Premier Energies IPO
Discover the detailed review of the Premier Energies IPO, including company background, objectives, issue details, financial performance, and investment recommendations. Premier Energies is a leading integrated solar cell and module manufacturer in India looking to raise funds through its initial public offering.
About Premier Energies
Premier Energies Ltd. (PEL) is an integrated solar cell and solar module manufacturer with 29 years of experience in the solar industry. The company's business operations include:
1
Solar Cell Manufacturing
Manufacturing of solar photovoltaic (PV) cells, particularly bifacial monocrystalline PERC cells using the M10 wafer size in a 182mm x 182mm format.
2
Solar Module Manufacturing
Manufacturing of solar modules using different technologies like monocrystalline PERC and TOPCon, with various cell sizes, power outputs and formats.
3
Custom Solar Products
Sale of customizable and ad hoc solar-related products based on customer requirements, such as customized bespoke solar tiles.
4
EPC and O&M Services
Execution of EPC projects for various solar power systems and provision of O&M services for executed projects.
Manufacturing Capabilities
Premier Energies has five manufacturing facilities, all situated on owned land in Hyderabad, Telangana, India. Key details include:
Current Capacity
Combined annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules.
Expansion Plans
Steps taken to increase annual installed capacity for solar cells by commissioning a 1,000 MW TOPCon solar cell line in Unit II, expected to be ready within Fiscal 2025.
Future Growth
Plans to utilize IPO proceeds to further expand manufacturing capacities by commissioning an additional 4 GW TOPCon solar cell line and 4 GW TOPCon solar module line.
OBJECTIVES OF THE ISSUE DETAILS
Expansion of Manufacturing Capabilities
Premier Energies plans to invest a portion of the funds raised to establish a new 4 GW solar PV TOPCon cell and module manufacturing facility in Hyderabad, Telangana, through its subsidiary, Premier Energies Global Environment Private Limited.
Enhancement of General Corporate Operations
The remaining funds will be allocated to general corporate purposes, including administrative costs, operational improvements, marketing initiatives, and potential debt reduction. This flexible capital allocation will ensure Premier Energies can efficiently manage its operations and capitalize on growth opportunities.
IPO Details
Premier Energies is launching its maiden IPO with the following key details:
Premier Energies IPO Timeline
1
IPO Open Date
Tuesday, August 27, 2024, marks the opening of the IPO for Premier Energies, with the issue remaining open for three days.
2
IPO Close Date
Thursday, August 29, 2024, signifies the closing of the IPO, ending the period for investors to apply for shares.
3
Basis of Allotment
The allotment of shares to successful applicants is determined on Friday, August 30, 2024, following the closing of the IPO.
4
Initiation of Refunds
Refunds for unsuccessful applications are initiated on Monday, September 2, 2024, after the allotment process is complete.
5
Credit of Shares to Demat
Shares are credited to the Demat accounts of successful applicants on Monday, September 2, 2024, making them ready for trading.
6
Listing Date
Tuesday, September 3, 2024, marks the official listing date of Premier Energies on the BSE and NSE, allowing trading to commence.
Financial Performance
FY22
Total income: Rs. 767.03 cr. | Net loss: Rs. 14.41 cr.
FY23
Total income: Rs. 1463.21 cr. | Net loss: Rs. 13.31 cr.
FY24
Total income: Rs. 3171.31 cr. | Net profit: Rs. 231.36 cr.
Q1 FY25
Total income: Rs. 1668.79 cr. | Net profit: Rs. 198.16 cr.
Valuation and Pricing
The IPO pricing appears aggressive based on various metrics:
- P/BV of 23.24 based on NAV of Rs. 19.36 as of June 30, 2024
- P/BV of 9.62 based on post-IPO NAV of Rs. 46.78 per share
- P/E of 25.60 based on FY25 annualized earnings
- P/E of 87.72 based on FY23 earnings
The company has shown improving profitability, with PAT margins increasing from -1.88% in FY22 to 11.87% in Q1-FY25.
Investment Recommendation
Strengths
Leading player in integrated solar cell and module manufacturing with 29 years of experience. Strong recent financial performance and growth trajectory.
Opportunities
Expanding manufacturing capacity to capitalize on growing demand for solar energy in India. Government support and ambitious renewable energy targets.
Valuation
Aggressively priced based on current financials, but potential for future growth. May be suitable for long-term investors.
Recommendation
Well-informed investors may consider subscribing for the long term, given the company's growth prospects in the renewable energy sector.
Additional Information
Key points to note:
- The company has not declared any dividends for the reported periods but has adopted a dividend policy in February 2024.
- Premier Energies has shown Websol Energy System as its listed peer, trading at a P/E of 497 (as of August 23, 2024).
- The three Book Running Lead Managers for this IPO have handled 62 public issues in the past three fiscals, with 14 issues closing below the offer price on the listing date.
Disclaimer: The review is based on the Red Herring Prospectus and other available documents. Investors should consult a qualified financial advisor before making investment decisions.