Inox Green Energy, whose initial public offer (IPO) was sold from November 11 to November 15, will make its market debut on Wednesday. The listing ceremony for the wind power operation and maintenance service provider will take place at BSE. If one goes by what the grey market premium (GMP) suggests, a muted listing for the stock is all likely.
The issue, which was commanding a thin GMP during its IPO bidding process, was last traded at a discount of Rs 1-2 per share, hinting at flattish market debut over the issue price of Rs 65.
Inox Green Energy Services is engaged in providing long-term O&M services for wind farm projects, specifically O&M services for wind turbine generators (WTGs). The company offers exclusive O&M services for all WTGs sold by Inox Wind through the entry of long-term O&M contracts between the WTG purchaser and terms that typically range between 5 to 20 years.
The IPO by the loss-making company was subscribed 1.55 times, largely due to bidding by retail (4.7 times) and qualified institutional buyers (1.05 times). The quota reserved for non-institutional investors went undersubscribed at 47 per cent.
Brokerages such as KR Choksey Shares & Securities, Arihant Capital Markets, Hem Securities and Ventura Securities had ‘subscribe’ ratings on the issue.
Analysts noted that a strong and diverse portfolio, favourable national policy support, visibility for future growth, support of long-term O&M contracts and backing by parent company Inox Wind were the key positives for Inox Green, but the IPO valuation was pricey based on the prevailing financial position.
There is no listed peer for Inox Green Energy. Among global players are Siemens Gamesa's (EV/Ebitda multiple of 35.2 times) and Vestas Wind (18.7 times EV/EBITDA for 2021).
KR Choksey in its report said it was cautious on the company's order book, as most of its contract is from its parent, IWL. But it was optimistic on the company's prospects, considering the consistent track record of the company, strong parentage and government initiatives to push renewable sector.
It expected financials of the company to improve with reducing debt on the books.
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