Waaree Energies shares list at 66% premium; Deepak Builders makes tepid start

The Indian equity market saw two companies making debut on stock exchanges today after receiving strong response for their initial public offering (IPOs). Solar panel manufacturer Waaree Energies made a solid debut on the domestic bourses, while construction firm Deepak Builders and Engineers kicked-off trading at subdued start, which was in sharp contrast to Street expectations. Waaree Energies shares listed at ₹2,500, a premium of 66.3% over the issue price of ₹1,503 on the NSE, while shares of Deepak Builders debuted at ₹200, down 1.5% over the IPO price of ₹203 apiece.

On the BSE, Waaree Energies shares opened 69.6% higher at ₹2,550, whereas Deepak Builders kicked-off trading at ₹198.50, a discount of 2.2% over the issue price.

Post listing, the share price of Waaree Energies gained as much as 74.6% to
₹2,624.40, while the market capitalisation (m-cap) crossed ₹70,000 crore. On the other hand, Deepak Builders shares declined as much as 15.7% to hit a low of ₹171, with the m-cap slipping to ₹800 crore. Meanwhile, the equity benchmark Sensex and Nifty were trading up by 0.5% at the time of reporting.

Ahead of listing, shares of Waaree Energies were commanding a grey market premium (GMP) of ₹1,275 in the unlisted market, indicating listing to be around ₹2,778, up 84.83% over the issue price. Last week, the GMP of Waaree Energies shares had touched a high of ₹1,560 on October 23.

Meanwhile, Deepak Builders shares were trading at a GMP of ₹32 in the grey market, signaling listing price at ₹235, up 15.76% over IPO price. The GMP price of the stock has nearly halved from its peak of ₹61 on October 22.

The IPOs of Waaree Energies and Deepak Builders and Engineers, which opened for subscription between October 21-23, received an overwhelming response for their public offerings. Waaree Energies’ issue was subscribed 79.5 times, while the public offer of Deepak Builders was booked around 41.5 times.

The ₹4,321 crore issue of Waaree Energies was subscribed 11.26 times in the retail category and 65.25 times in the NII space. The QIB portion was booked 215.03 times.

In a similar trend, the ₹260 crore IPO of Deepak Builders and Engineers was booked 39.74 times in the retail category, 82.46 times in the NII segment, and 13.91 times in QIB space.

Waaree Energies has raised ₹3,600 crore out of ₹4,321 crore by issuing fresh equities, and the offer for sale part is ₹721.44 crore, around 17% of the total issue size. As per the DRHP filed with SEBI, the company intends to use capital raised from fresh equities to finance the cost of establishing the 6GW of Ingot Wafer, Solar Cell and Solar PV Module manufacturing facility in Odisha. A part of the fund will be used for general corporate purposes. Incorporated in December 1990, Waaree Energies is a manufacturer of solar PV modules with an aggregate installed capacity of 12 GW.

Meanwhile, the issue of Deepak Builders was a combination of fresh issue of shares worth ₹217.21 crore and offer for sale of shares worth ₹42.83 crore. The company proposes to utilise the net proceeds from the fresh issue for repayment of certain borrowings availed by the company; and funding its working capital requirements. It will also use a part of the fund to meet general corporate purposes.

Formed in September 2017, Deepak Builders is a construction company specialising in administrative, institutional, and industrial buildings, hospitals, stadiums, residential complexes, and other construction activities.

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