Inox Green Energy to bring in Rs 740 crore IPO in October-November 2022

After withdrawing its initial draft red herring prospectus in April 2022, Inox Green Energy Services has received SEBI approval on its second draft red herring prospectus. Inox Green now plans to come out with its Initial Public Offering (IPO) by October 2022 and raise Rs 740 crore to fund its expansion plans. 

Inox Green had first filed its draft red herring prospectus in February 2022 but withdrew it in April 2022 for unknown reasons. In June 2022, Inox Green Energy then filed a draft red herring prospectus again for the second time. Recently, SEBI approved the draft red herring prospectus and as news spread about Inox Green's prospective IPO between October and November 2022, share prices rose by 8% in a day. 

Inox Green's first DRHP filing: Inox Green's first IPO was a Rs 740 crore IPO that was supposed to be made of two parts:

• A share sale worth Rs 370 crore by Inox Wind
• Fresh issue of shares worth Rs 370 crore.    

But the DRHP was withdrawn and the reasons were not disclosed.

What does Inox Green exactly do? Inox Green Energy Services basically provides long-term operation and maintenance (O&M) services for wind farm projects in India. The business specifically provides 'O&M' services and common infrastructure facilities for wind turbine generators. Their operations are necessary to ensure that wind farms and the associated power evacuation infrastructure are functioning well. Their operations include:

• Remote monitoring & control of wind farm projects through supervisory control and data acquisition.
• Coordination to cover timely reading of energy meters.
• Providing daily generation reports to customers.
• Implementation of quality, safety and environment management systems as per the latest ISO standards.
• Inox Green also focuses on predictive and reactive maintenance of wind farms through which it undertakes scheduling of regular inspections and maintenance (which is enhanced during peak wind seasons).

How is the company doing generally? As per ET, the company is witnessing 30- 40% growth each year and its value will reach Rs 400-500 crore in the next three-four years. Inox Green has reported a negative return on equity (ROE) for 3 consecutive years and posted a loss of Rs 129.27 crore for the 4th consecutive quarter. When we compare Inox's stock returns to Nifty Smallcap 100's returns, Inox fared well by giving a 3-year return of 305.31% as compared to Nifty Smallcap 100's 78.12%.