Waaree Energies Limited IPO Review | CA Rachana Ranade

Summary

Wari Energy, a leading solar module manufacturer in India, has a robust installed capacity of 12 GW, with plans to expand due to rising electricity demand. The company benefits from favorable government policies and an increasing per capita consumption of electricity, projected to reach 1,600-1,650 kWh by 2029. Despite risks associated with regulatory compliance and dependence on Chinese imports for raw materials, Wari’s financials show significant growth. The upcoming IPO aims to raise funds for expanding capacity by 6 GW to meet a 20 GW order book. This positions Wari Energy as a compelling investment opportunity in the renewable energy sector.

Takeaways

• 😀 Wari Energy manufactures solar modules, contributing to sustainable energy solutions.
• 🌱 Solar panels are a cost-effective way to reduce carbon emissions and lower energy bills.
• 📈 Wari Energy has India's largest installed capacity of solar modules at 12 GW as of June 30.
• 🏭 The company operates five manufacturing facilities in Gujarat and one in Uttar Pradesh.
• 💰 Since listing, Wari Energy's subsidiary has generated impressive returns of 61,500%.
• ⚡ India's per capita electricity consumption is expected to grow significantly, increasing demand for solar energy.
• 🌍 The government aims to double its renewable power capacity from 2022 to 2027, with solar accounting for 75% of this growth.
• 🚫 Import restrictions on Chinese solar modules have led to increased exports from India.
• 📊 Wari Energy has a strong financial outlook with increasing revenues, EBITDA margins, and PAT margins.
• ⚠️ A key risk for Wari Energy includes dependence on imported raw materials from China, which could impact operations.

Q & A

What is Wari Energy's primary business?

Wari Energy primarily manufactures solar modules, which are used to harness solar energy for residential and commercial purposes.

How does using solar panels benefit homeowners?

Using solar panels helps reduce carbon emissions and provides a cost-effective, sustainable way to power homes.

What is Wari Energy's installed capacity as of June 30?

As of June 30, Wari Energy has the largest installed solar capacity in India, totaling 12 gigawatts (GW).

What are Wari Energy's manufacturing locations?

Wari Energy has manufacturing facilities in Gujarat and one in Uttar Pradesh, totaling five plants.

What is the expected growth in per capita electricity consumption in India?

The per capita electricity consumption in India is expected to increase from 1,331 kWh to between 1,600 and 1,650 kWh by 2029.

What percentage of India's renewable power capacity growth will come from solar energy?

Solar energy is expected to account for 75% of the growth in India's renewable power capacity from 2022 to 2027.

What is the financial performance trend for Wari Energy?

Wari Energy's financials are improving, with increasing revenues, EBITDA margins rising from 6.88% to 15.56%, and a growing profit after tax (PAT) margin.

What risks does Wari Energy face regarding its supply chain?

Wari Energy relies on imports for 54% of its raw materials, primarily from China, which poses risks related to geopolitical tensions that could disrupt supply.

What plans does Wari Energy have regarding its IPO funds?

Wari Energy plans to use the IPO funds to set up a new plant, which will increase its capacity by an additional 6 GW to meet its existing order backlog.

How does Wari Energy's price-to-earnings (PE) ratio compare to its competitors?

Wari Energy's PE ratio is significantly lower than that of its competitors, indicating a potentially attractive investment opportunity.