Premier Energies IPO: Last Day to Apply! Huge Demand, GMP Surges – Should You Subscribe or Miss Out?

The initial public offering (IPO) of Premier Energies Ltd, a leading manufacturer of solar cells and panels, has attracted significant interest from investors. The IPO, which began on August 27, ends today.

Strong Demand for Premier Energies IPO

Premier Energies IPO has been oversubscribed, with strong demand evident in the subscription data. The IPO has received bids 6.61 times the number of shares available as of Wednesday, the second day of the bidding process. A total of 29.48 crore equity shares have been bid for against the 4.46 crore shares on offer, according to data from the NSE.

• Retail Investors: Subscribed 4.21 times
• Non-Institutional Investors: Subscribed 18.83 times
• Qualified Institutional Buyers (QIBs): Subscribed 1.40 times
• Employee Portion: Subscribed 6.62 times

Grey Market Premium (GMP)

Premier Energies shares are commanding a strong premium in the grey market. As of today, the grey market premium (GMP) for Premier Energies shares is ₹397 per share. This indicates that the shares are trading at ₹846 each in the grey market, which is 88% higher than the issue price of ₹450 per share.

Should You Subscribe?

Premier Energies is the second-largest integrated solar manufacturer in India, with a significant production capacity. As of March 31, 2024, the company has an annual capacity of 2 GW for solar cells and 4.13 GW for solar modules. For the fiscal year 2024, Premier Energies reported revenues of ₹3,143.7 crore, with a compound annual growth rate (CAGR) of 105% since fiscal year 2022. The company also has a robust order book worth ₹5,926.5 crore as of July 31, 2024.

Most analysts recommend subscribing to the Premier Energies IPO for long-term investment, citing the company’s reasonable valuation compared to its peers and its strong position in the solar energy sector. For instance, BP Equities suggests a “Subscribe” rating for medium to long-term investment, noting that the company’s price-to-earnings (PE) ratio of 82.1x at the upper price band is fair given its strategic investments and financial recovery.

Similarly, Geojit Financial Services acknowledges that while the PE ratio of 88x for FY24 at the upper price band of ₹450 might seem expensive, the company’s experience, backward integration strategies, export market exposure, and potential opportunities in domestic manufacturing make it a worthwhile investment for the medium to long term.

Premier Energies IPO Details

• Subscription Period: August 27 to August 29
• IPO Allotment Date: Expected on August 30
• IPO Listing Date: September 3
• Price Band: ₹427 to ₹450 per share
• Funds to be Raised: ₹2,830.40 crore
  • Fresh Issue: 2.87 crore shares worth ₹1,291.40 crore
  • Offer for Sale: 3.42 crore shares aggregating to ₹1,539.00 crore

Premier Energies shares will be listed on both the BSE and NSE. Kotak Mahindra Capital, J.P. Morgan India, and ICICI Securities are the lead managers for the IPO, while Kfin Technologies Limited is the registrar.