India’s leading solar panel manufacturer, Waaree Energies Ltd., has successfully launched a $514 million initial public offering (IPO) that was fully subscribed within hours of its opening. This impressive performance is largely attributed to the remarkable upswing in the country’s renewable energy stocks, which have gained significant traction this year.
At the upper end of its price range, between 1,427 and 1,503 rupees, Waaree Energies is valued at approximately $5 billion. The company’s shares have garnered considerable attention from notable investors, including Goldman Sachs Group Inc., BlackRock Inc., and Morgan Stanley, with trading set to commence next week.
The IPO has attracted robust interest from both retail and affluent investors, evidenced by a multitude of bids for the shares allocated to this group. This heightened demand highlights the current excitement surrounding new public offerings in India, a nation that has become a hotspot for capital market activities in recent months.
The significant backing from well-known Wall Street firms reflects the growing allure of India’s renewable energy sector, where stock prices have surged by up to 357% this year. Notably, six of the top ten performers on Bloomberg’s World Energy Index are Indian companies, with one topping the list.
“Renewables present a substantial opportunity in India over the next three years,” stated Ramesh Mantri, Chief Investment Officer for Equities at WhiteOak Capital Asset Management Ltd.
This IPO aligns with Prime Minister Narendra Modi’s ambitious target to increase renewable energy capacity to 500 gigawatts by the end of the decade, more than doubling current levels. Bloomberg Intelligence estimates that achieving this goal will require investments totaling $2.2 trillion by 2050.
However, challenges remain. The renewable energy sector is grappling with high leverage due to rapid expansion and weak cash flow, according to a Bloomberg Intelligence report. Additionally, the country continues to invest in thermal power projects to satisfy its growing energy demands.
“Given the global shift toward renewable energy, Waaree Energies is strategically positioned to seize the expanding opportunities in this sector,” remarked Shiwani Kumari, an analyst at Monarch Networth Capital, in a recent report.
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