Waaree Energies IPO GMP Skyrockets: 100% listing gain on the cards?

Shares of Waaree Energies are expected to make their debut on the bourse on Monday, October 28, 2024. Here's what the Grey Market Premium (GMP) hints at for the likely listing gains

Waaree Energies' unlisted shares maintain a robust premium in the grey market, sustaining investor enthusiasm following the conclusion of its initial public offering (IPO) bidding process. As the company prepares for its market debut on Monday, October 28, 2024, investors' eye listing performance.  Sources tracking the grey market activities reveal that Waaree Energies' unlisted shares were trading at a premium of Rs 1,500, which translates to a grey market premium (GMP) of 99.8 per cent against the IPO allotment price of Rs 1,503. Should the GMP trend sustain, Waaree Energies' shares may list on the exchanges at around Rs 3,003 (IPO GMP + Issue Price), nearly doubling the wealth of investors who were allotted the company's shares. 

 

Shivani Nyati, Head of Wealth at Swastika Investmart, expects a strong listing for Waaree Energies, supported by its impressive grey market premium. Based on GMP trends, Nyati believes the stock is likely to list around Rs 3,063, reflecting a significant gain of Rs 1,560 over the issue price of Rs 1,503. The IPO also received robust demand, with an overall subscription of 79.44 times, indicating strong investor interest.  Also Read: Shapoorji Pallonji Group's Afcons Infra IPO opens today: Should you apply?

 

"Given the company's strong fundamentals, leadership in the solar energy sector, and overwhelming subscription numbers, the expected listing price seems justified," said Nyati. "However, investors should be mindful of market conditions post-listing, which can influence short-term price movements."

 

For those who receive an allotment, Nyati suggested holding the stock for the long term as a good strategy, considering Waaree Energies' growth potential in the renewable energy space. "However, investors with a short-term view may consider booking partial profits on listing day, especially if the stock sees a significant surge," added Nyati.  Meanwhile, Prashanth Tapse, senior VP (Research), Mehta Equities, said, "Despite markets selloff, Waaree Energies received strongest subscription response from all sets of investors mainly driven by the QIB who bid for whopping 215x times the offer followed by 65x and Retail Investors.   Tapse believes investor demand was fueled by reasonable valuations, sector demand, and the opportunity to invest in India's largest solar PV module manufacturer, bolstered by favorable government policies and the Production-Linked Incentive (PLI) scheme. Waaree's deep market penetration, consistent capacity expansion, backward integration into solar cell manufacturing, and leadership in the solar PV module space position it to capture increasing demand both domestically and internationally.  

Considering the strong subscription demand and sector importance, Tapse believes there is a high possibility of a blockbuster market debut, potentially doubling allotted investors' money on the first day of listing, justifying the demand.

 

"For allotted investors, we recommend booking profits, as we believe post-listing valuations may overshoot, discounting medium-term business growth visibility," Tapse added.

 

Waaree Energies is a leading green energy player in the Indian market. The company specialises in the manufacturing of solar photovoltaic (PV) modules, boasting a total installed capacity of 12 gigawatts (GW).

 

Waaree Energies' IPO was a book-built issue of Rs 4,321.44 crore, comprising a fresh issue of 23,952,095 shares and an offer for sale of 4,800,000 shares with a face value of Rs 10 apiece. Available at a price band of Rs 1,865-1,960 with a lot size of 7 shares, Waaree Energies' IPO received unprecedented demand from investors, with bids for 1,609,170,633 shares against 21,079,384 shares offered, thus getting oversubscribed 76.34 times by the last date of subscription, according to BSE data. This was led by Qualified Institutional Buyers (QIBs), who placed bids 208.63 times the allocated shares, followed by Non-Institutional Investors (NIIs) at 62.49 times, and retail investors at 10.79 times by the last day of subscription.

 

Waaree Energies proposes to utilise the net proceeds from the fresh issue to partly finance the cost of establishing a 6 GW ingot wafer, solar cell, and solar PV module manufacturing facility in Odisha, India, by investing in its wholly-owned subsidiary, Sangam Solar One. The remaining amount will be used for general corporate purposes.