Waaree Energies Listing: Retail Investors To Determine Liquidity Squeeze In Shares

Waaree Energies Ltd. listed at a premium of 66% on the National Stock Exchange over its issue price of Rs 1,503 apiece. The net issue (excluding anchor book) was subscribed 79.7 times and saw a demand of Rs 2.4 lakh crore, led by 214.7 times subscription by qualified institutional buyers.

The significant subscription of small-NII and large-NII portions has led to significant listing premium for the company's share price.

The issue allotment saw only 11 lakh retail investors getting just 9 shares, or one lot, each in the IPO. Small NIIs received just 135 shares, or 15 lots, worth Rs 2 lakh, and large NIIs got similar number of shares.

The issue comprised of 10% of the equity of the company. Retail investors, including NII categories, were allotted 5% of the equity or 1.45 crore shares.

Nearly one in seven eligible retail applications received minimum lot comprising of nine shares worth Rs 13,527.

The qualified institutional buyers, led by mutual funds and foreign investors, largely have only 1.97% of the equity which is freely available for trade.

In total, 7.05% of the equity, or 2 crore shares, of the company will be available for trade upon listing.

Retail category was subscribed 11.06 times, small-NII category was subscribed 52.49 times, large-NII category saw demand of 70.73 times, and the QIB portion was subscribed 214.7 times.

Mutual funds held 1.18% equity while foreign portfolio investors held 2.23% equity in the company.

As per regulation, the company allocated 60% of the QIB portion to anchor investors. This amounts to 3% of the company's equity or 84.95 lakh shares. Fifty percent of the anchor book shares will be released from lock-in on Nov. 23 and remaining 50% of the shares on Jan. 17, 2025.

The shares of the company are expected to witness delivery-based demand from institutions upon listing, from mutual funds and foreign investors who would like to add the stock to their renewable power portfolio.

For the first 30-days till the first set of anchor shares are released from lock-in, there could be a liquidity squeeze if retail and non-institutional investors decide to hold on to the shares. But, given the volatile market situation, US Presidential Elections and US Fed Policy meet in the next two weeks, it will be crucial to see whether retail investors take listing gains or hold on to the share.