Question
Waaree Energies
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The solar energy production value chain involves several technologically intensive processes, including sourcing polycrystalline silicon as a raw material and producing silicon wafers and ingots from it. Currently, only Adani Group produces these wafers and ingots in India for internal use. Waaree has no solar cell manufacturing capabilities as on date(?). It plans to set up a 6GW capacity ingot-wafers, solar cells and modules manufacturing facility at Odisha and has earmarked ₹2,500 crore from the IPO proceeds for this purpose. It takes a company around 2-3 years to set up and operate technologically complex cell manufacturing facilities and uncertainties related to the efficiency and reliability in-house production. In this context, Premier Energies, which has set up a new 2GW solar cell and module manufacturing plant, is already way ahead of Waaree Energies??. Your comments, please.
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Is it a fair argument when one says Waree’s only competitive advantage right now is its demand security because of its strong export capabilities and substantial government policy support and US’s protectionist trade policies against China. Despite such strong financial performance, industry experts think Waaree Energies does not have a strong enough moat to evince investor interest like Premier Energies because it does not yet have an operational solar cell manufacturing facility. And that they would need extensive funding to develop new moats in the long run. Your comments, please?
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