Premier Energies IPO Set to Open Tomorrow: GMP Hints at High Demand Amid Strong Market Buzz

The initial public offering (IPO) of Premier Energies, a Hyderabad-based company, is scheduled to open for subscription tomorrow and will remain open until August 29. Before the IPO, the company’s shares are trading at a grey market premium (GMP) of ₹336 in the unlisted market, indicating strong demand.

Significant Premium Over Issue Price

Based on the upper price band of ₹450 per share, the stock is trading at a premium of 74.67% compared to the issue price. However, it’s important to remember that grey market premiums are just early indicators of investor sentiment and can change quickly.

Details of the IPO

The IPO includes a fresh issue of equity shares worth up to ₹1,291 crore and an Offer for Sale (OFS) of up to 3.42 crore shares by existing shareholders. In the OFS, South Asia Growth Fund II Holdings LLC will sell 2.68 crore shares, South Asia EBT Trust will sell 1,72,600 shares, and promoter Chiranjeev Singh Saluja will divest 72 lakh shares.

Use of Funds

The company plans to use the net proceeds from the IPO to invest in its subsidiary, Premier Energies Global, to help fund the construction of a 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module manufacturing facility in Hyderabad. The remaining funds will be used for general corporate purposes.

Premier Energies’ Market Position

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. The company was also the top Indian exporter of solar cells to the US in FY24.

Expanding Manufacturing Capacity

Premier Energies operates five manufacturing facilities in Hyderabad and runs operations through eight subsidiaries in India and overseas. As of FY2024, India’s module manufacturing capacity reached around 72 GW, while the solar cell manufacturing capacity was 8.1 GW, with significant growth expected in the coming years.

Strong Financial Performance

Premier Energies has shown strong financial growth, with its revenue increasing at a compounded annual growth rate (CAGR) of 42.71% from FY21 to FY23. For FY24, the company’s revenue surged by 120% to ₹3,143 crore, with a profit of ₹231 crore, a significant improvement from a loss of ₹13.3 crore in the previous year.

Lead Managers for the IPO

Kotak Investment Banking, JPMorgan, and ICICI Securities are the book-running lead managers for the Premier Energies IPO.