Waaree Energies IPO: GMP drops before listing; should investors worry?

Waaree Energies listing expectations: With the company set to debut on October 28, Waaree Energies' GMP currently stands around Rs 1,320, reflecting a potential listing premium of 88% over the IPO issue price.

In Short

• Listing set for October 28 amid strong investor confidence
• Long-term investors advised to hold due to growth potential
• Waaree Energies IPO GMP dips slightly ahead of listing

Despite a slight dip in the grey market premium (GMP) ahead of its stock market debut, analysts remain confident about Waaree Energies' long-term potential, advising investors not to worry.

With the company set to debut on October 28, Waaree’s GMP currently stands around Rs 1,320, reflecting a potential listing premium of 88% over the IPO issue price.

Though down from over 100% in earlier sessions--impacted by broader market conditions--the sentiment remains strong, supported by the company’s robust fundamentals and leadership in the solar energy sector.

Waaree Energies saw overwhelming demand during its IPO, with an overall subscription rate of 76 times, driven primarily by institutional investors who subscribed at 208 times.

The retail category saw a healthy 11.27 times subscription. In total, the IPO attracted bids worth Rs 2.41 lakh crore, showing high investor confidence in Waaree's growth trajectory and market position.

As India's largest manufacturer of solar photovoltaic (PV) modules, Waaree Energies currently boasts an installed capacity of 12 GW and is planning further expansions. The company intends to allocate IPO proceeds towards a 6 GW manufacturing facility in Odisha, enhancing production of solar ingots, wafers, cells, and PV modules. A 3 GW facility in the United States is also in the pipeline, underscoring Waaree’s global ambitions and potential for sustained growth.

Shivani Nyati, Head of Wealth at Swastika Investmart, sees the GMP dip as temporary. "Considering Waaree's solid fundamentals and growth in renewable energy, the stock offers a strong return over the issue price. Long-term investors stand to gain considerably from Waaree’s leadership in this space," she said.

Given the company's growth potential, analysts suggest long-term investors hold onto the stock, citing Waaree Energies' expanding footprint in the renewable sector.

“For investors with a short-term view, partial profit-booking on listing day could be a prudent approach, especially if the stock sees a sharp surge,” Nyati noted, though she urged caution around volatile post-listing conditions.

However, investors should be aware of post-listing volatility, with broader market sentiment potentially impacting Waaree's price movements. However, the company’s solid fundamentals, coupled with India’s rising focus on renewable energy, make it a promising addition to investors’ portfolios.

With its listing set for October 28, Waaree is poised to be a key player in India’s renewable energy sector, reinforcing investor optimism for potential long-term gains.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)