Solar energy in India has emerged as a key component of the country’s renewable energy strategy, driven by the government’s commitment to reduce carbon emissions and increase clean energy capacity. The Indian government has set ambitious targets, aiming to achieve 500 GW of renewable energy capacity by 2030, with solar playing a pivotal role.
Initiatives like the National Solar Mission and various incentives for solar power generation, including subsidies and tax benefits, are accelerating adoption. As a result, companies in the solar energy space, such as Adani Green Energy, Tata Power, and Waaree Energies, are benefiting from the growing demand for solar installations and infrastructure development. These stocks are seeing strong investor interest as India accelerates its shift toward sustainable energy solutions.
Crash from the Top
The company was listed on the Indian Stock Exchange on October 28, 2024, for Rs. 2,500. Eventually, the stock went on to rise to a high of Rs. 3,743, thereby generating a return of close to 50% in a matter of eight days. However, as the NIFTY 50 started correcting from the top and in just a matter of five days the stock ended up shedding a major chunk of its gain. The stock has seen a massive sell-off resulting in the stock correcting by close to 25%.
Share Price
Currently, the share price is trading at Rs. 2,840, reflecting a decline of 0.93% from the previous close of Rs. 2,870, indicating a dip in investor sentiment or market volatility.
What is the ASM Category
In the Indian stock market, ASM (Additional Surveillance Measure) is a set of measures imposed by the Securities and Exchange Board of India (SEBI) and stock exchanges to monitor and curb excessive volatility or unusual trading in stocks. Stocks are placed under ASM when there are concerns about price manipulation, abnormal price movements, or excessive speculation. The process helps maintain market integrity and investor protection.
Stages of ASM include:
1. Stage I: The stock faces additional monitoring, and its margin requirement is increased.
2. Stage II: Further restrictions, including higher margin requirements and a ban on intraday trading, are applied.
3. Stage III: The stock is subject to stricter surveillance, with short-selling and fresh positions being prohibited.
Types of ASM
Short-term ASM applies to stocks with abnormal price movements or high volatility over a brief period, with increased margins and trading restrictions. Long-term ASM targets stocks showing persistent irregular trading, imposing stricter surveillance and prolonged restrictions to curb speculation and ensure market stability and investor protection.
Tip: A stock typically enters the ASM category when there’s a significant rise in its price without any fundamental basis, often driven by speculation or market manipulation.
Stock enters ASM Category
Recently the shares of Waaree Energies Limited were added to the Short Term ASM(Additional Surveillance Measure) list. The stocks of the company were put under the Stage – 1 category which co-relates with additional monitoring and increased margin requirements for the stock.
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What it means for the Shareholders
Corporate actions are not impacted by a stock being under ASM. The benefits of corporate actions, like dividends, bonuses, splits, etc., are passed on to the shareholder even if the stock is under the ASM category.
About the Company
Incorporated in December 1990, Waaree Energies Limited is India’s largest solar PV module manufacturer, with an installed capacity of 13.3 GW as of FY24, up from 2 GW in FY21. The company holds a 21% share of India’s domestic solar module market and 44% of the country’s solar module exports. Waaree Energies is a market leader, recognized for its significant contribution to the growth of India’s solar energy sector and its expanding global footprint.
Conclusion
Waaree Energies, despite its dominant position as India’s largest solar PV module manufacturer, has experienced significant market volatility since its October 2024 listing. After an initial 50% surge the stock has corrected by 25% and entered the ASM Stage-1 category. This development brings increased margin requirements and monitoring, though shareholders’ rights to corporate benefits remain unaffected.
However, going forward it will be a stock that has to be monitored closely to see what lies ahead for the company and its shareholders.
Written By: Dipangshu Kundu
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
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