Premier Energies IPO - Investment Rationale, Issue Details, Financials, Peer Comparison, Risks: Anand Rathi

Anand Rathi Research Report

Premier Energies Ltd. will launch its initial public offering tomorrow for subscription and close on Aug. 29. The manufacture of integrated solar cell and solar panel has fixed the price band in the range of Rs 427 to Rs 450 Apiece. The minimum bid size for the IPO is 33 shares.

The Rs 2,830.4 crore IPO consists of a fresh issue of Rs 1,291.4 crore and an offer-for-sale of 3.4 crore shares, aggregating to Rs 1,539 crore.

Object of fresh issue:

• Investment in the Subsidiary, Premier Energies Global Environment Pvt. Ltd. for part-financing the establishment of a 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module manufacturing facility in Hyderabad, Telangana, India (the “Project”).

• General corporate purposes.

Valuation and Outlook

As of March 31, 2024, Premier Energies is rank as the second-largest integrated solar cell and module manufacturer in India and also hold the position of the country's second-largest solar cell producer by annual installed capacity.

Their total annual installed capacity stands at 2 GW for solar cells and 4.13 GW for solar modules. They are involved in multiple stages of the solar power value chain, ranging from manufacturing solar cells and modules to offering EPC solutions, operation and maintenance services, and operating as an independent power producer.

The company's P/E ratio is 87.7 times based on its FY24 earnings, though if we annualize the FY25 earning the P/E ratio comes down significantly to 25.5 times.

Based on FY24 earnings it has a market cap-to-sales ratio of 6.4 times. We believe that the company is well positioned for future growth due to its strong market position, well diversified customer base along with high technical expertise. Therefore, we recommend “Subscribe – Long Term” rating to the IPO.

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