Why is Azure Power worth investing

Azure Power, one of the leading solar energy firms in India has finally launched its IPO in New York. The company was thinking of doing so, since June last year. The company will trade under the ticker name “AZRE” on NYSE. Approximately 6.82 million equity shares ranging between $21-$23 per share will be offered. The proceeds of this IPO will be used to purchase shares of Azure Power India Ltd. In merely eight years of its existence, Azure Power now ranks as the eighth solar project developer for one year ended June 2016.

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Though India has many large companies engaged in solar business like Tata Power, Adani Group, Mahindra, L&T etc., Azure Power will be the first Indian Solar company to list on foreign stock exchange. Azure Power will be a good way to invest in the secular solar growth in India. Azure Power operates utility scale projects and several commercial rooftop projects across India. The country with its ambitious 100 GW solar installation target is all set to witness a strong growth in this sector.

The company developed the first private utility scale solar project in 2009 in India and is the largest owner and operator of projects under the National Solar Mission.

Azure Power has been expanding rapidly in the country, having a presence across more than 15 states in India today. The company has a strong portfolio of more than 1000 MW and has installed more than 500 solar rooftop in India. The company has a record of completing its projects before time. Its 100 MW plant in Rajasthan is amongst the largest operating solar power project under the National Solar Mission. Azure Power is a low-cost solar power provider in the country.

It is currently the largest owner and operator of solar power plants in Punjab, having a solar portfolio of more than 225 MW. The company has also made a mark by employing local people from the nearby villages and plays an instrumental role in providing electricity to the rural parts of India.

Financials

Though the company has never been profitable in its limited operating history since 2008, teh losses have been reducing. Given below is a snapshot of the company’s performance over the quarters.

As per Azure Power’s SEC Filing

Risks

Some of the risks involved while investing in Azure Power could be regulatory delays, land acquisition and evacuation infrastructure issues. I think the company did well by listing on NYSE. Firstly it will allow foreign investment for those interested in investing in India’s solar sector. Secondly, given India’s capital problems, raising money through PE, capital markets, pension funds and international financial institutions could have been a growth constraint for the company.