| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 427 to ₹ 450 | 33 | 27th Aug, 2024 – 29th Aug, 2024 | ₹2,830.40 Cr |
About Premier Energies Ltd IPO
Premier Energies Limited is a leading force in the solar industry with 29 years of experience and a robust manufacturing footprint in Hyderabad, India, featuring a combined annual capacity of 2 GW for solar cells and 4.13 GW for solar modules. Known for its advanced production of bifacial monocrystalline PERC cells and modules, including innovative TOPCon technology, the company operates India’s first LEED Gold-rated solar manufacturing unit. It is expanding its capabilities with a new 1,000 MW TOPCon cell line. Premier Energies has achieved significant milestones, such as establishing a 75 MW cell line in 2011 and expanding to 500 MW in FY 2021, and holds a substantial order book valued at Rs. 59,265.65 million as of July 2024. The company has demonstrated impressive financial growth with a revenue CAGR of 105.7% from FY22 to FY24. It has earned recognition for its sustainability efforts, including awards from the Renewable Energy India Awards and the Government of Telangana.
Objective of the Premier Energies Ltd IPO
The company proposes to utilize the net proceeds towards the funding of the following objects:
- Investment in the Subsidiary, Premier Energies Global Environment Private Limited, for part-financing the establishment of a 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module manufacturing facility in Hyderabad, Telangana, India (the “Project”);
- General corporate purposes.
Rationale To Invest In Premier Energies Ltd IPO
Premier Energies excels in integrated solar cell and module manufacturing and has a proven track record
According to Frost & Sullivan, Premier Energies is India’s second-largest integrated solar cell and module manufacturer as of March 31, 2024, boasting an annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules. Despite trailing behind Mundra Solar, the largest manufacturer in the country, Premier Energies has demonstrated significant growth over the past 25 years, with their installed capacity expanding from 75 MW in 2011 to 2,000 MW for solar cells and 4,134 MW for solar modules by 2024. The company has made substantial capital investments in their manufacturing units, including a notable increase in module capacity with the latest lines in Units IV and V. Their expertise in solar cell and module production, coupled with advanced technologies like TOPCon, positions them well in the domestic and international markets. With strong vertical integration and a reputation for quality, evidenced by industry awards and significant international export achievements, Premier Energies is well-equipped to capitalize on future opportunities in the solar energy sector.
Premier Energies boasts a diversified customer base and robust order book, with established relationships in India and overseas
Premier Energies leverages its significant annual installed capacity and market position to offer competitive pricing, facilitating access to a broad and diverse customer base both domestically and internationally. As of the Red Herring Prospectus date, Premier Energies serves 165 domestic customers across 23 Indian states and territories and has eight international customers. The company has seen substantial growth in its customer base, with domestic customer numbers increasing from 165 in FY22 to 200 in FY24, while international customers rose from 8 to 27 during the same period. Key domestic clients include Continuum, Shakti Pumps, and First Energy, while global clients feature Arka Energy Inc. of the US. The company’s revenue from operations for FY24 was Rs. 31,437.93 million, with significant contributions from domestic and export markets. Premier Energies’ order book, valued at Rs. 59,265.65 million as of July 31, 2024, includes notable agreements with NTPC and other major customers. The company’s strategic focus on expanding manufacturing capacities and fostering new customer relationships aims to bolster its global market presence and growth prospects.
Valuation of Premier Energies Ltd IPO
Premier Energies Limited (PEL), a prominent player in integrated solar cell and module manufacturing, has shown impressive growth and financial performance over its 29-year history. As of March 31, 2024, PEL stands as the second-largest integrated solar manufacturer in India, with an annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules. For FY24, the company reported revenues of Rs. 31,437.93 million, displaying a CAGR of 105% from FY22, reflecting its strong market presence and operational efficiency. PEL’s order book, valued at Rs. 59,265.65 million as of July 31, 2024, highlights its robust demand and strategic customer relationships. The company’s net income for FY24 was Rs. 2,303 million notably positive, demonstrating a turnaround from past losses of Rs. 146 million in FY23 and indicating strong profitability. Additionally, PEL has invested heavily in expanding its manufacturing capabilities, including a new 4 GW TOPCon solar cell and module line. Despite challenges such as underutilized capacity and intense industry competition, PEL reported a profit of Rs. 1,982 million in FY24 reflecting its solid market position and growth potential. The company has demonstrated consistent enhancement in its Return on Capital Employed (ROCE), progressing from 3.6% in FY22 to 25.6% in FY24. The company’s diversified customer base, which includes major domestic and international clients, further underscores its market strength and prospects for continued expansion. The company is valued at a PE ratio of 82.1x on the upper price band based on FY24 earnings, which is reasonable compared to its peers. Given its strategic investments, strong financial recovery, and substantial order book, the company is well-positioned to capitalize on growth opportunities in the solar energy sector. Therefore, we recommend a “SUBSCRIBE” rating for medium to long-term investment.
What is the Premier Energies Ltd IPO?
Premier Energies IPO is a book built issue of Rs 2,830.40 crores. The issue is a combination of fresh issue of 2.87 crore shares aggregating to Rs 1,291.40 crores and offer for sale of 3.42 crore shares aggregating to Rs 1,539.00 crores.
How to apply for the Premier Energies Ltd IPO through Stoxbox?
To apply for the Premier Energies Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Premier Energies Ltd IPO open?
Premier Energies Ltd IPO is opening on 27th August 2024
What is the lot size of the Premier Energies Ltd IPO?
The Lot Size of Premier Energies Ltd IPO is 32 equity shares
When is the Premier Energies Ltd IPO allotment date?
The allotment Date for Premier Energies Ltd IPO is 30th August 2024
When is the Premier Energies Ltd IPO listing date?
The listing Date for Premier Energies Ltd IPO is 03rd September 2024
What is the minimum investment required for the Premier Energies Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,850
What is the maximum investment allowed for the Premier Energies Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 193,050
What are the risks associated with investing in the Premier Energies Ltd IPO?
- Premier Energies Financial Stability Dependent on Key Customers and Success of Solar Products: Premier Energies revenue is significantly tied to key customers and relies heavily on the success of its solar cells and modules. Any loss of major clients or changes in demand for monocrystalline solar technology could adversely impact financial performance, highlighting the company’s dependence on these factors for profitability.
- Geographic Concentration: Premier Energies operations are concentrated in Telangana, India, with five manufacturing sites in Hyderabad and a planned facility in Seetharampur. This geographic concentration exposes the company to risks such as economic fluctuations, weather conditions, and natural disasters. Although recent disruptions have been minimal, any significant issues could adversely impact production, shipments, and financial performance.
- Impact of Capacity Expansion on Business: Expanding annual installed capacity despite underutilization could adversely affect the company’s financial health if demand does not meet expectations. The planned 4 GW TOPCon cell and module facility aims to enhance market share and reduce costs, but if demand falls short, it may lead to increased costs and financial strain.
When will the Premier Energies Ltd IPO shares be credited to my Demat account?
The Premier Energies Ltd IPO be credited to the account on allotment date which is 02nd September 2024
Where can I find the Premier Energies Ltd IPO prospectus?
The prospectus of Premier Energies Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Premier Energies Ltd IPO?
| IPO Open Date | Tuesday, August 27, 2024 |
|---|---|
| IPO Close Date | Thursday, August 29, 2024 |
| Basis of Allotment | Friday, August 30, 2024 |
| Initiation of Refunds | Monday, September 2, 2024 |
| Credit of Shares to Demat | Monday, September 2, 2024 |
| Listing Date | Tuesday, September 3, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on August 29, 2024 |
