Premier Energies is launching an initial public offering (IPO) valued at ₹2,830.40 crore, which will be available for subscription starting Tuesday, August 27. This mainboard IPO plans to raise approximately ₹2,830.40 crore through a combination of fresh equity issuance and an offer for sale.
Here are the key details of the Premier Energies IPO:
Premier Energies IPO
Premier Energies is set to launch its initial public offering (IPO) on Tuesday, aiming to raise Rs 2,830.40 crore.
The IPO will feature a book-built issue, consisting of a fresh issuance of 2.87 crore shares worth Rs 1,291.40 crore, alongside an offer for sale of 3.42 crore shares totaling Rs 1,539 crore.
The subscription window for Premier Energies’ IPO will be open from August 27, 2024, to August 29, 2024, with a price range of Rs 427 to Rs 450 per share.
Investors can participate with a minimum lot size of 33 shares, requiring a retail investment of Rs 14,850. Small non-institutional investors (sNII) must invest in a minimum of 14 lots (462 shares) costing Rs 207,900, while large non-institutional investors (bNII) need to purchase at least 68 lots (2,244 shares), totaling Rs 1,009,800.
The IPO allotment is expected to be finalized on August 30, 2024, with shares likely to be listed on the BSE and NSE on September 3, 2024.
Kotak Mahindra Capital, J.P. Morgan India, and ICICI Securities are the lead managers for the IPO, with Kfin Technologies acting as the registrar.
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Premier Energies IPO Dates
The following table outlines the important dates and events for the Premier Energies IPO, including the subscription period, share allotment, refund processing, and listing on the stock exchanges.
| Premier Energies IPO Dates | |
|---|---|
| Event | Date |
| IPO Opens for Subscription | Tuesday, August 27 |
| IPO Closes for Subscription | Thursday, August 29 |
| Share Allotment Finalized | Friday, August 30 |
| Refunds Processed | Monday, September 2 |
| Shares Listed on BSE/NSE | Tuesday, September 3 |
Premier Energies IPO Registrar and Lead Managers
KFin Technologies is serving as the registrar for the Premier Energies IPO, with Kotak Mahindra Capital Company, JP Morgan India Private Limited, and ICICI Securities acting as the book-running lead managers for the offering.
Premier Energies IPO Price Band and Minimum Lot Size
The company has set a price band of ₹427 to ₹450 per share, with a face value of ₹1. Retail investors need to purchase a minimum lot of 33 shares, requiring a minimum investment of ₹14,850.
Premier Energies IPO Objectives
The company intends to use the net proceeds from the Fresh Issue, after covering the offer-related expenses, for two key purposes:
- Investing in its subsidiary, Premier Energies Global Environment Private Limited, to help fund the development of a 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module manufacturing plant in Hyderabad, Telangana, India.
- General corporate purposes.
Rajan Shinde, a Research Analyst at Mehta Equities Ltd, highlighted that Premier Energies Ltd’s IPO offers investors a chance to invest in India’s second-largest integrated solar cell and module manufacturer.
The company has a strong annual capacity of 2 GW for solar cells and 4.13 GW for modules, positioning it well to benefit from the increasing demand for renewable energy.
Shinde mentioned, “We believe the company’s planned expansion into TOPCon solar cells by 2025, along with its expertise in high-efficiency monocrystalline PERC technology, demonstrates its commitment to innovation and market leadership. Additionally, Premier’s robust order book of Rs. 5,926.56 crore, including major contracts with key players like NTPC and long-term supply agreements, further strengthens its growth potential.”
Financially, the company has shown remarkable improvement, with operational revenues increasing by 92.3% in FY 2023 and an impressive 120.1% in FY 2024. Net profit also jumped to Rs. 231.40 crore in FY 2024, a significant turnaround from a loss of Rs. 14.4 crore in FY 2022.
Premier Energies IPO Risk Factors
The following are the risk factors for Premier Energies IPO:
Dependence on a Limited Customer Base
The company’s revenue is heavily reliant on a small number of clients. In fiscal 2024, the top 10 customers accounted for 67% of total revenue, down from 75% in fiscal 2023. However, in the June 2024 quarter, these customers contributed to 81% of the overall revenue.
Reliance on Two Main Products
The business primarily depends on the performance of two products: solar cells and solar modules. In fiscal 2024, solar cells contributed 22.5% to the revenue, an increase from 13% in fiscal 2023. Solar modules remained the major contributor, making up 64% of the revenue.
Exposure to Market Changes
The company’s success is tied to the demand for solar cells and modules made using monocrystalline technology. Fluctuations in this demand could significantly impact the business.
Geographical Concentration
All manufacturing operations are based in Telangana, which could pose risks related to geographical concentration.
Negative Cash Flow
The company experienced a negative cash flow of ₹41 crore in the three months ending June 30, 2024, and there is a possibility of continued negative cash flows in the future.
Decline in Production Capacity
There has been a noticeable drop in both actual production and the annual installed capacity of solar modules over the past three fiscal years, including the quarter ending June 30, 2024.
Compliance Issues
The company has faced fines in the past for not complying with certain provisions of the FEMA Act.
Intense Competition
The company faces stiff competition from Indian manufacturers like Mundra Solar, Waaree Energies, and Renew-Sys, as well as from Chinese and Southeast Asian manufacturers. While Chinese products are subject to customs duties, products from other ASEAN countries are exempt.
Dependence on Government Projects
The company heavily relies on projects awarded by government undertakings and public sector units (PSUs) for its business.
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Premier Energies IPO FAQs
Q.1. When does the Premier Energies IPO open and close for subscription?
Ans. The Premier Energies IPO opens on August 27, 2024, and closes on August 29, 2024.b
Q.2. What is the price range for Premier Energies’ IPO?
Ans. The price band for the Premier Energies IPO is set between ₹427 and ₹450 per share.
Q.3. What minimum investment is required for Premier Energies’ IPO retail investors?
Ans. Retail investors need to purchase a minimum lot of 33 shares, requiring an investment of ₹14,850.
Q.4. What are the objectives of Premier Energies’ IPO?
Ans. The funds raised will be used for investing in a new solar PV manufacturing plant and general corporate purposes.
Q.5. Who are the lead managers for the Premier Energies IPO?
Ans. The lead managers for the IPO are Kotak Mahindra Capital, J.P. Morgan India, and ICICI Securities.
