Premier Energies IPO - Valuation, Strengths, Risks, Financials And More: Reliance Securities

Reliance Securities Report

Premier Energies Ltd. launched its initial public offering today for subscription and closes 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 the Issue

• Financing the capital expenditure of new units and upgradation of new subsidiaries.

• General corporate purposes

Strengths

• 29 years of solar industry experience with track record of capacity and product enhancement.

• Diverse customer base and longstanding relationships with key customers within India and overseas.

• Experienced Promoter-led senior management team.

• High Entry barriers providing insulation against new entrants.

Key Risks

• Top five customers contribute 45 % and failure in any of these customers could dent revenues.

• Sharp increase in input costs could dent margins.

Our View

Premier Energies has a long track record in the solar module manufacturing sector and experience in solar cell production with 2.0 GW annual installed capacity which represents 28% share of India’s total capacity in FY24 PEL has developed India’s first solar manufacturer to develop a bifacial monocrystalline PERC solar cell based on the M10–182 mm x 182 mm format in FY22.

Premier Energies has a diversified customer base with customer relationships both within India and overseas with a strong order book of Rs 5,926 crore, relationships in a wide range of markets capturing overseas revenues, strong growth with consistent profitability over the past few years. Hence, we recommend a Subscribe to the issue.

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