Premier Energies IPO: Premier Energies, a manufacturer of solar cells and modules, is ready to make its initial public offering debut on D-Street today, August 27. The IPO will conclude on August 29 and has established a price range of ₹427 to ₹450 per equity share with a face value of ₹1. The company has garnered ₹846 crore from anchor investors.
Up to 50% of the shares in the public issue of the Premier Energies IPO are allocated for qualified institutional buyers (QIB), while 15% are designated for non-institutional investors (NII). 35% of the offer is reserved for retail investors. Employees can benefit from a discount of ₹22 per equity share.
Premier Energies Limited was established in April 1995 and focuses on manufacturing integrated solar cells and panels. The company's product line consists of solar cells, solar modules, monofacial and bifacial modules, as well as EPC and O&M solutions. Five manufacturing facilities are operated by the company, all situated in Hyderabad, Telangana, India.
The company's only comparable firm listed in the red herring prospectus (RHP) is Websol Energy System Ltd.
The operating revenue of the company increased at a compound annual growth rate (CAGR) of 42.71% from FY21 to FY23. In FY24, the revenue surged by 120% to reach ₹3,143 crore. Furthermore, the firm achieved a profit of ₹231 crore in FY24, a significant improvement from the ₹13.3 crore deficit in the previous year.
At 17:15 IST, on the first bidding day, the public issue has been subscribed to 2.10 times, the retail portion of the book build issue was booked 1.81 times, the NII segment was subscribed 5.38 times, and the QIB portion is booked 4%, as per BSE data. The employee portion has been booked 3.16 times.
As of March 31, 2024, Premier Energies ranked second in terms of yearly installed capacity and second in terms of integrated solar cell and solar module manufacturing in India, according to the brokerage. Premier Energies Ltd recorded operating revenue of ₹16,573.67 million for the first three months of FY2025. Of this income, its top 5 clients accounted for 65.20%. This concentration highlights the relevance of these ties to the company's overall financial success by indicating a substantial dependence on them.
“This company’s issue is available at P/EPS of 64.94x for FY2024 whereas annualised P/E of FY2025 appears reduced to 18.97x, this is due to strong expectations of revenue potential out of the orderbook and expansion plans with same price. We cannot compare the valuation of the company with peers as it is loss making,” the brokerage said.
The company, according to the brokerage, has a lengthy history in the solar module manufacturing industry and expertise producing solar cells. With an installed capacity of 2.0 GW annually, it will account for 28% of India's total capacity in FY24. Based on the M10–182 mm x 182 mm shape, PEL has created the first solar cell manufacturer in India to produce a bifacial monocrystalline Passivated Emitter and Rear Contact (PERC) solar cell in FY22.
With a robust order book of ₹5,926 crores, a diverse customer base, partnerships in a wide variety of countries that generate foreign income, and steady profitability over the previous several years, the company has a broad clientele. As a result, the brokerage suggests SUBSCRIBING to the issue.
The initial public offering (IPO) comprises a fresh issuance of equity shares totaling up to ₹1,291.4 crore and an Offer for Sale (OFS) of a maximum of 3.42 crore shares by the existing shareholders, which amounts to approximately ₹1,539 crore based on the upper band price of ₹450.
As part of the offer-for-sale component, South Asia Growth Fund II Holdings LLC (SAGF II) will sell 2.68 crore equity shares, South Asia EBT Trust will divest 1,72,800 equity shares, and promoter Chiranjeev Singh Saluja will offload 72,00,000 equity shares.
The company's promoters collectively possess a 72.23% stake, while the public holds 26.12% of the shares, which includes ownership by South Asia Growth Fund II Holdings LLC, and the remaining 1.65% shares are held by employee trusts.
The issue has book-running lead managers in the form of Kotak Investment Banking, JP Morgan, and ICICI Securities.
Premier Energies IPO grey market price is +358. This indicates Premier Energies share price were trading at a premium of ₹358 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Premier Energies share price was indicated at ₹808 apiece, which is 79.56% higher than the IPO price of ₹450.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
