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Subscribe to Inox Wind IPO: Ajcon Global

18 March, 2015 11:21 AM
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Inox Wind is part of the Inox Group, which operates in various businesses, including industrial gases, engineering plastics, refrigerants, chemicals, cryogenic engineering, renewable energy and entertainment sectors. IWL is one of India’s leading wind power solutions providers, manufacture wind turbine generators (WTG's), and provide turnkey solutions by supplying WTG's and offering services, long term operations and maintenance of wind power projects. The company was incorporated in April 2009 and commenced operations in March 2010. Under the National Action Plan on Climate Change (NAPCC), the Government of India has set a target of having 15% renewable energy in the electricity generation mix by 2020, implying a total installed base of approximately 100GW of renewable energy generation capacity which presents a big opportunity to the Company. Through wholly-owned subsidiaries, Inox Wind Infrastructure Services Ltd (IWISL), and Marut Shakti Energy India Ltd (MSEIL), it provides turnkey solutions for wind farm projects. These services include wind resource assessment, site acquisition, project development, erection and commissioning, and long-term operations and maintenance of wind power projects.

The Company promoters are highly experienced and knowledgeable. Mr. Vivek Jain – Managing Director has business of experience of 30 years. Its key clientle includes Green Infra., Tata Power, Bhilwara Energy etc. The Company has a strong orderbook. As of December 31, 2014, its order book included orders for WTGs with aggregate capacity of 1,258 MW, comprising orders for supply and erection of WTGs with aggregate capacity of 694 MW, including 50 MW ordered by IRL, a Group Company, in addition to orders for only the supply of WTGs with aggregate capacity of 564 MW. Out of the above order book, WTGs of aggregate capacity of 122MW have already been erected and commissioned as of December 31, 2014. The Company key peers domestically include Suzlon Energy which was under severe liquidity crunch and is grappling with profitability issue.

"At the upper band of the issue price, IWL is valued at 30x 9MFY15 Annualised EPS of Rs. 10.77. With due consideration to factors like a)thrust of government on renewable energy sector, b) ability to provide turnkey solutions for wind farm projects in India, c)strong order book and project execution capability, d) recognized and trusted corporate group, e) favorable capital structure, f) strong return ratios, g) valuations deserves a premium as its operating and net margins are relatively high and its operating and total cost per MW is relatively low compared to a number of major wind turbine manufacturers inside and outside of India, hence we recommend SUBSCRIBE", says Ajcon Global research report.

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