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Two new Green IPOs to hit the Indian Markets soon – However, both are fundamentally weak

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Two Green IPOs in India – Ind Eco Ventures and Inox Wind

The Indian stock market has been languishing in the last couple of years with retail investors abandoning the markets, ruled by fraudsters and scamsters. The earnings by the companies have also been weak as the economy limps along at a 5% GDP growth rate. Corporate governance in India leaves a lot to be desired and many companies are strictly avoidable. Various legal and illegal means are used to siphon off money and profits by investors and the stock market index has risen only due to a select group of FII loved stocks. The Indian primary market for IPOs has also been in a bad shape, with only few large IPOs managing to raise money and PE investors are stuck without many exit options. Only Ben Bernanke has managed to keep the Indian stock markets near its all time high levels through his ultra loose monetary policy. Otherwise I suspect that the markets would have been much lower, as the Indian domestic money refuses to be invested in the tainted stock markets. The Indian investors’ love for gold and real estate is not without reason, as inflation adjusted returns have been been hugely negative for investors in the last 5 years. Investing in gold and real estate would have given you a 50% return, when compared to 0 to negative return from the stock market.

Two Indian renewable energy companies plan to come out with IPOs to raise money in the near future. One is a green utility by the name of Ind Eco Ventures and the second one is a wind turbine manufacturer called Inox Wind. Though I have not gone deeply into the financials, a quick high level view makes me think that both the issues should be avoided. Only a few green utilities in India have done well, while others have languished. Problems in obtaining renewable energy credits, delays in payment of money by distribution companies, high levels of costly debt have all led to even some of the better green utilities not being a good prospect. Bessemer and Shriram Group backed Orient Green Power has given huge negative return since its IPO.

Indian Eco Venture

Indian Eco Venture seems a smaller version of OGP with pies in all renewable energy plants such as wind, biomass and solar energy. The profits are nothing to write home about and I wonder why the company needs to do an IPO with such financials and in such a pessimistic market.

Inox Wind

The second company looking to do an IPO is Inox Wind which is looking to raise more than $100 million. This seems a lot for a sector which is doing quite badly, due to the massive overcapacity created by the Chinese which have left top wind turbine makers such as Suzlon, Gamesa and Vestas deeply in the red. Making wind turbines does not seem a good idea as the Chinese are looking to push into the Indian market with their super low cost equipment. Ming Yang (MY) has already signed a deal with Reliance Energy to set up wind farms using cheap debt from CDB. The prospects for growth seem limited in this mature industry and I would look to avoid Inox as well.

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Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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