Emmvee Photovoltaic Power Ltd.'s initial public offering (IPO) faced headwinds on its second day of bidding, with subscription rates remaining low and grey market premium showing signs of weakness. The Rs 2,900 crore mainboard offering, which includes both fresh issue and offer-for-sale components, has thus far failed to generate significant investor enthusiasm.

Subscription Status

The IPO has seen a tepid response across investor categories:

IPO Details

• Issue Size: Rs 2,900 crore
• Fresh Issue: Rs 2,143.86 crore
• Offer-for-Sale: Rs 756.14 crore
• Price Band: Rs 206-217 per share
• Minimum Investment (Retail): Rs 14,973
• Subscription Period Ends: November 13
• Expected Listing Date: November 18 (BSE and NSE)

Grey Market Performance

The grey market, often considered an unofficial indicator of investor interest, has shown a decline in enthusiasm:

• Grey Market Premium: Reduced to Rs 3 per share
• Estimated Listing Price: Rs 220 (based on upper price band)

This decrease in grey market premium suggests a potential softening of investor expectations regarding listing gains.

Company Overview

Emmvee Photovoltaic Power Ltd. is a player in the renewable energy sector, focusing on solar power technologies:

• Core Business: Manufacture of solar PV modules and cells
• Production Capacity (as of May 31):
  • Solar PV Module: 7.80 GW
  • Solar Cell: 2.94 GW

Market Implications

The underwhelming response to Emmvee's IPO could be indicative of several factors:

1. Market Saturation: Investors might be cautious due to the increasing number of renewable energy companies entering the market.
2. Valuation Concerns: The pricing of the IPO may be perceived as steep by some investors.
3. Broader Market Sentiment: Overall market conditions and investor appetite for new issues could be influencing subscription rates.

As the IPO enters its final day of subscription, it remains to be seen whether institutional investors will step in to bolster the subscription numbers. The performance of this IPO could provide insights into investor sentiment towards the renewable energy sector and the broader IPO market in India.

Emmvee Photovoltaic Power, India's second-largest integrated solar cell and module manufacturer, launched its Initial Public Offering (IPO) with a lukewarm response on the first day. The Rs 2,900 crore IPO saw a 7% subscription rate, indicating cautious investor sentiment.

Subscription Details

The IPO, which opened for subscription on November 9, received 50.71 lakh bids against the 7.74 crore shares on offer. Here's a breakdown of the subscription rates:

IPO Structure and Pricing

• Price Band: Rs 206-217 per share
• IPO Size: Rs 2,900 crore
  • Fresh Issue: Rs 2,144 crore
  • Offer-for-Sale: Rs 756 crore
• Subscription Closing Date: November 13
• Grey Market Premium: Rs 20 per share (9% premium over upper price band)

Company Overview

Emmvee Photovoltaic Power has established itself as a major player in the solar energy sector:

• Manufacturing Capacity:
  • Module Capacity: 7.8 GW
  • Solar Cell Capacity: 2.94 GW

Financial Performance

The company has shown remarkable growth in recent years:

IPO Objectives

Emmvee plans to utilize the IPO proceeds as follows:

1. Debt Repayment: Rs 1,621 crore
2. Capacity Expansion:
   • Module Capacity: To 16.3 GW
   • Solar Cell Capacity: To 8.94 GW
   • Target Completion: First half of FY28

Market Sentiment

The grey market premium of Rs 20 per share suggests a positive sentiment, indicating a potential listing gain for investors. However, the tepid first-day subscription, particularly from institutional investors, may raise concerns.

Analyst Recommendations

SBI Securities has recommended subscribing to the IPO for long-term investment. However, they've highlighted a significant risk:

• Client Concentration: Top 10 customers contribute over 85% of revenues

Conclusion

While Emmvee Photovoltaic Power's IPO presents an opportunity to invest in India's growing solar energy sector, the initial lukewarm response and high client concentration risk warrant careful consideration. Investors should assess their risk appetite and long-term investment goals before making a decision.