Premier Energies IPO Sees Explosive Demand, Subscribed 58x on Final Day—Get the Inside Details on GMP and Investment

Premier Energies’ Initial Public Offering (IPO) has received a tremendous response, with the offer being subscribed nearly 58 times as of the last day of bidding. The strong demand has been largely driven by institutional investors, whose portion was subscribed 160 times. Non-institutional investors booked their portion 47.65 times, while the retail segment saw 6.6 times subscription.

GMP (Grey Market Premium)

In the grey market, shares of Premier Energies are trading at a premium of ₹390, indicating an 87% increase over the issue price.

Price Band

The price band for the IPO has been set at ₹427-₹450 per share, and investors can bid for a minimum of 33 shares per lot.

IPO Review

Analysts are generally positive about the IPO, recommending investors to subscribe. The company has a diverse customer base, both in India and abroad, and a strong order book worth ₹5,926 crore. Choice Broking has assigned a “SUBSCRIBE” rating, noting that the company’s valuation, at an EV/Sales multiple of 4.8x, is attractive compared to its only listed peer, which is currently loss-making.

Other Details

Premier Energies plans to use the IPO proceeds to invest in its subsidiary, Premier Energies Global, to help fund a new 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module manufacturing facility in Hyderabad. The remaining funds will go towards general corporate purposes.

By the end of FY24, Premier Energies was the second-largest integrated player in India, with an annual installed capacity of 2 GW for cell manufacturing and 4.13 GW for module manufacturing. It also became the largest Indian exporter of solar cells to the U.S. in FY24. The company operates five manufacturing facilities in Hyderabad and has eight subsidiaries in India and abroad.

India’s solar module manufacturing capacity reached approximately 72 GW in FY24, with solar cell manufacturing capacity at 8.1 GW, and the country is expected to see significant growth in this sector. Premier Energies’ revenue grew at a compounded annual growth rate (CAGR) of 42.71% between FY21 and FY23, with a 120% increase in FY24 revenue to ₹3,143 crore. The company also reported a profit of ₹231 crore in FY24, a significant turnaround from a ₹13.3 crore loss in the previous year.

Kotak Investment Banking, JP Morgan, and ICICI Securities are acting as the lead managers for this IPO.