Premier Energies IPO Launches Tomorrow: Key Details and Price Band Insights
News Mania Desk/Agnibeena Ghosh/26th August 2024
Premier Energies is set to launch its Initial Public Offering (IPO) on August 27, aiming to raise a substantial ₹2,830.40 crore. The IPO will feature a price band ranging from ₹427 to ₹450 per share, with investors required to buy shares in minimum lots of 33. This translates to an initial investment of ₹14,850 for retail investors.
The IPO comprises a fresh issue of 2.87 crore shares valued at ₹1,291.40 crore and an offer for sale of 3.42 crore shares worth ₹1,539.00 crore. This mainboard issue represents a significant opportunity for investors, combining new equity with a substantial offer from existing shareholders. The registration for the IPO is managed by KFin Technologies, while Kotak Mahindra Capital Company, JP Morgan India Private Limited, and ICICI Securities serve as the book-running lead managers.
Premier Energies plans to use the proceeds from the IPO to invest in its subsidiary, Premier Energies Global Environment Private Limited. The funds will support the development of a 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module manufacturing facility in Hyderabad. Additionally, a portion of the funds will be allocated to general corporate purposes.
The company operates five manufacturing facilities in Hyderabad, producing integrated solar cells and modules. It boasts an annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules. With the solar energy sector’s optimistic growth outlook, Premier Energies is well-positioned to capitalize on the increasing demand for renewable energy.
The sector’s long-term prospects are bright, with forecasts indicating that nearly 75 percent of electricity will be generated from renewable sources by 2050. In India, renewables accounted for 20.7 percent of electricity generation in FY24. The Indian government aims to meet 50 percent of the country’s energy needs with renewable sources by 2030, aligning with climate commitments made at COP-26.
Premier Energies has shown impressive financial performance. Its revenue from operations has grown steadily from ₹7,428.71 million in FY22 to ₹31,437.93 million in FY24. For Q1FY25, the company reported revenue of ₹16,573.67 million, a significant increase from ₹6,110.23 million in the same quarter the previous year. After a loss in FY22 and FY23, the company returned to profitability with ₹2,313.60 million in FY24, and a Q1FY25 profit of ₹1,981.60 million, up from ₹313.29 million year-on-year.
Investors should be aware of potential risks, including the company’s reliance on a limited number of customers and the dependence on the success of its solar cell and module products. The company also faces substantial working capital requirements.
As of the latest information, the grey market premium (GMP) for Premier Energies’ IPO stands at ₹336, suggesting a potential listing price of ₹786. This reflects a premium of 74.67 percent over the upper end of the price band. The strong GMP indicates robust investor interest and anticipated positive performance upon listing.
With the IPO opening on August 27 and closing on August 29, potential investors should prepare for significant activity and monitor updates closely as the company approaches its public debut.
