Waaree Energies made a rocking entry in the market on October 28. Its shares started trading at a premium of 69.7% above the issue price on the BSE.
The shares of Waaree Energies debuted on the exchanges on Monday. They got listed at Rs. 2550 on BSE, which was a 69.7% premium over its issue price of Rs. 1503. Additionally, the stock was listed on the NSE at Rs 2,500.
The Rs 4,321 crore IPO received an amazing response. It attracted bids totaling Rs 2.41 lakh crore and received 97.34 lakh applications, making it the highest for any IPO in India’s primary market history.
About Waaree Energies
Waaree Energies is the largest manufacturer of solar PV modules in India, with an installed capacity of 12 GW as of June 2024. In Fiscal 2024, it achieved the second highest operating income among all domestic solar PV module manufacturers in the country.
Waaree Energies currently has five manufacturing plants across India. These are located in Surat, Tumb, Nandigram, and Chikhli in Gujarat, as well as IndoSolar in Noida, Uttar Pradesh. The company is also growing by setting up a 3 GW manufacturing facility in the United States. This will diversify its operations.
For FY24, Waaree Energies’ revenue from operations soared by 69% year-on-year, reaching Rs 11,398 crore. Meanwhile, its profit after tax more than doubled to Rs 1,274 crore.
Utilization of Funds Raised
The proceeds from the IPO will be primarily used for the establishment of a 6 GW facility in Odisha for manufacturing ingot wafers, solar cells, and PV modules. The company also plans to allocate some funds for general corporate purposes.
Future Roadmap for Waaree Energies
Amit Paithankar, CEO of Waaree Energies, told CNBC TV-18, “Demand is strong in both India and the US. We have an order book of 16.67 GW, and it continues to grow”. He also mentioned the company is at 15% margin and will see improvement in next 2 years.
Waaree Energies’ strategy focuses on backward integration, increasing its manufacturing capacity, and enhancing its franchise network.
What should investors do?
Although it was a stellar start for Waaree Energies IPO, however, the listing gains fell short of grey market estimates, where shares were trading at a premium of 84%. Furthermore, post-listing, the company’s shares quickly declined as investors began to book profits. The stock dropped nearly 8% to an intraday low of Rs 2,300 on the NSE, while on the BSE, it fell almost 10% to Rs 2,294.55.
Market experts have offered mixed views on the future strategy of investors. Ambareesh Baliga advised against buying Waaree Energies shares because of high valuations. He recommended that those allotted shares book 50% of their profits, as he doesn’t expect current market levels to hold. “However, one can consider buying in the future at prices closer to Rs 2,000–2,200 per share,” Baliga added.
Shivani Nyati, Head of Wealth at Swastika Investmart, said, “”For those who receive an allotment, holding the stock for the long term could be a good strategy, considering Waaree Energies’ growth potential in the renewable energy space. However, investors with a short-term view may consider booking partial profits on listing day, especially if the stock sees a significant surge”.
Similarly, Astha Jain, senior research analyst at Hem Securities, advised that investors who received Waaree Energies shares should consider booking partial profits while holding onto some for the long term. She noted that the company has strong fundamentals, good brand image, great infrastructure and most of all industry tailwinds are supporting the company.
