Premier Energies IPO Day 1: Should You Apply? Check GMP, Subscription Status, and Key Dates

Premier Energies, a company that makes solar cells and modules, is starting its initial public offering (IPO) today, August 27. The IPO will run until August 29, with shares priced between ₹427 and ₹450 each. The company has already raised ₹846 crore from anchor investors.

Share Allocation Details

In this IPO, 50% of the shares are set aside for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 35% for retail investors. Employees of the company can also buy shares at a discounted rate of ₹22 per share.

About Premier Energies

Founded in April 1995, Premier Energies specializes in making integrated solar cells and panels. The company’s product lineup includes solar cells, solar modules, monofacial and bifacial modules, as well as Engineering, Procurement, and Construction (EPC) and Operations and Maintenance (O&M) solutions. Premier Energies operates five manufacturing plants, all located in Hyderabad, Telangana, India. The only similar company listed in their red herring prospectus (RHP) is Websol Energy System Ltd.

Financial Performance

Premier Energies has seen strong growth in recent years. From FY21 to FY23, the company’s operating revenue grew at a compound annual growth rate (CAGR) of 42.71%. In FY24, their revenue jumped by 120% to ₹3,143 crore. The company also reported a profit of ₹231 crore in FY24, a big improvement from a loss of ₹13.3 crore the previous year.

Subscription Status and Market Reception

The public can start subscribing to the IPO from 10:00 AM on the first day. Subscriptions will be updated once the bidding begins.

Analysts’ Review of Premier Energies IPO

Canara Bank Securities Ltd: As of March 31, 2024, Premier Energies is the second-largest manufacturer of solar cells and modules in India. The company’s revenue for the first three months of FY25 reached ₹16,573.67 million, with 65.20% of this coming from its top 5 clients. This shows how important these clients are to the company’s overall financial health. The brokerage highlighted that the company’s price-to-earnings ratio (P/E) for FY24 is 64.94x, but this could drop to 18.97x for FY25, due to strong revenue expectations. Although the company is currently loss-making, the brokerage noted the strong growth potential.

Reliance Securities Ltd: Premier Energies has a long history in the solar manufacturing industry and is known for its expertise in making solar cells. The company has an installed capacity of 2.0 GW annually, which accounts for 28% of India’s total capacity in FY24. The brokerage recommended subscribing to the IPO, citing the company’s strong order book, diversified client base, and consistent profitability.

Details of the IPO

The IPO includes a fresh issue of equity shares worth up to ₹1,291.4 crore and an offer for sale (OFS) of 3.42 crore shares by existing shareholders, valued at approximately ₹1,539 crore based on the upper price band of ₹450. As part of the OFS, South Asia Growth Fund II Holdings LLC will sell 2.68 crore shares, South Asia EBT Trust will sell 1,72,800 shares, and promoter Chiranjeev Singh Saluja will sell 72,00,000 shares.

The company’s promoters currently own 72.23% of the shares, while the public holds 26.12%. The remaining 1.65% of shares are held by employee trusts.

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

Grey Market Premium (GMP)

Premier Energies shares are currently trading at a premium of ₹358 in the grey market. Based on the upper end of the IPO price band and this premium, the estimated listing price could be around ₹808 per share, which is 79.56% higher than the IPO price of ₹450. The grey market premium shows how much investors are willing to pay above the issue price.