times, while the retail investor category has responded strongly by subscribing 7.15 times. However, the component of qualified institutional buyers (QIBs) is smaller at 1.78 times, indicating that different types of investors have varying levels of interest.
Waaree Energies Valuation and Market Position
At the higher end of the pricing range, the business is expected to raise about ₹4,321.44 crore. The IPO price range has been set between ₹1,427 and ₹1,503 per share. According to analysts, Waaree Energies' valuation is cheap compared to its competitors in the solar power industry, with a price-to-earnings (PE) ratio of 31.4x based on FY24 results. The firm is well-positioned for future growth given its valuation, its strong financial performance, and its large order book. The 'Subscribe' recommendation for medium to long-term investors has been issued by BP Equities.
Grey Market Premium Insights
The success of the Waaree Energies IPO in the grey market is one of its most notable aspects. With the recent rise in the grey market premium (GMP) to ₹1,377 per share, Waaree Energies shares now command a 92% premium over the upper issue price of ₹1,503. This optimistic trend has further fuelled interest in the IPO, reflecting significant investor confidence in the company’s ability to turn profitable post-listing.
Company Background
With a manufacturing capacity of 12 GW, far more than its nearest competitor, Waaree Energies is the largest producer of solar PV modules in India. The firm offers a wide range of solar modules, including Topcon, monocrystalline, and multi-crystalline modules, and has five manufacturing plants. As a contractor, it also offers engineering, procurement, and construction (EPC) solutions.
Disclaimer
The article is only made for informational purposes and not meant for financial advice. Please, before taking any decision to invest in the stock market, make sure not to forget to get advice from certified financial experts.
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