Inox Green Energy likely to make forgettable market debut today. Here’s why

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Inox Green Energy, whose initial public offer (IPO) ran from November 11 to November 15, will get listed on BSE and NSE today.

Going by gray market trends, this would be a forgettable listing. The listing ceremony for the wind power operation and maintenance service provider is about to take place at BSE.

The issue, which was commanding a GMP of Rs 8-10 during its IPO bidding process, may see flat listing, as the current discount is Rs 1 per share. The issue price has been kept at Rs 65.

Inox Green Energy Services is a provider of long term O&M services for wind farm projects, especially O&M services for Wind Turbine Generator (WTG). The company provides O&M services for all WTGs sold by Inox Wind through the entry of long-term O&M contracts between the WTG buyer and terms generally ranging between 5 to 20 years.

The loss-making company’s IPO was subscribed 1.55 times with the help of retail (4.7 times) and qualified institutional buyers (1.05 times). The quota reserved for non-institutional investors was under-subscribed by 47 per cent.

Brokerages such as Arihant Capital Markets, Ventura Securities, Hem Securities and KR Choksi Shares & Securities have ‘Subscribe’ rating on the issue.

Favorable national policy support, a strong and diversified portfolio, backed by parent company Inox Wind, visibility for future growth and long-term O&M contracts were seen as major positives for Inox Green Energy. That said, the valuation of the IPO was a bit pricey based on the financial numbers.

There is no Peers listed for INOX Green Energy. Global players include Siemens Gamesa (EV/Ebitda multiple of 35.2 times) and Vestas Wind (EV/Ebitda multiple of 18.7 times for 2021).

KR Choksi in his report said that he is being cautious about the company’s order book as most of its contracts are with its parent company IWL. But it was optimistic on the company’s prospects, given the company’s consistent track record, strong parentage and government initiatives to push the renewables sector.

It expected that the financial position of the company would improve with the reduction of debt on the books.

Read also: Hindustan Zinc, the Ramesh Damani portfolio stock to go ex-dividend; Mindtree will convert into pre-amalgamation

Read also: Inox Green Energy could make a forgettable market debut today. why here

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