Waaree Energies, India’s largest solar panel manufacturer, is facing delays in launching its much-anticipated Waaree IPO due to regulatory hurdles. Despite filing its draft papers for an initial public offering (IPO) on December 29, 2022, the company is still waiting for approval from the Securities and Exchange Board of India (SEBI) eight months later.
The delay stems from concerns over a deemed public offer non-compliance with the Companies Act, which restricts unlisted companies from selling shares to more than 200 individuals without a formal public offer.
Waaree IPO Faces Delays Due to Non-Compliance Issues
What Led to the Delay in the Waaree IPO?
Waaree Energies raised funds through pre-IPO rounds, where investors later sold shares to other entities, such as high-net-worth individuals (HNIs) and family offices. This secondary market activity caused the company to exceed the 200-investor limit, which violates the Companies Act, according to sources familiar with the situation. Although the company did not directly sell shares to more than 200 people, it cannot control the subsequent sales by its investors.
The draft IPO papers revealed that Waaree Energies had 2,673 individual public shareholders holding a 27.68% stake. This situation triggered regulatory scrutiny, and as of the latest update on SEBI’s website, the market regulator has requested clarifications from the company’s bankers. As of now, both the company and its bankers are yet to respond.
Potential Penalties and Next Steps for the Waaree IPO
Waaree Energies must coordinate with the Registrar of Companies and the Ministry of Corporate Affairs (MCA) to address this issue. The company may face penalties for this non-compliance, but the resolution process is expected to take time, further delaying the IPO. Until these issues are sorted out, the Waaree IPO cannot proceed.
Waaree’s Growth and Future Plans
Despite these regulatory setbacks, Waaree Energies continues to dominate India’s solar manufacturing industry. The company plans to raise Rs 3,000 crore through its IPO to partly fund the establishment of a 6 GW manufacturing facility for ingot wafers, solar cells, and solar photovoltaic modules in Odisha. The total cost of this ambitious project exceeds Rs 9,000 crore.
Waaree currently has an installed capacity of 12 GW as of June 30, 2023, and operates four manufacturing facilities across Gujarat, located in Nandigram, Surat, Tumb, and Chikhli. The company reported impressive growth in fiscal 2023, with revenue jumping to Rs 6,750.87 crore from Rs 2,854.26 crore in the previous year, and profits surging to Rs 500 crore, a significant increase from the previous year’s Rs 79.6 crore.
What’s Next for Investors Awaiting the Waaree IPO?
While the Waaree IPO is facing delays due to compliance issues, the company’s strong financial performance and expansion plans highlight its potential as a key player in India’s growing renewable energy sector. Investors should keep an eye on the regulatory developments, as resolving these hurdles will pave the way for the IPO launch.
Stay tuned for updates on the Waaree IPO as the company navigates through the compliance process and gears up for its next big step in the solar energy market.
FAQs
1. What is Waaree Energies and why is it going public?
Waaree Energies is a prominent solar energy company in India. It manufactures solar PV panels and offers various energy solutions. The company is going public through an IPO to raise funds for business expansion, repay debt, and invest in technology and R&D. Going public also helps increase visibility and trust in the brand, attracting more investors.
2. What is the expected date for the Waaree IPO?
The exact date for the Waaree IPO 2024 is yet to be confirmed. However, it is expected to be launched in early 2024, subject to regulatory approvals and market conditions. Keep an eye on official announcements for more accurate timing.
3. What is the size of the Waaree IPO?
The estimated size of Waaree’s IPO is expected to be around ₹1,000 to ₹1,500 crore, depending on the market valuation and demand. This will include both fresh issues of shares and an offer for sale (OFS) by existing stakeholders.
4. What will the Waaree IPO funds be used for?
The proceeds from the IPO are expected to be utilized for:
• Expansion of manufacturing capacity: Waaree plans to increase its solar panel production to meet rising demand.
• Research & Development: Investment in new solar technologies and innovation to maintain competitive advantage.
• Repayment of Debt: To reduce the company’s financial liabilities and strengthen its balance sheet.
• Working Capital: To support the company’s ongoing business operations and growth.
5. What are Waaree’s future business plans?
Waaree Energies aims to:
• Expand its global footprint in solar energy solutions.
• Invest heavily in increasing solar PV module production capacity, aiming to become one of the largest solar manufacturers in India.
• Focus on backward integration to control costs and enhance profitability.
• Enter newer renewable energy verticals like solar rooftop solutions and solar water heaters.
• Strengthen its EPC (Engineering, Procurement, and Construction) business to build large-scale solar projects across India and globally.
