This solar PV manufacturer could illuminate the primary market; can it double your investment?
In this analysis, we take a closer look at Waaree Energies Ltd and present you with the exclusive IPO details.
About the issue
Waaree Energies Ltd is preparing to launch its Initial Public Offering (IPO) for equity shares. Below are the issue details.
| IPO Details |
| IPO Opening Date |
October 21, 2024 |
| IPO Closing Date |
October 23, 2024 |
| Issue Type |
Book Built Issue IPO |
| Face Value |
Rs 10 per equity share |
| IPO Price |
Rs 1,427 to Rs 1,503 per equity share |
| Min Order Quantity |
9 shares |
| Listing At |
BSE, NSE |
| Total Issue |
28,752,095 shares of FV Rs 10* |
| (Aggregating up to Rs 4,321.44 Cr)* |
| Fresh Issue |
23,952,095 shares of FV Rs 10* |
| (Aggregating up to Rs 3,600.00 Cr)* |
| Offer for Sale |
4,800,000 shares of FV Rs 10* |
| (Aggregating up to Rs 721.44 Cr)* |
| QIB Shares Offered |
50% of the Offer |
| Retail Shares Offered |
35% of the Offer |
| NII (HNI) Shares Offered |
15% of the Offer |
| *At Upper Price Band |
|
Objects of the Issue
The offer encompasses both the fresh issue and the offer for sale. It's important to note that the company will not accrue any proceeds from the offer for sale. The company plans to allocate the net proceeds raised from the fresh issue for the following purposes:
1. Part finance the cost of establishing the 6GW of Ingot Wafer, Solar Cell and Solar PV Module manufacturing facility in Odisha, India.
2. General corporate purposes.
Promoter holding
Hitesh Chimanlal Doshi, Viren Chimanlal Doshi, Pankaj Chimanlal Doshi and Waaree Sustainable Finance Private Limited are the promoters of the company. The promoters and promoter group currently hold a pre-issue shareholding stake of 71.80 per cent in the company.
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Company profile
The company began operations in 2007 with a focus on manufacturing solar PV modules, aiming to deliver high-quality, cost-effective, and sustainable energy solutions across various markets. Its aim to reduce the carbon footprint supports the transition to renewable energy, ultimately enhancing the quality of life.
According to the CRISIL Report, the company is currently the largest solar PV module manufacturer in India, boasting the largest aggregate installed capacity of 12 GW as of June 30, 2024. In Fiscal 2024, it achieved the second-highest operating income among all domestic solar PV module manufacturers in the country.
Its diverse portfolio of solar energy products includes a range of PV modules, such as (i) multi-crystalline modules, (ii) monocrystalline modules, and (iii) TopCon modules. These offerings also feature flexible solutions like bifacial modules (Mono PERC), available in both framed and unframed versions, as well as building-integrated photovoltaic (BIPV) modules.
The company operates five manufacturing facilities across India, covering a total area of 143.01 acres. These factories are strategically located in Surat, Tumb, Nandigram, and Chikhli in Gujarat, and the IndoSolar Facility in Noida, Uttar Pradesh.
Its sales channels encompass (i) direct sales to utilities and enterprises, (ii) export sales, catering to international customers, and (iii) retail sales, which focus on rooftop and MSME verticals through an extensive franchisee network.
As of June 30, 2024, the company’s substantial order book for solar PV modules stood at 16.6 GW. This includes domestic, export, and franchisee orders, alongside 3.75 GW of orders for its subsidiary, Waaree Solar Americas Inc., based in the United States.
Financials
| Rs (in crore) |
FY22 |
FY23 |
FY24 |
Q1FY25 |
| Revenue |
2,946 |
6,860 |
11,633 |
3,496 |
| Profit before tax |
118 |
677 |
1,734 |
531 |
| Net profit |
80 |
500 |
1,274 |
401 |
The company has consistently delivered robust growth in both revenue and profits over the past few years. Between FY22 and FY24, the company recorded a Compound Annual Growth Rate (CAGR) of around 100 per cent in revenue and 300 per cent in net profit. When annualized, the figures from the June quarter indicate a 20 per cent revenue growth and a 26 per cent surge in net profit compared to FY24. The company achieved an impressive 30 per cent return on equity (RoE) and a 26 per cent return on capital employed (RoCE) for FY24.
Valuation & Outlook
| Company Name |
P/E |
P/B |
RoE (%)* |
| Waaree Energies Ltd |
25 |
9 |
30 |
| Listed Peers |
| Websol Energy System Ltd |
- |
39 |
- |
| Premier Energies Ltd |
213 |
14 |
43 |
*RoE: Based on FY24 data
The issue is priced with a P/BV ratio of 8.84 times, calculated using its Net Asset Value (NAV) of Rs 169.94 as of June 30, 2024. When we calculate the PE ratio for the company by considering the annualized FY25 earnings relative to the fully diluted paid-up equity capital, the resulting PE ratio stands at 25.
The company has significantly outperformed its listed peers by delivering superior performance in both valuation and returns.
The company has fully leveraged the opportunities presented by the government's strong focus on renewable energy and related initiatives, as evidenced by its robust topline and bottom-line growth. Given its current market share, strong order book, and future prospects, we recommend subscribing to the issue with a long-term investment horizon, recognizing its substantial growth potential.