Waaree Energies Limited has received the last nod from the Securities and Exchange Board of India, SEBI to raise funds through an initial public offering. SEBI has formally issued the final nod for doing this IPO yesterday September 20th, 2024.
IPO Details
Waaree Energies will raise approximately ₹3,000 crore through a combination of a fresh issue and an offer for sale (OFS). The face value of every equity share is ₹10, as disclosed by the DRHP filed by the company with SEBI earlier in the year on January 2, 2024. However, till date, the company remained tight-lipped about how much it would raise from the public issue but kept the final figure open for more information to come closer to the offering.
The new money will make up the majority of the funds raised, while the balance will come from existing investors via the OFS. Such a structure is rather very common in IPOs as it helps in raising money to fund new ventures by the company at the same time allowing early investors and promoters to book their stakes.
Table of Contents
Waaree Energies Limited OFS Details
One of the key features of Waaree Energies’ IPO is that it features Offer for Sale (OFS). This means some of the significant shareholders will be selling part of their equity. That are as follows:
Waaree Sustainable Finance Private Limited, an erstwhile Mahavir Thermoequip Private Limited, which also happens to be a promoter of the company, would sell as many as 27 lakh shares.
Chandurkar Investments Private Limited would sell 4.5 lakh shares.
Other Selling Shareholders : Samir Surendra Shah will sell up to 50,000 shares.
The OFS gives these shareholders the opportunity to exit certain levels of holding and allow fresh investors to come and buy stocks for themselves.
Objectives of opting for IPO
Waaree Energies has definite plans for its utilization of the proceeds post its IPO. “We have already acquired 400 acres at Bhadrak; we need another 500 acres of land for our plant and this money will be used to purchase that land,” Punit Saurabh Shah said. The primary reason behind opting for the IPO is to raise funds required for the construction of a large-scale manufacturing plant in Odisha. The company specifically intends to establish a 6 gigawatt (GW) manufacturing facility for Ingot Wafer, Solar Cell, and Solar PV Module. It can be presumed that the factory would form an important constituent of Waaree’s expansion strategy because it would help the company increase its volume of production and respond to the growing demand for solar energy products in different markets.
A part of the proceeds from this IPO will also be used in general corporate purposes, which include but not limited to working capital, balance sheet strengthening and financing other business initiatives not specifically meant for the new manufacturing facility.
About Waaree Energies Company HISTORY
Waaree Energies is a company that has stridden a long way towards developing a reputation in renewable energy, especially in solar power. By June 30, 2023, the company held an aggregate installed capacity of 12 gigawatts (GW), which makes the company one of the largest solar PV module manufacturers in India. This puts the company in an advantageous position as it supplies more solar modules amidst increased demand with the momentum of India’s ambitious renewable energy targets.
As strategic emphasis in upgrading manufacturing capacities considers the abated shift towards renewable energy worldwide, the solar industry is as important in helping provide energy transition in India, and companies like Waaree Energies are positioning themselves to stay ahead in harnessing this momentum.
Key Players in the IPO
Appointed BRLMs for the IPO: Waaree Energies has named a group of financial institutions that have adequate experience as its BRLMs for the IPO. A BRLM is an indispensable part of managing the public issue and ensuring that it reaches the appropriate investors and that the issue is dealt with effectively. The BRLMs appointed for the Waaree Energies IPO are as follows:
Axis Capital Limited
IIFL Securities Limited
Jefferies India Private Limited
Nomura Financial Advisory and Securities (India) Private Limited
SBI Capital Markets Limited
Intensive Fiscal Services Private Limited
ITI Capital Limited
With such stalwarts at the helm, the IPO is sure to attract investments in every nook and corner of both national and international quarters.
Indian Solar Industry
As part of its larger renewable energy goals, India has been aggressively expanding its solar capacity over the last few years. In fact, it aspires to achieve 450 GW of renewable energy capacity by 2030, and quite a large chunk of that will come through the expansion of solar energy. This, therefore, presents a huge growth opportunity for companies like Waaree Energies, which are anyway pretty deep into the solar space.
The key reasons why the government of India has focused more on solar energy are a combination of reductions in carbon emissions, rising energy demands, and dependence on fossil fuels. The Government, over the years, had made an effort to influence the installation of solar power by enforcing a series of policies and incentives, including subsidies and tax benefits and other favored regulations over solar energy firms.
This positive environment has been a fitting ground for growth at Waaree Energies. Increasing the manufacturing capacities with a new facility in Odisha aligns perfectly with the national push for increasing capacity in the country. Scaling up the plant further, Waaree aims at cornering a larger share of quality solar PV modules demand not only in the Indian market but also international markets.
Challenges and Opportunities
Though the India solar industry has a lot of promising growth, there are still challenges for that growth. For example, in the way of solar PV manufacturers coming are fluctuating raw material prices, competition from overseas players, in this case, China, and need for continuous technological improvement so that there can be improvement in efficiency and reduction in cost.
The company has to face these problems as it moves ahead with the IPO and expansion process. However, with the fantastic track record of the company, tied up with the dramatic demand for solar energy, a future basis for growth is complete. It will provide the required capital for expansion besides increasing the credibility of Waaree in the market.
Conclusion
Waaree Energies Limited has filed its draft red herring prospectus with the Securities and Exchange Board of India for a ₹3,000-crore initial public offering. The Fresh issues along with an offer for sale form the ₹3,000-crore IPO. The company’s strategy is a new 6 GW manufacturing facility located in Odisha, with which it can exploit the sufficient demand in India and globally for solar PV modules.
Waaree Energies is among the best-positioned companies to take advantage of the tidal wave of opportunities that the solar energy boom presents if one is to develop the future with cleaner and more sustainable energy solutions. The company boasts of a strong installed capacity of 12 GW and more.
With such seasoned bookrunners backing the IPO, significant attention and investment interest is likely to come along seeking exposure to a very rapidly growing solar sector. How the market reacts to such an exciting opportunity in the renewable energy space will be interesting to see, with final details of the IPO unfolding over the coming weeks.