India's biggest solar panel maker Waaree Energies’ IPO delayed over deemed public offer non-compliance

Waaree Energies had filed its draft IPO papers on December 29, 2023.

Waaree Energies, India's largest solar panel maker, is still awaiting approval from the market regulator for its IPO, eight months after filing its draft share sale papers due to concerns about non-compliance with the Companies Act, which limits unlisted companies from selling shares to more than 200 people without a public offer, people familiar with the development said.

The company filed its draft IPO papers on December 29.

The solar panel maker raised funds in pre-IPO rounds, following which investors sold the company’s shares to others such as high net-worth individuals (HNIs) and family offices, leading to a breach of the 200-investor ceiling, the people said, requesting anonymity.

Waaree raised Rs 1,000 crore in a funding round led by investment firm ValueQuest in August 2023 and in a previous round had raised Rs 1,040 crore from a clutch of investors, including family offices and HNIs.

Moneycontrol previously reported on May 14 that several companies, including Mobikwik, were facing delays in securing SEBI approval for their IPOs due to violation of the deemed public offer norms. Moneycontrol reported that the deemed public issue non-compliance in these cases was not because the company sold its shares to investors but on account of existing investors/shareholders of these companies selling down their shares, which is also the case in the Waaree episode.

Sources added that these companies are not at fault as they themselves had not offered the shares to more than 200 people and they also cannot control what their stakeholders may do with the shares.

According to Waaree Energies' draft share sale documents, the company had 2,673 individual public shareholders holding a 27.68 percent stake in the company. The latest IPO processing status update on the SEBI website shows that the regulator sought some clarifications from the company's bankers on May 21 and is still awaiting a response from the company and its bankers.

“Since it is a non-compliance of the Companies Act, Waaree will have to sort this out with the Registrar of Companies and Ministry of Corporate Affairs (MCA). They may have to pay a penalty for the non-compliance. But the process will take time as it will need approval from the MCA. Thus, the IPO is facing a long delay,” one of the sources said.

An email sent to Waaree Energies did not elicit a response.

India’s biggest solar panel maker

Waaree, which intends to raise Rs 3,000 crore capital through the IPO, will spend the money on part-financing the cost of establishing a 6 gigawatt (GW) of ingot wafer, solar cell and solar photovoltaic module manufacturing facility in Odisha.

The total project cost is over Rs 9,000 crore.

Waaree, the country's largest manufacturer of solar modules, had an installed capacity of 12 GW as on June 30, 2023.

It operates four manufacturing facilities in India spread over an area of 136.30 acres. Its factories are located at Nandigram, Surat, Tumb and Chikhli in Gujarat.

For fiscal 2023, the company reported a revenue of Rs 6,750.87 crore against a revenue of Rs 2,854.26 crore in the previous financial year.

It reported a profit of Rs 500 crore in fiscal 2023, a sharp rise from the profit of Rs 79.6 crore reported in the previous year.