Mehta Equities has adviced investors to "SUBSCRIBE" to Inox Wind IPO as a long term investment for 1-2 years, in its research report dated March 15, 2015.
Inox Wind IPO review by Mehta Equities
Inox Wind (IWL) is promoted by Gujarat Fluorochemicals and a part of Inox Group. Inox Wind is a fully integrated player in the wind energy market with state-of-the-art manufacturing plants for blades & tubular towers and for hubs & nacelles. It manufactures key components that ensure high quality, most advanced technology, reliability and cost competitiveness. Inox WTGs are designed for low wind speed sites of India, and are generating around 6% – 18% more generation viz-a-viz other WTGs models available across the nation. Gujarat Fluorochemicals Ltd (GFL) holds 75% of the pre-issue Equity Capital of the Company.
Healthy order book: IWL currently has order book of around 1,258MW (55% EPC orders and 45% supply of WTGs). Out of the 1,258MW, capacity of around 122MW has already been erected and commissioned. Given the government initiative to focus more on wind power with supportive incentives, we believe there could be a strong demand for WTGs in future. IWL intends to use part of the IPO proceeds to invest in new equipment at the Una unit to optimize the capacity of the nacelle and hub manufacturing facility.
"We believe that IWL is well placed to knock the industry demand as government initiates to focus more on renewable power sector. We see favorable macro environment scenario, the strong order book position and expanding capacity through the issue, the company is expected to deliver healthy returns growth ahead. On valuation parse the IPO price at the higher band it is inline with global players valuations and is justified, hence we advice investors to "SUBSCRIBE" the Issue as a long term investment for 1-2 years", says Mehta Equities research report.
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