What You Must Know About Premier Energies IPO: Price Band ₹427 to ₹450 Per Share

Premier Energies Limited, founded in April 1995, produces solar panels and integrated solar cells. The company offers cell, Solar Module, Monofacial Module, Bifacial Module, EPC Solutions, and O&M Solutions. The company is based in Hyderabad, Telangana, India, and operates five production facilities.

NTPC, TATA Power Solar Systems Limited, Panasonic Life Solutions Private Limited ("Panasonic"), Continuum, Shakti Pumps, First Energy, Bluepine Energies Private Limited, Luminous, Hartek Solar Private Limited ("Hartek"), Green Infra Wind Energy Limited (a Sembcorp Green Infra Limited subsidiary), Madhav Infra Projects Limited ("Madhav"), SolarSquare Energy Private Limited ("SolarSquare"), and Axitec Energy India Private Limited ("Axitec").

As of July 31, 2024, the corporation had a 59,265.65 million order book. This total comprised 2,122.72 million for EPC projects,16,091.14 million for non-DCR solar modules, 22,140.60 million for DCR solar modules, and 18,911.18 million for solar cells.

The company has exported its goods to the United States, Hong Kong, South Africa, Bangladesh, Norway, Nepal, France, Malaysia, Canada, Sri Lanka, Germany, Hungary, United Arab Emirates, Uganda, Turkey, South Korea, China, Taiwan, and the Philippines. The enterprise employed 1,447 full-time and 3,278 contract laborers as of June 2024.
 

The Objective of the Issue

• Investment in Subsidiary for Solar PV Manufacturing Facility: Premier Energies plans to use a portion of the IPO proceeds to invest in its subsidiary, Premier Energies Global Environment Private Limited. This investment will partially finance the establishment a 4 GW Solar PV TOPCon Cell and Module manufacturing facility in Hyderabad, Telangana, enhancing the company's production capabilities in the renewable energy sector.
• General Corporate Purposes: The remaining IPO funds will be allocated for general corporate purposes, including administrative expenses, operational enhancements, marketing efforts, and potential debt reduction. This flexible use of funds ensures Premier Energies can maintain smooth operations and capitalise on new growth opportunities.

Highlights of Premier Energies IPO

Premier Energies IPO is set to launch with a fixed price issue of ₹2,830.40 crores. The issue comprises a fresh issue of 2.87 lakh shares and an offer for sale of 3.42 crore, which will aggregate to ₹1,539.00 crores. Here are the key details of the IPO:

• The IPO opens for subscription on 27th August 2024 and closes on 29th August 2024.
• The allotment is expected to be finalised on 30th August, 2024.
• Refunds will be initiated on 2nd September 2024.
• Credit shares to Demat accounts are also expected on 2nd September 2024.
• The company will tentatively list on BSE SME on 3rd September 2024.
• The price band is set at ₹427 to ₹450 per share.
• The lowest lot size for the IPO application is 33 shares.
• Retail investors need to invest a minimum of ₹14,850.
• The minimum investment for sNII and bNII is 14 lots (462 shares), amounting to ₹207,900 and 68 lots (2,244 shares), amounting to ₹1,009,800.
• Kotak Mahindra Capital Company Limited, J.P. Morgan India Private Limited and ICICI Securities Limited are the book-running lead managers for the IPO.
• Kfin Technologies Limited serves as the registrar.

Premier Energies IPO - Key Dates

Here is the timeline for the Premier Energies IPO:

Premier Energies IPO Issue Details/Capital History

Premier Energies's book-built IPO is priced at ₹ 2,830.40 crores. The issue consists of an offer to sell 3.42 crore shares, valued at ₹ 1,539.00 crores, and a fresh issue of 2.87 crore shares, totalling ₹ 1,291.40 crores.

The subscription period for Premier Energies IPO begins on 27th August 2024 and ends on 29th August 2024. The allocation is anticipated to be completed on 30th August 2024. Moreover, 3rd September 2024 has been set as the provisional listing date for Premier Energies IPO on the BSE and NSE.
 

Premier Energies IPO Allocation & Minimum Investment Lot Size:

Here is the allocation for the Premier Energies IPO:

Investors are required to submit a minimum bid of 33 shares, with the option to bid for additional shares in multiples of this figure. The following table outlines the minimum and maximum investment amounts for retail investors and high-net-worth individuals (HNI), expressed in shares and corresponding financial amounts.

SWOT Analysis: Premier Energies IPO

Strengths:

• Established Expertise in Renewable Energy: Premier Energies has a strong track record in the renewable energy sector, particularly in solar PV manufacturing, which positions it well for future growth.
• Strategic Investment in Advanced Technologies: The planned 4 GW Solar PV TOPCon Cell and Module manufacturing facility will enhance production capacity and efficiency, leveraging cutting-edge technology.
• Strong Market Demand: Increasing global focus on renewable energy sources, particularly solar, provides a robust market demand for Premier Energies' products.
   

Weaknesses:

High Capital Expenditure: Establishing the new manufacturing facility requires substantial capital investment, which could strain financial resources and impact short-term profitability.
Dependence on Regulatory Support: The company’s success is closely tied to government policies and incentives for renewable energy, which can fluctuate and affect business operations.
Operational Complexity: Managing a large-scale, technologically advanced manufacturing facility can be complex and requires significant operational expertise.

Opportunities:

Growing Demand for Solar Energy: With an increasing global emphasis on sustainable energy, a rising demand for solar PV products offer significant growth potential.
Expansion into New Markets: The new facility enables Premier Energies to scale its operations and potentially enter new geographical markets, boosting revenue and market share.
Technological Advancements: Continuous innovation in solar technology presents opportunities for Premier Energies to enhance its product offerings and improve efficiency.

Threats:

Market Competition: The solar energy sector is highly competitive, with many players vying for market share, which could pressure pricing and margins.
Economic Fluctuations: Global economic instability could impact the demand for solar energy products, affecting sales and profitability.
Supply Chain Disruptions: The company relies on a global supply chain for raw materials and components, which could be vulnerable to disruptions, affecting production timelines and costs.

Financial Highlights: Premier Energies Limited

Below are the financial results covering the quarter ending June 2024 and the fiscal years FY23 and FY22:

Premier Energies Limited's financial highlights show significant improvement over recent years. As of June 30, 2024, the company’s total assets increased to ₹3,735.5 crore, up from ₹2,110.69 crore in March 2023 and ₹1,341.49 crore in March 2022, indicating strong asset growth. Revenue for the quarter ending June 2024 was ₹1,668.79 crore, a notable increase from ₹1,463.21 crore in March 2023 but slightly lower than ₹3,735.5 crore in March 2022.

The company turned profitable in June 2024, with a Profit After Tax (PAT) of ₹198.16 crore, recovering from losses of ₹13.34 crore in March 2023 and ₹14.41 crore in March 2022. The net worth also improved to ₹26.96 crore in June 2024, reversing negative values in the previous years. Reserves and Surplus increased to ₹255.73 crore, while total borrowing rose to ₹1,200.16 crore, reflecting increased financial leverage to support growth.