Waaree Energies IPO Breaks Records: What are Your Chances of Allotment After the Historic Surge?

Waaree Energies’ Record-Breaking IPO

Waaree Energies’ Initial Public Offering (IPO) has taken the Indian stock market by storm, surpassing many expectations and setting new benchmarks. The company, one of India’s leading solar photovoltaic (PV) module manufacturers, saw an overwhelming response during the bidding process, garnering bids worth Rs 2.41 lakh crore for a Rs 3,044.51 crore offering. Investors are now keenly awaiting the allotment results, hoping to secure a slice of what could potentially be a high-return investment. In this blog, we’ll take a closer look at Waaree Energies’ IPO performance, the bidding frenzy, and the chances of getting an allotment.

Waaree Energies: A Glimpse into the IPO Numbers

Waaree Energies, which opened its IPO for bidding between October 21 and October 23, 2024, offered shares in the price band of Rs 1,427-1,503 per share, with a minimum lot size of nine shares. The offering was met with resounding success, as it was oversubscribed 76.34 times. While Bajaj Housing Finance previously held the record for the highest number of applications, Waaree Energies has now taken the lead, receiving 97.33 lakh applications at the upper end of the price band, compared to Bajaj’s 89.07 lakh applications.

Despite fetching fewer overall bids in terms of amount, Waaree Energies broke the record for the number of applicants, a testament to the immense interest generated by the company. The key reasons behind this success include Waaree Energies’ strong foothold in the solar energy sector, government policies promoting renewable energy, and the rising demand for solar PV modules in India.

Breaking Down the Subscription Numbers

The IPO saw a varied response across different categories of investors. Here’s a breakdown of the subscription numbers:

• Qualified Institutional Buyers (QIBs): The QIB portion was subscribed 208.64 times, with bids worth Rs 1.83 lakh crore. This overwhelming demand from institutions demonstrates the confidence institutional investors have in Waaree Energies’ business model and growth potential.

• Non-Institutional Investors (NIIs): The non-institutional investors’ portion was subscribed 62.49 times, attracting bids for Rs 41,660 crore. This level of interest is particularly significant, indicating strong demand from high-net-worth individuals and corporate investors.

• Retail Investors: The retail portion was subscribed 10.79 times, with bids worth Rs 16,788 crore. Given the higher odds of allotment in this category, retail investors stand a decent chance of securing shares. In fact, experts suggest that retail investors have the best probability of getting an allotment compared to other categories.

• Employee Bids: The employees of Waaree Energies also showed enthusiasm, with their reserved portion being oversubscribed by 5.17 times, attracting bids worth Rs 354.15 crore.

The combined strong Interest from all investor categories reflects the high level of optimism surrounding Waaree Energies’ future performance and the solar sector’s broader growth prospects.

Allotment Odds: What are Your Chances?

With such an oversubscription, many investors are left wondering about their chances of getting an allotment. Here’s a breakdown of the tentative probabilities for each investor category:

• Big HNI (High Net-Worth Individuals): Investors in this category face stiff competition, with only 1 out of 13 investors likely to receive 135 shares. This translates to a probability of about 7.69%.

• Small HNI: The odds are even slimmer for small HNIs, with 2 out of 95 investors expected to receive 135 shares, giving a probability of just 2.10%.

• Retail Investors: Retail investors, who have the best odds among all categories, stand a 13.33% chance of getting an allotment. Out of every 15 investors, 2 are expected to receive 9 shares.

Given these figures, retail investors have the highest probability of receiving an allotment, though the overall likelihood remains modest due to the high level of oversubscription.

Why the Bumper Response?

Several factors contributed to the bumper response that Waaree Energies received. According to Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, the solid interest from all investor categories is largely due to the increasing appeal of the solar energy sector. The Indian government’s push for renewable energy, coupled with Waaree Energies’ sound business model, has made the IPO particularly attractive to investors looking for long-term gains.

Additionally, the co-founder of Stock Market Today, VLA Ambala, pointed out that Waaree Energies is expected to provide strong listing gains. With the company commanding a grey market premium (GMP) of Rs 1,600, there is a projected listing gain of around 103%. Ambala suggests that investors who secure allotments may witness significant initial profits and could consider partial profit-booking while retaining some shares for long-term returns.

Waaree Energies: A Promising Future in Solar Energy

Waaree Energies has carved a niche for itself in India’s renewable energy landscape, particularly in solar PV modules manufacturing. As the country continues to transition towards cleaner energy, the company’s prospects look bright. The IPO has provided the company with a solid capital base to fuel its growth ambitions, raising Rs 4,321.44 crore through a mix of fresh share sales and an offer for sale (OFS). This capital will be used to expand its production capacity, enhance its market presence, and improve operational efficiency.

Final Thoughts: A Landmark IPO with Promising Returns

Waaree Energies’ record-breaking IPO is a clear indicator of the growing interest in India’s renewable energy sector. The company’s ability to attract such a massive number of applications underscores its appeal to both retail and institutional investors. While the chances of allotment are slim due to oversubscription, those fortunate enough to secure shares could see strong returns, both in the short and long term.

As with any investment, it’s essential to assess your financial goals and risk tolerance before diving in. Given the high demand and positive outlook for Waaree Energies, investors should remain vigilant and consider expert advice for maximizing potential returns.

Disclaimer:

This blog is for informational purposes only and should not be construed as financial advice. Investors are encouraged to consult with a qualified financial advisor before making investment decisions.