Premier Energies IPO: Clean Energy Leader’s ₹2,830 Crore Issue Opens in 3 Days—Key Details to Know Before You Invest

Premier Energies is launching its initial public offering (IPO) on Tuesday, August 27. The subscription window will remain open until Thursday, August 29. The company aims to raise ₹2,830 crore through this IPO.

The IPO consists of two parts: a fresh issue of 2.87 crore shares worth ₹1,291.40 crores and an offer for sale of 3.42 crore shares totaling ₹1,539.00 crores.

The price range for the shares has been set at ₹427 to ₹450 per equity share, with each share having a face value of ₹1. The net offer is divided as follows: 50% for qualified institutional buyers, 15% for non-institutional investors, and 35% for retail investors.

Investment Opportunity for Retail Investors

Retail investors can bid for up to 13 lots, with each lot containing 33 shares. At the highest price band of ₹450, a minimum investment of ₹14,850 per lot is required.

Key Objectives

The money raised from the IPO will be used to fund various goals. A significant portion will be invested in Premier Energies’ subsidiary, Premier Energies Global Environment Private Limited. This investment will help finance the construction of a 4 GW solar PV TOPCon cell and a 4 GW solar PV TOPCon module manufacturing facility in Hyderabad, Telangana. The remaining funds will support general corporate purposes.

About Premier Energies

Premier Energies is India’s second-largest integrated solar cell and module manufacturer. The company has an annual installed capacity of 2 GW for solar cells and 3.36 GW for solar modules as of March 31, 2024. They specialize in making solar PV cells and modules, executing engineering, procurement, and construction (EPC) projects, independent power production, and offering operation and maintenance (O&M) services for their EPC projects. The company also sells various solar-related products.

India’s Solar Module Growth

India’s solar module manufacturing capacity has grown rapidly, increasing from 4.2 GW in fiscal 2017 to 60 GW in fiscal 2024. This growth is expected to continue, with capacity projected to exceed 100 GW by fiscal 2028.

Leveraging Market Growth

Premier Energies plans to capitalize on the growing demand for solar modules in India. A portion of the funds from the IPO will be used to enhance its manufacturing capabilities. The company plans to build a new 4 GW TOPCon solar cell line and a 4 GW TOPCon solar module line.

Global Expansion

Premier Energies is expanding its international presence, particularly in the U.S. market. The company signed a letter of intent in February 2024 with an American solar manufacturer to develop a TOPCon solar cell manufacturing facility in the U.S. Additionally, in April 2024, they signed an MoU with international partners to establish a wafering facility in Malaysia, taking advantage of the “China Plus One” strategy that encourages diversifying manufacturing bases.

Diverse Customer Base

Premier Energies has a wide range of customers in India and internationally. As of March 31, 2024, the company had 164 domestic customers across 23 states and union territories and 23 international customers. In the first nine months of FY23, the top 10 customers accounted for approximately 74.64% of the company’s revenue.

Order Book Overview

As of March 15, 2024, Premier Energies’ order book stands at ₹53,620.51 million. This includes orders for non-DCR solar modules, DCR solar modules, solar cells, and EPC projects. The order book features significant deals, such as a contract with NTPC for the supply of 611.04 MW of bifacial solar modules.

Key Risks

Premier Energies’ revenue is heavily dependent on a small number of key customers. Any loss of these customers or a drop in revenue from them could significantly impact the company’s financial health. Additionally, the company’s growing reliance on exports could be affected by changes in government policies in the countries they export to. Some of the company’s subsidiaries have also reported losses in recent years, which could further impact its overall financial performance.

Competition

Premier Energies faces competition from several other solar manufacturers, including Waaree Energies, Mundra Solar, and Vikram Solar. Despite the competition, the company believes it is well-positioned to compete due to its integrated manufacturing capabilities and strong brand presence.

Allotment and Listing Details

The allotment for the Premier Energies IPO is expected to be finalized on Friday, August 30, 2024. The shares are scheduled to be listed on both the NSE and BSE, with a tentative listing date of September 03, 2024.