Waaree Energies IPO Is Set To Disrupt The Listed Solar Module Industry
The IPO will be a fresh issue of shares worth Rs 3,000 crore and an offer for sale for 32 lakh shares of face value Rs 10 each.
The potential listing of Waaree Energies Ltd., India's largest manufacturer of solar photovoltaic modules, can cause some pressure on listed peers, whose shares have surged 2.11 to 21 times in the past year. The solar module company is likely to list in 2024 after submitting its draft red herring prospectus to SEBI in December for an initial public offering to raise funds.
About The IPO
Waaree Energies' IPO will be a mix of a fresh issue of shares worth Rs 3,000 crore and an offer for sale for 32 lakh shares of face value Rs 10 each.
Promoter Waaree Sustainable Finance Pvt. plans to offload 27 lakh shares in the OFS portion. It holds over 5.73 crore shares or a 21.9% stake in the company. Chandurkar Investments Pvt. will sell 4.5 lakh shares, or its entire 0.17% stake, while Samir Surendra Shah, who holds 0.04% stake, will sell 50,000 shares, according to the DRHP.
Waaree Energies plans to utilise a portion of the IPO proceeds to fund its capital-expenditure needs, including the establishment of a fully integrated 6-gigawatt facility in Odisha. This facility will manufacture ingot wafers, solar cells and modules. The company expects to use around Rs 2,500 crore from the IPO for these projects, to be deployed over the current and the next financial years, according to the DRHP.
Installed Capacity
Founded in 1989 with headquarters in Mumbai, Waaree Energies has an aggregate capacity of 12 GW as of June 20, 2023. The company also has the potential to reach 18 GW by fiscal 2026–27.
In comparison, Adani Solar, subsidiary of Adani Green Energy Ltd, and ReNew Power have the second highest capacity of 4 GW each as of June 2023.
Financial Performance
Waaree Energies has a three-year revenue and net-profit compounded annual growth rate of 86% and 231% respectively.
The company has had significant expansion with respect to its Ebitda margins as well, with margins expanding 750 basis points over fiscal 2021–23.
Waaree Energies' operating income as of fiscal 2023 stood higher than companies like Vikram Solar and Websol Energy System, and comparable to that of Tata Power Solar.
The company posted a 136% year-on-year revenue growth. Its operating margins stand comparable to that of Adani Solar.
Direct Competitor
From a product perspective, Waaree Energies manufactures both mono-crystalline and multicrystalline solar modules.
Out of all the listed players, Websol Energy System is the only company with a similar product portfolio as it manufactures multicrystalline solar modules, according to the Waaree Energies.
Waaree Energies has seen significant growth in its financial performance in the last few years, while Websol Energy System saw a 93% YoY decline in revenue in fiscal 2023.
Websol Energy System's profit has declined since fiscal 2021, leading to the solar module manufacturer posting a net loss of Rs 23.7 crore in fiscal 2023 in comparison to Rs 9.7 crore profit in fiscal 2022.
