Waree Energies IPO price

Waree Energies Sets IPO Price Band at Rs 1,427-1,503: A 45% Discount to Unlisted Price

1. Overview of Waree Energies IPO

Waree Energies Ltd, a solar panel manufacturing company, has set its price band for its upcoming Initial Public Offering (IPO) at ₹1,427-1,503 per share. This price band represents a 45% discount compared to the company’s unlisted market price, which was trading at ₹2,700-2,750 per share prior to the IPO announcement.

2. Rise in Unlisted Price

The company’s unlisted price surged dramatically over the past year, from approximately ₹800 per share in August 2023 to ₹2,750 per share in September 2024, marking a 300% gain. This sharp rise in the unlisted price was largely driven by investor expectations of Waree Energies’ listing on stock exchanges, which boosted demand in the unlisted market.

3. Grey Market Premium

Interestingly, Waree Energies’ IPO is also witnessing a high grey market premium. The stock is currently trading at a premium of ₹1,280 in the grey market, which is about 85% higher than its price band of ₹1,427-1,503. This indicates strong investor interest and a bullish sentiment toward the company’s market debut.

4. Comparison with Other IPOs

Waree Energies is not the first company to set a price band that is significantly lower than its unlisted price. A few examples include:

• AGS Transact: IPO price band set at ₹185-195 per share, while unlisted shares were trading at ₹550 before the listing.
• UTI Asset Management Co Ltd: IPO price band set at ₹552-554 per share, while the unlisted price was ₹1,100.
• PB Fintech (Paisabazaar): IPO price band was ₹940-980, while unlisted shares traded at ₹1,900 before the IPO.
• Tata Technologies: IPO price band of ₹475-500, a 47.4% discount from the unlisted price of ₹950.

5. IPO Details

• IPO Subscription: October 21-23, 2024.
• Anchor Bidding: Begins on October 18.
• Allotment Date: October 24.
• Refunds/Share Credits: October 25.
• Market Debut: Scheduled for October 28.

The IPO will consist of:

• A fresh issue worth ₹3,600 crore.
• An offer for sale (OFS) of up to 4.8 million shares from existing shareholders and promoters.

The total issue size, based on the upper price band of ₹1,503, will be around ₹4,321 crore. Upon completion, the company’s market capitalization will be approximately ₹43,000 crore.

6. Lead Managers

The IPO is being managed by Axis Capital, IIFL Securities, Jefferies India, Nomura Financial Advisory and Securities, SBI Capital Markets, Intensive Fiscal Services, and ITI Capital.

Advantages and Disadvantages

Advantages:

1. Lower Price Band: The IPO price band set at ₹1,427-1,503 offers a 45% discount compared to the unlisted price, which could attract retail and institutional investors.
2. Strong Investor Interest: The high grey market premium (₹1,280) indicates strong demand for the stock, suggesting the potential for a successful listing and post-IPO performance.
3. Significant Market Capitalization: With a market cap of ₹43,000 crore post-IPO, Waree Energies is positioned to become a prominent player in the renewable energy sector.
4. Sector Growth: As a solar energy company, Waree Energies operates in a rapidly growing sector, where government policies and global focus on sustainability provide a long-term growth outlook.

Disadvantages:

1. Price Discount Concerns: The 45% discount between the IPO price band and unlisted price may raise concerns among existing shareholders who invested at higher prices in the unlisted market.
2. Volatile Grey Market Premium: While the grey market premium is high, such premiums can be volatile and may not always translate into strong listing gains. Investor sentiment can change rapidly based on market conditions.
3. Sector-Specific Risks: The renewable energy sector is highly competitive and subject to regulatory risks. Any adverse changes in government policies or subsidies for renewable energy could impact the company’s profitability.

Conclusion

Waree Energies’ IPO price band at ₹1,427-1,503 per share offers a compelling opportunity for investors, especially given the 45% discount compared to its unlisted price. The high grey market premium signals strong demand ahead of the company’s listing. However, investors should consider the risks associated with the price discount and the competitive nature of the renewable energy sector. With a market capitalization of ₹43,000 crore post-IPO, Waree Energies is well-positioned to capitalize on the growing demand for solar energy, making it a potential long-term investment.

FAQs

1. Why is Waree Energies offering its IPO at a 45% discount to the unlisted price?

1. • The company has set the price band at a discount to the unlisted price to attract broader participation and ensure successful subscription. This pricing strategy is common in IPOs to provide value to public market investors.

2. What is the grey market premium for Waree Energies’ IPO?

1. • As of now, the grey market premium for Waree Energies is around ₹1,280, which is 85% higher than the upper price band of ₹1,503. This suggests strong investor demand ahead of the IPO.

3. What is the size of Waree Energies’ IPO?

1. • The total IPO size will be approximately ₹4,321 crore, comprising a fresh issue of ₹3,600 crore and an offer for sale of up to 4.8 million shares by existing shareholders and promoters.

4. When will Waree Energies debut on the stock market?

1. • Waree Energies is scheduled to make its market debut on October 28, 2024.

5. How does Waree Energies’ IPO compare with other recent IPOs?

1. • Similar to other IPOs like AGS Transact, UTI AMC, PB Fintech, and Tata Technologies, Waree Energies’ IPO price band is lower than the unlisted price. This strategy is aimed at providing value to public market investors while ensuring successful subscription.

Waree Energies IPO price

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