Green IPOs Lose Their Shine As Recent Listings Slip Below Issue Price

India's clean-tech companies, mostly in the solar space, had an extended honeymoon with the stock markets that seems to have finally ended in October. Most of the recently listed firms, especially solar IPOs, have seen their share prices fall below their Initial Public Offering (IPO) levels. Latest data from the exchanges suggest that the optimism surrounding these listings has not translated into sustained market support. Of course, none of the firms has been immune to the broader weakness in the small-cap and mid-cap space, where they currently operate.

For most of these firms, the period since 2022 has offered a generational opportunity in terms of market expansion, capacity creation, availability of finance, and hence, wealth creation. They also had the advantage of having the track record of older firms that had been listed earlier, or right upto 2024, that delivered stellar returns to investors. Notably, Waaree RTL, Waaree Energies, KPI Green, Shakti Pumps and more.

While many firms listed to raise money for expansion, notably into solar cell manufacturing, which is a much more capital-intensive process than module assembly, we even had firms going for offer for sale, or promoters and investors selling their shares. The key issue is that the party seems to be ending, as investors, learning from a larger pool of listed firms and with an ear to every piece of news that they think matters, re-evaluate risks for the category. And so far, the verdict seems to be a downgrade for most firms.   

For instance, Saatvik Solar debuted on the bourses on September 26 this year with an IPO price of ₹465 per share. However, by  November 25, its share price had slipped to ₹418.15, indicating weakening investor confidence. Similarly, Karnal-based solar pump manufacturer Oswal Solar, which listed on June 20 with an IPO price of ₹614, is now trading at ₹573.35.

West Bengal-based module maker Vikram Solar, one of the oldest solar module manufacturers, also jumped onto the booming IPO bandwagon to expand its business and initiate solar cell production. But while the company launched at ₹332 per share, its stock is currently trading below the Rs 280 levels.

                 Performance of New Entrants In Green Stocks 

Saga Continues

The most recent large listing, Bengaluru-based Emmvee Photovoltaic, a manufacturer of solar cells and modules, has not seen significant volatility. After listing at ₹217, its stock continues to trade around the same price band.

EPC firm SolarWorld, which entered the market in September with an issue price of ₹357 per share, has fallen to ₹289.50. The only exception in this space so far is GK Energy, which began trading at ₹153 and has since climbed to ₹167.12 per share. In all these cases, the shares hit highs that are 20-40% above their existing prices, showing just how far the correction has hurt investors.  

Sector-Wise Performance 

Market experts say the primary reason is a broader weakness in the equity market that has dented investor morale. Small caps and mid-cap stocks have been particularly hit, which is also where all the new listings belong for now. However, sector-specific concerns may also be at play — including news of a pullback on tendering activity, risks of overcapacity in manufacturing, delays in project awards, unsold PPAs, and muted Q2 results from several listed renewable companies — all pointing toward a slower-than-expected growth outlook for the sector this fiscal. Consider how the PE of industry bellweather Waaree Energies is at 26 (forward, extrapolated for full year FY 26 based on H1 performance) today, versus over 50 just six months back. Which means, during this time, the firm has delivered outstanding results only to see the stock still drift lower. 

Many experts, on the other hand, believe there are pockets of opportunity at these rates, as many firms have strong, committed order books that will deliver a significant upside to earnings right upto H1 of FY27 at least. Then there is the expansion into other segments most have gone for, as they see an opportunity to grab market share where none existed a couple of years back. Consider how solar capacity additions have jumped to almost 25 GW in the first seven months of this year, on course for a possible breach of the 50 GW mark by March. A number that was unthinkable as recently as 2 years back. Add to that a kicker from an expanding rooftop scheme of the Government, or the solar pump scheme, PMKUSUM, or even the rush for BESS projects that will provide a fillip to solar as well, and one would imagine there are enough positives to go with as well. A resolution of trade issues with the US, which opens up that market for exports again, would be a key positive as well. 

When it comes to the capital markets, sentiment can veer between extremes. To that extent, the current pessimism regarding solar stocks seems close to being overdone, and a pullback, as and when it comes, could be equally sharp with 20-30% movements within a month or less.  Firms will do well to ignore the market noise and worry less about their stock prices, as the market understands the logic and impact of diversifications or the net effect of issues linked to tenders or PSA signings. Or leave it to the ones who have not gone public yet.