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IPO of Inox Green Energy: Should I subscribe? What brokers say

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IPO of Inox Green Energy: Should I subscribe? What the brokers say – Inox Green Energy IPO | The Economic Times November 12, 2022, 10:26 AM ISTInox Green Energy Services’ initial public offering (IPO) opened for subscription on Friday, November 11 and will close on November 15. The company is selling its shares in the range of Rs 61 -65 each to raise Rs 740 crore in the primary markets. The issuance consists of a new sale of shares worth Rs 370 crore and a sale offer of the same amount from its parent company, Inox Wind. Investors can make a minimum bid of 230 shares and then its multiple. Here’s what the brokerages are saying: Agencies Rating: Not Rated The company has posted losses over the past two years, the government’s push on green power will help the company grow, Reliance Securities said. “The strong and diversified portfolio, favorable domestic political support, visibility of future growth, support for long-term O&M contracts and support from parent company Inox Wind are key positives, while the valuation looks costly considering given the current financial situation,” Reliance Securities said.iStockRating: Subscribe“Inox Green Energy has a strong and diverse existing portfolio with an established track record. Plus, favorable national political support and visibility for future growth works for the business. The company with reliable cash flow backed by long-term O&M contracts with high credit quality counterparties is backed and promoted by its parent company, IWL,” Hem Securities said.
iStockRating: SubscribeInox Green’s valuation seems reasonable, given the nature of its business and comparative margin profiles. Inox green has much better EBITDA margins than its global peers, KR Choksey Research said. We are optimistic given the company’s consistent track record, strong parentage, government initiatives to push the renewables sector and also expect financials to improve with debt reduction on the books. “, he added with a note “subscription”.
iStock Ranking: Underwritten With Caution In a higher price range, the company requires an EV/sales multiple of 13.6x (based on FY22 sales), which seems to be higher given the ratios yield, Choice Broking said. The macros of the wind power segment are improving after the change of regime and the restrictions linked to the pandemic. With a goal of massive capacity additions over the next five years, the target market for operations and maintenance services would expand, he added with a “subscribe with caution” note.
Agency Ranking: Long-Term Subscription Inox Green has a 7% market share in O&M portfolios and has an inorganic opportunity for growth through acquisition of inactive players. O&M contracts are long-term contracts with price clauses that provide long-term revenue visibility, Arihant Capital said. The issue is valued at 22x EV/EBITDA based on FY22 EBITDA,” he added with a “sign up for the long haul” note.
Getty ImagesRating: Not Rated’s reliance on the parent company for most O&M contracts could lead to moderate growth in future order intake. Total debt on the books was Rs 900 crore, although management expects no more net debt in the coming period (proceeds from IPO and sale of SPV), we see uncertainty about this and future profitability,” ICICI Direct said. (Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)iStockTo view your saved stories, click the link highlighted in bold