Waaree Energies Limited will issue an amount of ₹4,321.44 crores through its IPO, where ₹3,600 crores is a fresh issue and ₹721.44 crores an offer for sale. Its IPO will open on October 21, 2024 and close on October 23, 2024 with a listing plan on 28th October, 2024. Here’s everything we should know about Waaree Energies IPO the strengths, challenges, and potential of Waaree Energies in this insightful review of the IPO!
Waaree Energies Limited: A Quick Overview
Waaree Energies Limited, incorporated in 1990, an Indian-based company in Mumbai. WEL is the largest solar photovoltaic module manufacturer in India, with a cumulative installed capacity of 12 GW as of June 2024. WEL began its venture in the solar PV sector in 2007 and moved forward through its mission of sustainable, cost-effective energy solutions; the current mission is to reduce global carbon footprints and pave the way for clean energy.
Waaree Energies has five state-of-the-art manufacturing units located across India for both the domestic and international market. With a presence in over 20 countries and over 388 franchise locations in India, it continues to make marks around the world.
Among those expansions are its ongoing efforts in setting up the 6 GW manufacturing facility in Odisha, including ingot wafer, solar cell, and PV module production. The company also plans to construct a 3 GW manufacturing plant in the United States, following the path to renewable energy and sustainable growth.
Diverse Product Range
Waaree Energies offers Mono PERC, Bifacial, BIPV, Flexible and Polycrystalline solar PV modules in an array of different products. Their product line extends from the inverter and all the way up to energy storage systems and turnkey EPC services. Waaree provides solar solutions to residential and commercial industrial sectors for becoming the forerunner in India’s renewable energy front.
Industry Overview: Solar Energy’s Rapid Growth
Overall, the global solar market is on a growth trajectory. For example, as of 2023, solar PV capacity stood at 1,411 GW. Further capacity of 347 GW is anticipated in the near term. An overall projection of solar PV capacity to grow 14% CAGR from now through 2028 is likely, and the capacity is expected to reach 2,733 GW in that year.
In the solar market, India has taken over the top spot globally, with installed solar capacity higher than 72 GW as of 2023, thereby making it the world’s fourth-largest solar market. In fact, India hopes to touch 280 GW of solar capacity by 2030 and such will be an important part of its vision to get to net zero by 2070.
Waaree Energies Limited: Financial Performance
Waaree Energies reported sequential and year-on-year growth of 68.83% in revenue that stood at ₹11,397.61 crores in FY24. Revenue for June 2024 stood at ₹3,408.90 crores. Waaree Energies has witnessed a growth in revenue from solar power products in the home (42.23%) and overseas (57.77%) markets with a CAGR of 99.83% in two years. In FY24, sales of its solar power product witnessed revenue coming in at 87.69%. Services and EPC stood at 4.41% and 7.43%, respectively.
Waaree Energies saw a rise in the consolidated net profit from ₹500.28 crores in FY23 to ₹1,274.38 crores in FY24-an upswing of 154.73%. The excellent rise in EBITDA margins from 13.76% in FY23 to 15.56% further reinforces the growth. Meanwhile, the debt-to-equity ratio of the company fell to 0.08x in FY24 from 0.15x in FY23. It exemplifies good health in Waaree’s finances, the result of sound operational management and strategic growth planning.
Competitor Landscape
Waaree Energies is in a league of its own, followed closely by Websol Energy System Limited and Premier Energies Limited. The company’s production capacity as of June 2024 stands at 12 GW, grossly higher than Websol Energy’s 0.55 GW and Premier Energies’ 4.13 GW. Meanwhile, with PAT margins of 10.96%, Waaree Energies has surpassed Premier Energies, which holds a PAT margin of just 3.36%.
The company’s strength in infrastructure, including its debt-to-equity ratio, situated strategically within the market, works well to set it apart from other competitors.
Strengths of Waaree Energies Limited
Large Production Capacity:
Waaree is the largest solar PV module manufacturer in India, with a capacity of 12 GW
Export Master:
Waaree became the largest solar module exporter from India, driving exports by 87% to 6,077 MW in FY24.
Vertical Integration:
The company decreases reliance on third-party suppliers and improves profitability by becoming vertically integrated into ingot-wafer and solar cell production.
Global Expansion Plans:
The 3 GW plant being developed in the United States aligns with Waaree’s goal of becoming a global market for itself and expanding beyond India.
Green Hydrogen Projects:
Plans to manufacture green hydrogen will also be in place, but these are still to be considered part of future diversification and sustainability for the company
Manufacturing Network:
Five manufacturing plants spread across India have made it possible for the company to maintain a robust domestic as well as international supply chain.
Capital-Intensive Expansion:
New capacities such as the 6 GW facility in Odisha would entail massive investments that would wipe out the funds.
Weakness of Waaree Energies Limited
Competition:
The global solar market is a highly competitive one, and established players already are from China. This would influence Waaree’s price initiatives.
Policy Contingent:
Waaree’s expansion depends on the incentives and tariffs provided by the government. Any change or update in policies can influence its market position.
Logistical Issue:
Third-party logistics are used by Waaree for transporting modules. This at times results in delay in projects.
Project Delays:
When the construction or acquisition of new facilities happens through regulation, such as that of the U.S. plant, may delay Waaree’s expansion
Dependency on External Funds:
Waaree’s expansion projects will be constraint to increased interest rates or unfavorable lending as it needs external funding.
IPO Details of Waaree Energies
As of October 9, 2024, Waaree’s shares were quoted at 90.82% premium in the grey market, quoting at ₹2,868. This is a premium of ₹1,365 over the cap price of ₹1,503. Lead managers of the IPO are Axis Capital and SBI Capital Markets.
| IPO Details | Information |
|---|---|
| IPO Date | October 21, 2024 to October 23, 2024 |
| Listing Date | [Pending] |
| Face Value | ₹10 per share |
| Price Band | ₹1427 to ₹1503 per share |
| Lot Size | 9 Shares |
| Total Issue Size | 28,752,095 shares (aggregating up to ₹4,321.44 Cr) |
| Fresh Issue | 23,952,095 shares (aggregating up to ₹3,600.00 Cr) |
| Offer for Sale | 4,800,000 shares of ₹10 (aggregating up to ₹721.44 Cr) |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Share Holding Pre-Issue | 263,331,104 |
| Share Holding Post-Issue | 287,283,199 |
Objectives of the IPO: The proceeds will be used for setting up the Odisha manufacturing facility and for general corporate purposes.
Conclusion (Waaree Energies IPO )
Waaree Energies Limited is an excellent investment opportunity with dominance in the market, healthy finance, and aggressive growth plans. Going by the back integration approach, ventures into green hydrogen, and having a solid footing internationally shows diversified growth plan for the company. Because the renewable energy sector in India continues growing, it is within the best position to capture most of the local and international demand, and that is why Waaree finds itself as an ideal candidate for investors looking to invest in renewable energy in India’s burgeoning solar market through this IPO
Disclaimer: This article is for educational purposes only and is not financial or investment advice. Always do your own research or consult a licensed financial advisor before making investment decisions. The author is not liable for any financial loss resulting from actions taken based on this information.
