Shares of Inox Green Energy Services, the wind power operation and maintenance service provider made a muted market debut today. The stock listed at ₹60 per share vs its issue price of ₹65 per share, a discount of nearly 8 percent on the NSE. Meanwhile, on BSE, it listed at ₹60.5, a discount of 7 percent. The ₹740-crore initial public offering opened for subscription on November 11 and closed on November 15. The company had fixed the IPO price band at ₹61-65 per share.
Its issue got a muted response from investors and was subscribed just 1.55 times. The portion of qualified institutional buyers (QIBs) was subscribed, 1.05 times, while those of non-institutional investors was subscribed only 50 percent and that of retail individual investors (RIIs) was subscribed 4.7 times, the data showed.
The issue consists of a fresh equity sale worth ₹370 crore and an offer for sale of the same amount from its parent company, Inox Wind.
Inox Green is engaged in the business of providing long-term Operation and Maintenance (O&M) services for wind farm projects, specifically for wind turbine generators and common infrastructure facilities on wind farms.
It recorded a compound annual growth rate growth of 4 percent in revenue during FY20-FY22 while EBITDA (earnings before interest, taxes, depreciation and amortisation) dropped to ₹82.2 crore in FY22 from ₹88.3 crore in FY20. The operating profit margin dropped to 47.7 percent in FY22 from 53.4 percent in FY20.
The company narrowed its net loss to ₹5 crore in FY22 from ₹27.7 crore in FY20. For the quarter ended June FY23, the company posted a loss of ₹11.6 crore on revenue of ₹61.8 crore.
The firm collected ₹333 crore from anchor investors. decided to allocate 5.12 crore shares to anchor investors at ₹65 apiece aggregating the transaction size to ₹333 crore. Morgan Stanley Asia (Singapore) Pte, Nomura Singapore Ltd, Citigroup Global Markets Mauritius Private Limited, HDFC Mutual Fund (MF), ICICI Prudential MF, Aditya Birla Sun Life MF are among the anchor investors.
While some brokerage firms were positive on the issue and have suggested subscribing to it on the back of a favourable national policy support, a strong and diverse portfolio, and visibility for future growth, however, some were cautious due to expensive valuations.
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 the renewable sector. It had a subscribe rating.