This newly listed wind energy stock surges 15%; here’s why

Shares of Inox Green Energy Services zoomed nearly 15% in intraday trade on Monday after the wind power operations and maintenance (O&M) service provider announced its first acquisition and marked its entry into multi-brand original equipment manufacturer (OEM) wind turbine O&M business. The company in an exchange filing said it has signed a term sheet for the acquisition of majority stake in an independent O&M wind service provider. The company, a subsidiary of wind turbine generator manufacturer Inox Wind, however, did not disclose the name of the acquired company and the financial transaction involved in the deal.

Boosted by the development, Inox Green Energy Services share price jumped as much as 14.6% to hit an intraday high of ₹46.70, after opening lower at ₹40.05, against the previous closing price of ₹40.75 on the BSE. The share of Inox GFL Group company made its stock market debut on November 23, 2022, after raising ₹740 crore through initial public offering (IPO) at an issue price of ₹65 apiece.

With a market capitalisation of ₹1,297.7 crore, the stock currently trades 28% lower than its IPO price, while it touched a 52-week high and low of ₹63.95 and ₹40.05, respectively, on November 23 and December 26, respectively. The stock has fallen 28% in a month and 10% in a week, as per exchange data.

As per Inox Green, the acquisition is a part of the strategic decision taken by the company to grow its fleet through the inorganic route as well. “The inorganic route provides a large growth opportunity for the company to grow its business rapidly as a large part of the operating fleet in India is currently being managed by the unorganized sector. The transition pain in the sector over the past four years saw the growth of the smaller players from the unorganised sector.”

The company further stated that the inorganic growth that it has embarked upon is favorable for all stakeholders; the wind farm owner, the current O&M provider and us. Inox Green is actively pursuing inorganic growth opportunities along with the rapid growth that it envisages from the organic route as well, it added.

“The target company is having a deep & rich experience in wind industry and specializes in O&M of multibrand wind turbine OEMs and provides comprehensive O&M services as well as specialised corrective maintenance services. The Target Company has a proven successful track record with several customers for O&M services with maintenance contracts running up to 5 years,” Inox Green said.

With this acquisition, Inox Green enters multi brand OEM wind turbine O&M business and will be well positioned to serve customers by leveraging the synergies and efficiencies across the combined teams, supply chain capabilities and technical expertise, the company said. The technical and financial strengths of Inox Green will aid the target company to grow at a faster pace, it added.

The transaction is subject to certain regulatory and other customary closing conditions and is expected to conclude by end of January 2023.