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Waaree Energies IPO

ICICIdirect Research 18 Oct 2024 DISCLAIMER

The company is the India’s largest manufacturer of solar PV modules with an aggregate installed capacity of 13.3 GW (12 GW in Gujarat and 1.3 GW in Noida). Company commands a market share of ~21% in domestic solar module market and ~40% share in the country’s solar module exports

Company reported revenue of Rs 11371 crore in FY24, of which 58% was from export markets (mainly US).
Company is raising Rs 4321 crore (Rs 3600 crore through fresh issue and Rs 721 crore through OFS). Price band is at 1427-1503. The IPO is opening on Monday 21st Oct and closing on Wednesday 23rd Oct

The raised capital will be used to part financing the 6 GW integrated facility at Orrisa (including ingots, wafer, solar cells & PV modules), which is expected to be commissioned by FY27E

Apart from this, company is setting up a solar cell manufacturing capacity of 5.4 GW (at Gujarat) and a solar module capacity of 1.6 GW (in US). Both these capacities are expected to be commissioned in FY25E. Post all the expansion plan, company’s total Solar PV module capacity will increase to 20.9 GW by FY27E. At present, company’s order book stands at ~17 GW

Company’s revenue has increased significantly by 4x over the last 2 years, while EBITDA and PAT have grown by 14x and 16x over the same period as the EBITDA margins have improved to 13.8% in FY24 (vs 4% in FY22)
Backward integration with manufacturing of ingots, wafers & solar cells, company’s operational performance is expected to improve further

At the upper band price of Rs 1503, company’s P/E comes at ~35x on FY24 PAT, which looks relatively attractive as compared to recently listed Premier Energies (trading at 212x on FY24). So, considering the company’s robust expansion plans and strong industry tailwinds, we recommend subscribe for the issue. Latest GMP is at Rs 1230 (80% of upper band price)

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