Inox Green Energy Services Ltd. IPO

Inox Green Energy Services Ltd. IPO - SWOT Analysis

Strengths

Inox Green Energy Services has a strong and diverse existing portfolio base with an established track record, favourable national policy support and visibility for future growth. Its parent company, IWL, together with its group companies, is one of India’s notable WTGs manufacturers, which provides wind energy turnkey solutions across India. IGESL has an established relationship with their suppliers for the parts, components, and tools they require in its provision of O&M services.

Weaknesses

The company is currently entirely dependent on its promoter Inox Wind Ltd (IWL), for its business, and if IWL were to choose another service provider for the operation and maintenance services of its wind turbine generators, IGES’ business, financial condition and prospects may be adversely affected. It has reported a restated loss in past fiscals and may incur additional losses in the future.

Opportunities

In addition to growing its portfolio through the entry of new long-term O&M contracts with customers who purchase IWL’s WTGs, IGESL plans to expand its portfolio to also provide O&M services for WTGs which are not manufactured by IWL. There still exists some unutilized capacity for the installation of WTGs as of June 30, 2022, which the company intends to fill. While such capital expenditure is expected to continue in the short term of its ongoing prior commitments, the company intends to transition to an asset-light model with minimal capital expenditure.

Threats

There are outstanding legal proceedings involving the company, subsidiaries, directors, promoter and its group companies. Moreover, technology failures or advancements could also disrupt its operations. The wind energy industry is highly competitive. The operation of wind energy projects has faced opposition from local communities and other parties in the past and there can be no assurance that the company’s operations will not encounter similar opposition in the future.

Inox Green Energy Services Ltd IPO Noteworthy Highlights

Here are some of the key details and information about Inox Green Energy Services IPO that investors should know before investing:

- Inox Green Energy Services is a subsidiary of Inox Wind Ltd (IWL), a company which is listed on the National Stock Exchange of India Ltd and BSE Ltd, and part of the Inox GFL group of companies.

- IGESL enjoys synergistic benefits as a subsidiary of Inox Wind Ltd. Due to this exclusivity agreement, IWL’s order book is an important indicator of future revenue and growth for the company.

- IGESL has a diversified customer base, some of whom it has enjoyed business relationships with between 5 and 9 years, comprising private companies, independent wind power producers, power utilities and government organizations in India, to whom it provides wind farm O&M services. Its customers comprise large IPPs, PSUs and retail customers.

- The total promoter shareholding in the company is 93.84%. After the IPO, the promoter shareholding in Inox Green Energy Services will drop to 56.04%

- Inox Green Energy Services IPO lot size is 230 shares, and a retail-individual investor can apply for up to 13 lots, making the total investment of 2,990 shares or Rs 194,350.

- Edelweiss Financial, DAM Capital, Equirus Capital, IDBI Capital, Systematix Corporate are the joint Book Running Lead Managers (BRLMs) to the issue.

- 75% of the offer is reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors, and 10% for retail investors.

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