Premier Energies IPO - Investment Rationale, Strategies, Strengths, Financials, Risks And More: DRChoksey

DRChoksey Research Report

Premier Energies Ltd. launched its initial public offering today 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.

Outlook and Valuation:

Premier Energies is a leading player in India’s solar manufacturing sector and the second-largest integrated manufacturer of solar cells and modules in the country, with a capacity of 2 GW for solar cells and 4.13 GW for modules.

The company has shown strong performance with a 105% CAGR in revenue from FY 2022 to FY 2024, achieving a ROE of 44% and a ROCE of 26% in FY24.

Strategic initiatives such as expanding into TOPCon technology and wafer production, alongside benefiting from India’s favorable domestic content requirements, position Premier Energies to capitalize on the growing solar energy market.

With India targeting 500 GW of non-fossil fuel capacity by 2030 and expanding export opportunities to markets like the USA, Premier Energies plans to add a 1 GW TOPCon solar cell manufacturing plant by FY25 and further expand with an additional 4 GW TOPCon solar cell line and 4 GW TOPCon solar module line.

A robust order book of Rs 59,266 million across DCR and non-DCR solar modules, solar cells, and EPC projects provides strong growth visibility for the near to medium term.

The company is valued at a price/earning multiple of 87.7 times FY24 adjusted EPS , which is in line with or cheaper than its some of the similar companies, leading us to assign a Subscribe rating for the IPO of Premier Energies.

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