Inox Green Energy Services makes weak debut on Dalal Street

The Inox GFL Group company, Inox Green Energy Services Ltd made a weak debut on stock exchanges BSE and NSE on Wednesday. On BSE, Inox Green Energy listed at Rs 60.5 apiece against the issue price of Rs 61 - Rs 65. The stock started its trading journey at Rs 60 apiece on NSE — a 7.7 percent discount to the issue price.

Inox Green Energy Services' IPO, to raise up to Rs 740 crore, started on November 11 and concluded on November 15 with a subscription of 1.6 times. The IPO received bids for 10.4 crore shares as against the 6.7 crore shares on offer.

Inox Green Energy provides long-term O&M services for wind farm projects.

The Inox GFL Group includes companies like Gujarat Fluorochemicals and Inox Wind. While Gujarat Fluorochemicals is engaged in the manufacturing of specialty chemicals while Inox Wind manufacturers wind turbine generators and provides turnkey solutions. The company's operating portfolio of operations and maintenance contracts is worth 2,750 megawatts.

A major provider of wind power operation and maintenance services, Inox Green Energy Services had raised Rs 333 crore from 27 anchor investors at Rs 65 per share ahead of the IPO.

Prominent anchor investors include ICICI Prudential, HDFC Mutual Fund, Aditya Birla Sun Life Mutual Fund, Morgan Stanley Asia, Nomura Singapore, and Citigroup Global Markets.

The company intends to utilise the proceeds from the IPO to repay or pre-payment in full or part, certain borrowings, including redeeming secured Non-Convertible Debentures (NCDs) in full and for general corporate purposes. The amount utilised for general corporate purposes will not exceed 25 percent of gross proceeds.

"We have approximately Rs 420 crore of debt left after repaying Rs 370 crore by the primary proceeds of the IPO," Devansh Jain, executive director INOXGFL Group told CNBC-TV18. "Over the course of the year, we have sold four SPVs, three to Adani and one to Torrent. We have recovered majority of Rs 100 crore, which was to be recovered there. What is left for now to action out is sale of the last SPV which would be down sold in the near future for about Rs 300 crore. So broadly what we are aiming for is to make this company a net debt free entity in the very near future."

Jain asserted that the company will be debt free in the next one year.

The issue is a mix of a fresh issue of equity shares worth Rs 370 crore and an Offer for Sale worth the same amount. Inox Wind will be the selling shareholder in this OFS.

The company is currently loss-making as of date. It reported a net loss of Rs 11.6 crore during the June quarter. "Once we clean-up the debt, we operate at about 50 percent margins and all of that translates into profitability given that there is zero capex in business," Jain said.