Fresh IPO Wave: Green Energy, Healthcare & Solar Tech In Focus

There is a buzz in the Indian primary market with three distinct IPOs lined up. Investors can choose a massive green energy player, a specialised healthcare provider or a high-growth solar component manufacturer.

Leading the pack is the Brookfield-backed renewable giant CleanMax Enviro Energy Solutions. CleanMax has received the green light from SEBI for its mega ₹5,200 Cr public issue.

Following this is NephroPlus (Nephrocare Health Services) which is Asia's largest dialysis provider. They have also secured SEBI's nod for an IPO, which includes a fresh issue of ₹353.4 Cr and an offer for sale (OFS) of 1.27 crore equity shares.

Hitting the market on Nov 13 is Fujiyama Power Systems, which is a rooftop solar company. This IPO is aiming to raise ₹600 Cr through new shares, with the price band at ₹216-228/equity share for its upcoming public issue, which closes on Nov 17. It also has an OFS component.

This diverse pipeline includes a major promoter-heavy exit, a healthcare growth-funding round, and a new-age manufacturing play. With so many different IPOs with different structures and sectors, how can we differentiate hype from high-quality opportunities?

CleanMax: A Green Play Or A PE Exit?

The largest of the new issues is CleanMax. It is backed by global investment giant Brookfield, and has established itself as a leader in the C&I (Commercial and Industrial) segment.

• What They Do: CleanMax has a distinct business model. It does not focus on building massive power plants to sell to state grids. It rather builds, owns, and operates renewable energy projects (solar, wind, and hybrid) for a blue-chip corporate clientele. The company is directly enabling some of the world's biggest corporations to meet their "net-zero" goals. Thus, the company has high-quality, long-term revenue streams.

• What the IPO Is For: Their IPO is a tale of two parts i.e. a fresh issue and an OFS (Offer for Sale). The OFS component, where existing shareholders like Brookfield and the founder are selling their stakes, is considerably larger than the fresh issue.

NephroPlus: A Pure Risk On Healthcare Growth?

Unlike CleanMax, the NephroPlus IPO growth-funding story is a bit different.

• What They Do: Nephrocare Health Services is operating under the brand NephroPlus and is Asia's largest dialysis services provider. This is a non-discretionary, specialised, and essential healthcare service. The business model is built on providing life-sustaining care, which is a segment with high entry barriers and stable, long-term demand.

• What the IPO Is For: The public issue is a combination of a fresh issue of shares and a smaller OFS by its backers. The fresh issue proceeds here are intended for expanding the company's network of dialysis centres and investing in new medical technologies.

Fujiyama Power: A "Make In India" Solar Play?

The Fujiyama Power Systems IPO is a high-growth manufacturing play. It taps directly into the "Make in India" and energy transition themes.

• What They Do: Fujiyama operates in the rooftop solar sector. However, it is not just an installer. The company has a wide, vertically-integrated product range. It comprises of over 500 SKUs like solar inverters, solar panels, and lithium-ion batteries, all sold under its own brands. It offers on-grid, off-grid, and hybrid solar system solutions.

• What the IPO Is For: This IPO is a clear-cut growth capital raise. The fresh issue proceeds are also going to be used to set up new manufacturing facilities for its core products in Madhya Pradesh.

What Does Each IPO’s Fine Print Reveal?

This trio of IPOs viz. CleanMax, NephroPlus, and Fujiyama perfectly illustrate why investors must look beyond the "listing day pop" and read the "purpose" of the issue. A DRHP (Draft Red Herring Prospectus) can tell you everything you need to know.

1. Look at the "Use of Proceeds" section: Is the money being raised to build new factories, or is it being used to repay old debt?
   
2. Analyse the "Offer for Sale" component: Is the IPO primarily a fresh issue to fund the company's growth, or is it a massive OFS where the existing private equity owners are the primary sellers?
   

There is no "right" or "wrong" structure, but different structures tell very different stories. One is a bet on the company's future growth, while the other is an invitation to buy a mature, established asset from its current owners, often at a premium. Thus, the question an investor should ask is: What am I actually paying for?

Sources:

Scanx trade
Moneycontrol
Livemint