After a smooth first day, Premier Energies’ initial public offering (IPO) was already subscribed three times by the second day of the bidding process due to strong demand from private and non-institutional investors.

The subscription period for this issue began on August 27 and ends on August 29.

As of 11am, the issue was subscribed eight times by the non-institutional investors (NII) category. The retail investors category was subscribed almost 2.5 times, while the qualified institutional buyers subscribed 4% of the issue.

The current grey market premium (GMP) for Premier Energies is Rs 390, which represents a premium of 86.7% in the unlisted market.

The IPO will comprise a fresh issue of equity shares aggregating Rs 1,291 crore and an offer for sale (OFS) of up to 3.42 million equity shares by the selling shareholders. Under the offer for sale, South Asia Growth Fund II Holdings LLC will sell 2.68 million equity shares, South Asia EBT Trust will sell 172,600 equity shares and promoter Chiranjeev Singh Saluja will sell 7,200,000 equity shares. Approximately 50% of the offer will be reserved for QIB investors, 35% for retail investors and the remaining 15% for non-institutional investors.Price range for Premier Energies IPO

The company has fixed a price band of Rs 427 to Rs 450 per share, with investors able to bid on 33 shares in one lot.

Also read: NSE plans to resubmit NOC to conduct Rs 30,000 crore IPO

Premier Energies IPO

Most analysts advised investors to participate in the IPO as the company has a diversified customer base with relationships both in India and abroad. The company also has a strong order book of Rs 5,926 crore.

“At a higher price point, PEL demands an EV/sales multiple of 4.8x, which looks attractive given the prevailing valuation of a single listed peer (which is loss-making). Hence, we assign a SUBSCRIBE rating to the issue,” Choice Broking said.

“The company’s strategic investments, strong financial recovery and large order book mean it is well positioned to capitalise on growth opportunities in the solar energy sector. We therefore recommend a ‘Subscribe’ rating for medium to long-term investment,” said BP Wealth.

Further details
The Company intends to use the net proceeds to invest in its subsidiary Premier Energies Global to partially fund the establishment of a 4 GW Solar PV TOPCon cell and 4 GW Solar PV TOPCon module manufacturing facility in Hyderabad and the remainder will be used for general corporate purposes.

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

Premier Energies was the second largest integrated player in India at the end of fiscal year 2024, with an annual installed capacity of 2 GW for cell manufacturing and an annual installed capacity of 4.13 GW for module manufacturing. In fiscal year 2024, the company is the largest Indian exporter of solar cells to the United States.

As at the time of filing the RHP, the Company has five manufacturing plants, all located in Hyderabad, and operates its operations through eight subsidiaries in India and abroad.

India’s module manufacturing capacity reached about 72 GW in fiscal 2024, and while the current solar cell manufacturing capacity is 8.1 GW, it is expected to grow exponentially in the future as well.

India’s strong commitment to renewable energy, ambitious targets and favourable regulatory environment have attracted significant investments in solar energy projects and made India a major player in the global solar market.

Premier Energies Financial Performance
The company’s revenue from operations grew at a compound annual growth rate (CAGR) of 42.71% during the financial year 2021-2023. Revenue for the financial year 2024 grew by 120% to Rs. 3,143 crore. The company posted a profit of Rs. 231 crore in the financial year 2024 as against a loss of Rs. 133 crore in the previous year.

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