Waaree Energies Ltd. IPO - India's Largest Solar PV Manufacturer | Investment Opportunity

Founded in December 1990, Waaree Energies Limited is a leading Indian manufacturer of solar PV modules, with a total installed capacity of 12 GW.

The company’s product range includes:

• Mult crystalline modules
• Monocrystalline modules
• TopCon modules, including flexible bifacial modules (Mono PERC), both framed and unframed, as well as building-integrated photovoltaic (BIPV) modules.

Objective of the issue

Waaree Energies' IPO is a book-built issue valued at ₹4,321.44 crores. It consists of a fresh issue of 2.4 crore shares totalling ₹3,600 crores and an offer for sale of 0.48 crore shares worth ₹721.44 crores.

The IPO opens for subscription from October 21, 2024, to October 23, 2024, with allotments expected by October 24, 2024. The stock is set to list on BSE and NSE.

The net proceeds of the fresh issue will be used for the financing the cost of establishing the 6GW of the Ingot Wafer, Solar cells and Solar PV module manufacturing facility in Odisha

IPO LOT SIZE

Investment Rationale

·       Growth in Renewable Energy

- Global renewable electricity consumption is expected to increase 1.8 times between 2023 and 2030, according to the International Energy Agency (IEA). 

- The share of renewable electricity is projected to rise from 30% in 2023 to 46% by 2030, with solar power playing a key role in this growth. 

- Waaree is India’s largest solar PV module manufacturer, with a total installed capacity of 13.3 GW as of June 30, 2024. 

·       Capacity Expansion

- Waaree's capacity grew from 4 GW in FY22 to 12 GW in Q1 FY25. 

- After June 2024, the company commissioned an additional 1.3 GW facility in Noida, Uttar Pradesh, through its subsidiary, Indosolar Limited. 

- Waaree operates four manufacturing plants in Gujarat (Surat, Tumb, Nandigram, and Chikhli), which are equipped for raw material storage, product manufacturing, and quality control. 

- The company manufactures both multicrystalline and monocrystalline solar modules. 

Financial Snapshot

Key Risks.

·       Dependence on Imports: A large portion (~90% in FY24) of Waaree's raw materials, especially solar cells, are imported from China and Southeast Asia. Any import restrictions imposed by the Indian government or international authorities could negatively impact the company’s operations and growth prospects.

·       Changing Technology: The solar PV industry is rapidly evolving, with advances in efficiency and cost driving demand for newer technologies. Dependence on Chinese suppliers for manufacturing expertise adds pressure to maintain quality and adapt quickly, especially in solar cell production, which faces higher obsolescence risks than panel manufacturing.

·       Regulatory Uncertainty: Solar energy segment is largely dependent on government policies. Changes and developments in government policies will play an important role in changing the solar manufacturing landscape in India. Despite the government being supportive, there has been policies and amendments which state otherwise.

Should you SUBSCRIBE?

We suggest you should SUBSCRIBE Waree Energies, given it is in good position to take on market share and capture industry tailwinds for the growth prospects for solar energy in India and globally.

Company is successful in building international presence with customers coming from United States, Canada, Turkey, Hong Kong, Italy, and Vietnam. Backward strategy integration will further enhance company’s operations and efficiency will lead to lower costs and higher profit margins. Waree is one of the biggest retail players in India with a network focused on the rooftop and MSME businesses.

Better growth prospects paired with operational resilience and superior market share makes Waree Energies Ltd a desired investment destination.

Disclaimer:
The information provided in this content is for educational purposes only and should not be considered as financial or investment advice. Always do your own research and consult with a qualified financial advisor before making any investment decisions. Waaree Energies Ltd. IPO details and other financial information are subject to change and should be verified through official sources.