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The Initial Public Offering (IPO) of the biggest renewable energy firm Windforce Ltd. has been oversubscribed at retail level by twice and six times at institutional level, analysts said.
Windforce yesterday revealed that there were 1,536 applications requesting 402.18 million shares worth Rs. 6.43 billion via payment made by cheques and Real-Time Gross Settlement (RTGS).
Separately, there were 118 applications requesting 1.2 billion shares worth Rs. 19.3 billion via payment made by bank guarantees.
Interpreting official oversubscription details furnished by the company, analysts said retailers use cheques and RTGS payments and institutions opt for bank guarantees.
The biggest IPO since 2011, Windforce offered a 15% stake or 202.6 million shares of par value of Rs. 10 at Rs. 16 each.
When the Rs. 3.2 billion IPO closed on its official opening day on 24 March, it had received 1,654 applications requesting 1.6 billion shares worth Rs. 25.73 billion.
As per the prospectus, the basis of allotment proposed was if IPO is oversubscribed, 30% to retail individual investors, 10% to unit trusts, 7.5% to Group employees and directors and 52.5% for non-retail investors.
CT CLSA Holdings, Capital Alliance and several other brokers have recommended the IPO to investors given the company’s performance and outlook as well as the growing demand for and reliance on renewable energy locally and globally.
Windforce currently operates 27 power plants with a total installed capacity of 218 MW. Bulk (55.4%) of this is based in Sri Lanka, while the rest are spread across Pakistan (31.2%), Uganda and Ukraine.
In terms of energy, the company has seven wind plants (69.2 MW), 10 solar power plants (123 MW) and 10 mini-hydro plants (26.4 MW).
Windforce’s share structure is primarily consisted of leading local family businesses, including Akbar Brothers Group (post IPO stake of 33%), Hirdaramani (20.7%), Debug Investments (12.1%) and MAS Holdings (3.3%).
Of the funds raised, Rs. 927 million will be utilised to construct a 15 MW wind plant in Mannar, Rs. 1.4 billion will be utilised to construct a 30 MW solar plant in Senegal and Rs. 932 million will be kept as funds retained for future investments.
In FY20, the company posted revenues worth Rs. 3.5 billion, up by 24% from a year earlier, while gross profit rose by 18.5% to Rs. 2.3 billion and operating profit by 17.5% to Rs. 2.04 billion. Pre-tax profit was Rs. 2.35 billion, up 37.5%, and after-tax profit amounted to Rs. 1.89 billion, up by 28%.
For the nine months of FY21, revenue grew by 36% to Rs. 3.7 billion and pre-tax profit by 7% to Rs. 2.1 billion, while the post-tax figure was Rs. 1.97 billion, up by 5.5% from a year earlier.
