Inox Green Energy IPO Review
About Inox Green Energy Services Limited
Incorporated in 2012, Inox Green Energy Services Limited is one of the major wind power operation and maintenance (“O&M”) service providers within India. The company is a subsidiary of Inox Wind Limited (“IWL”), a company that is listed on the National Stock Exchange of India Limited and BSE Limited, and part of the Inox GFL group of companies.
The company is engaged in providing long-term O&M services for wind turbine generators (WTG) and the common infrastructure facilities on the wind farm. As a result, it enjoys the benefits of synergies with its parent company IWL, which is principally a manufacturer of wind turbine generators (WTGs) and provides turnkey solutions including the supply of WTGs and other services related to setting up a wind power project.
Inox Wind has a 93.84% stake in Inox Green Energy. But on Oct 10th Inox Wind has sold its entire equity stake in three special-purpose vehicles of Inox Green Energy Services to Adani Green Energy.
As of June 30, 2022, the company’s O&M services portfolio consisted of an aggregate of 2792 MW of wind farm capacity and 1396 WTGs. Of the 2792 MW capacity, 1964 MW was attributable to the company’s contracts for comprehensive O&M services and 828 MW was attributable to its common infrastructure O&M contracts.
According to the International Energy Agency (IEA), India is the third-largest energy-consuming country in the world and has become one of the largest sources of energy demand growth globally.
The company has a presence in Gujarat, Rajasthan, Maharashtra, Madhya Pradesh, Karnataka, Andhra Pradesh, Kerela, and Tamil Nadu.
Inox Green Energy IPO Details: Price, Date, and Size
The company is looking to raise up to Rs 740.00 crore through the public issue.
- Inox Green Energy Services IPO Date: 11 November – 15 November 2022
- The tentative date for share allotment is 18th November 2022.
- Inox Green Energy Services IPO Price band: Rs 61 – Rs 65
- Inox Green Energy Services IPO Issue Size: Rs 740 crore (Fresh Issue of Equity shares aggregating up to Rs 370 crore and remaining OFS)
- Reservation: QIB 75%, Retail – 10%, NII 15%
- Post Issue Implied Market Cap: Rs 1804 – 1898 crore
- Bid lot: 230 shares, and in multiples of 230 shares
- A retail-individual investor can apply for up to 13 lots (2990 shares or ₹194,350).
- Minimum Investment: Rs 14,950
- Inox Green Energy Services mobilizes Rs 333 crore from anchor investors ahead of IPO
- Listing as BSE and NSE
Inox Green Energy IPO: Listed Peers
There are no listed companies in India that are comparable in all aspects of business and services that Inox Green Energy provides.
However, several other WTG OEMs provide O&M services for the WTGs that they manufacture based on contracts for annual maintenance. Their primary competitors in this category are Siemens Gamesa Renewable Energy, S.A., Enercon GmbH, GE, and Vestas India.
Strengths of Inox Green Energy Services
- Strong and diverse existing portfolio base.
- Established track record, favorable national policy support, and visibility for future growth.
- Reliable cash flow supported by long-term O&M contracts with high credit quality counterparties.
- Supported and promoted by our parent company, IWL.
- Established supply chain in place.
- Strong and experienced management team.
Weakness of Inox Green Energy Services
- Dependency on IWL
- Loss-making company
- Contractual obligations for the company that can hinder growth
- High borrowing/debt
Objectives of Inox Green Energy IPO
The net proceeds of the Fresh Issue, i.e., gross proceeds of the Fresh Issue:
I. Repayment and/ or pre-payment, in full or part, of certain borrowings availed by the Company including redemption of Non- Convertible Debentures in full.
II. General corporate purposes.
Inox Green Energy IPO: Grey Market Premium (GMP)
As per the market observers, shares of Inox Green Energy Services Ltd are available at a premium of ₹12 in the grey market.
Inox Green Energy Services: Financial Information
| Period Ended | Total Assets | Total Revenue | Profit After Tax | Net Worth | Total Borrowing |
| 31-Mar-19 | 2339.86 | 172.16 | 1.68 | 96.54 | 1084.92 |
| 31-Mar-20 | 2692.8 | 186.29 | -27.73 | 42.96 | 1411.02 |
| 31-Mar-21 | 2120.65 | 190.23 | -4.95 | 806.63 | 904.17 |
| 31-Jun-22 | 2127.74 | 63.16 | -11.58 | 795 | 909.92 |
Inox Green Energy IPO review
In FY21, revenue was marginally higher than the previous year. It reported a strong June quarter with Rs 63 crore in revenue. The company has posted net losses for the declared last three fiscals due to interest costs and higher amortization. Its EBIDTA margin is usually in the range of 45-50%. The total borrowings at the end of FY22 were close to Rs 904 crore. The company is expected to become debt free after the IPO.
Since the company has reported net losses, the price-to-earnings multiple will not be meaningful. It has no comparable listed peer.
It is poised for bright prospects ahead with major spending on renewable energies under “Atmanirbhar Bharat” initiatives. Well, based on its current financials, the issue is priced at a negative P/E. But keeping in mind the future prospects and rising demand for wind energy, well-informed investors may consider parking funds for medium to long-term rewards.
