Shares of Waaree Energies Ltd. jumped nearly 75% early on debut after a $514 million initial public offering by India’s largest solar-panel maker, bringing back optimism for the market after the nation’s biggest IPO disappointed investors last week.
The stock climbed to as high as 2,624.40 rupees in early trading Monday, from its issue price of 1,503 rupees.
Mumbai-based Waaree had seen strong interest for its deal, with the issue getting subscribed by more 70 times. The debut comes on the back of a world-beating rally in India’s renewable-energy stocks this year.
The firm’s gain stands in contrast to Hyundai Motor India’s IPO that culminated in a first-day decline last week. The $3.3 billion IPO, the nation’s largest ever, drew poor interest from retail investors — a break from the frenzy seen in some recent IPOs, particularly smaller issues.
Waaree’s retail portion of the IPO was subscribed nearly 11 times, according to exchange data, underscoring the appetite for new listings in India remains strong. The appeal of India’s renewable sector, where stocks have rallied this year, is also drawing investors.
Waaree sells products such as solar modules and inverters. It posted a profit of more than 4 billion rupees ($47.7 million) on revenue from operations of 34.1 billion rupees for the three months ended June, according to its red-herring prospectus. Its shares attracted investments from prominent Wall Street names, including Goldman Sachs Group Inc., BlackRock Inc., and Morgan Stanley.
The company’s business prospects align with Prime Minister Narendra Modi’s goal to boost renewable-energy production by more than twofold from current levels. The sector may need investments of $2.2 trillion by 2050, according to Bloomberg Intelligence estimates.
Indian IPOs have raised $13.1 billion so far this year, more than the annual volumes in the past two years, according to data compiled by Bloomberg. Listings in the nation this year have on average generated a nearly 27% first-day gain. Among IPOs between $500 million and $1 billion, the gain was about 66%.
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