Complete Review of Waaree Energies IPO: Should You Invest?
Hello everyone! How are you? The IPO we’ve all been waiting for is finally here – Waaree Energies. This much-anticipated IPO will be open from 21st October to 23rd October. Today, we will talk about everything related to this IPO, from its Gray Market Premium (GMP) to whether you should invest or not.
So, what makes Waaree Energies IPO special? Should you apply? Let’s start, but don’t forget to subscribe to the channel for timely notifications of future videos. If you’re an active trader in the stock market, this channel will keep you ahead with daily updates and weekly videos.
Company Overview & Product Portfolio
Waaree Energies boasts an installed capacity of 12 GW, and their product portfolio includes Mono Crystalline Modules, Multi Crystalline Modules, and TopCon Models. These are primarily solar panels that many of us may recognize or even consider installing in our homes.
In India, Waaree Energies leads the market with 12,000 MW capacity, ahead of competitors like Adani and ReNew Power. This makes them one of the largest players in the solar energy industry.
Growing Industry Demand & Future Projections
When we invest, we always look at the strength of the industry. Energy demand is constantly rising. For example, in 2024, the requirement was 1,627 billion units, while availability was 1,623 billion units. As technology grows, so will energy consumption, leading to an estimated 5% CAGR growth from 2024 to 2029.
Additionally, the global installed capacity for solar PV is projected to grow at 14% CAGR from 2023 to 2028. This makes the solar industry one of the most exciting spaces to invest in.
Waaree Energies IPO Details
The IPO will open on 21st October and close on 23rd October. Here are the key details:
- Price Band: ₹1,427 to ₹1,503
- Issue Size: ₹4,321 Crores
- Fresh Issue: ₹3,600 Crores
- Offer for Sale (OFS): ₹721 Crores
The fact that the fresh issue is so significant (₹3,600 crores) is a positive sign, as it shows that the funds will be used to support business growth, rather than just providing an exit for existing shareholders.
Financial Performance
Let’s now look at Waaree Energies’ financials. Their assets, revenue, and profits have improved significantly year-on-year:
- Profit After Tax (PAT) has doubled.
- Net worth has also increased.
- Debt has risen slightly but remains manageable.
Their order book stands at 23,324 MW, which is incredibly strong, showing a massive pipeline of future projects.
Domestic and Export Revenue Breakdown
Waaree Energies’ business is well-diversified, with 42% of revenue coming from domestic operations and 57% from exports. This diversity in revenue streams reduces risk and adds stability.
Risk Factors to Consider
Though the fundamentals look strong, there are a few risks you should be aware of:
- Top 10 Customer Concentration: Around 40% of their revenue comes from their top 10 clients. If they lose even a few, it could negatively impact revenue.
- Dependence on Exports: With 57% revenue from exports, they are heavily reliant on foreign markets, which could be impacted by global economic conditions or political instability.
- Geographic Concentration: A large portion of their domestic revenue comes from Gujarat, which shows a lack of a nationwide spread.
- Import Duties: If the government imposes import duties on materials or equipment, it could hurt their manufacturing operations.
Gray Market Premium (GMP)
Waaree Energies has generated a lot of excitement in the Gray Market. The GMP is currently ₹1,280, which, based on the issue price of ₹1,503, suggests a potential listing price of ₹2,783, implying an approximate gain of 85%.
However, keep in mind that GMP is never a guarantee of listing gains, so proceed with caution.
Final Thoughts – Should You Apply for Waaree Energies IPO?
Positives:
- Largest solar PV manufacturer in India.
- High potential for growth in the solar energy sector.
- Strong order book and diversified revenue streams.
- Financials are robust, with assets, revenue, and profits all on the rise.
Risks:
- High dependence on top 10 customers and export markets.
- Geographic concentration of revenue.
- Possible risks from import duties.
With its strong fundamentals and promising market outlook, Waaree Energies looks like a solid investment. But as always, be mindful of the risks, especially customer concentration and export reliance.
Before making any investment decision, consult your financial advisor. And if you haven’t opened a Demat account yet, the link is in the description below.