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Premier Energies Limited is the 2nd largest integrated solar cell and solar module manufacturer in India Premier Energies IPO is set to raise Rs 2,830.40 crores. The issue is a combination of fresh issue of and offer for sale.

About Premier Energies IPO:

• The Company was originally incorporated as “Premier Solar Systems Pvt. Ltd” in April 1995, at Andhra Pradesh. Subsequently on conversion to public limited company, the name was changed to “Premier Energies Ltd” in September 2019. The company is an integrated solar cell and module manufacturer. In addition, to manufacturing solar cells and modules, the company provides engineering, procurement and construction solutions, operations and maintenance services and operates as an independent power producer.
• Premier Energies is the 2nd largest integrated solar cell and solar module manufacturer in India as well as it is 2nd largest solar cell manufacturer in terms of annual installed capacity as of March 31, 2024. The company has an aggregate annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules. Further, the company is the largest solar cell exporter to the US market in FY2024. The company exported US$ 31.2 million worth of solar cells to the US in FY2024.
• The company has 5 manufacturing facilities all located in Hyderabad, Telangana, India, and it conduct its operations through 8 subsidiaries in India and overseas.
• The promoters of the company are Surender Pal Singh Saluja and Chiranjeev Singh Saluja.

Financials : Premier Energies IPO

Anchor: Premier Energies IPO

Premier Energies Ltd raised Rs 846 crore from 60 funds towards its anchor book. Nomura Funds, Abu Dhabi Investment Authority, HDFC Mutual Fund (MF), ICICI Prudential MF, Axis MF, Kotak MF, Nippon India MF, Sundaram MF and UTI MF are among the anchor investors.

Salient Points: Premier Energies IPO

• Annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules.
• 85% of OS is exit by PE player. South Asia Growth Fund II Holdings LLC which will divest 2.68 crore shares, South Asia EBT will offload 1.72 lakh shares and promoter Chiranjeev Singh Saluja will sell 72 lakh shares.
• Proceeds from the fresh issue to the extent of Rs 968.6 crore will be allocated for investment in the company’s 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. Remaining funds will be used towards general corporate purposes.
• The company’s key customers across its business offerings include several IPPs, OEMs and off-grid operators such as NTPC, TATA Power Solar Systems, Panasonic Life Solutions, Continuum, Shakti Pumps, First Energy, Bluepine Energies, Luminous, Hartek Solar, Green Infra Wind Energy (a subsidiary of Sembcorp Green Infra), Madhav Infra Projects, SolarSquare Energy and Axitec Energy India.
• As on July 31,2024 the company had an order book of ₹ 5,926.56 Cr of which ₹ 1,609.11 Cr was in relation to non-DCR solar modules, ₹ 2,214.06 Cr was in relation to DCR solar modules, ₹ 1,891.12 Cr was in relation to solar cells and ₹ 212.72 Cr was in relation to EPC projects.
• The company’s revenue from operations increased at a CAGR of 105.72% from ₹ 742.87 Cr in FY2022 to ₹ 3,143.79 Cr in FY 2024. The company’s EBITDA margin improved from 7.01% in FY2022 to 15.93% in FY2024. The company’s Profit stood at ₹ 231.36 Cr in FY2024 from a Loss of ₹ 14.41 Cr in FY2022.
• Will like to get into wafer and polysilicon technologies. in future.
• Solar cell manufacturing is its core 90% of cells manufactured from India to US are from Premier Energies.
• US accounts for 20% of their market. Looks at US market as an opportunity.
• Will be setting up a plant in US with a leading partner Heliene USA for TOPCon cells.as joint venture.
• In Fy24 sale of manufactured goods accounted for 86.80% [solar cells 22.48% and solar modules 64.32%], traded goods stood at 8.21% solar accessories 0.54%], income from contracts 4.73%, and other operating revenue 0.14% .
• Technology obsolescence is big risk for the rapidly developing solar energy sector. Promoters has been in this business for29 year sand have seen many technology changes and successfully upgraded. In 2022 the company transitioned from polycrystalline solar cells to monocrystalline PERC solar. Now it further plans to transition towards the manufacturing of TOPCon solar cells given the even greater efficiencies afforded by these cells.
• New facility coming at Hyderabad is an.Integrated facility. Company plans to commission a new 1,000 MW annual installed capacity production line for the production of solar cells using TOPCon technology in 2025.
• Company has added considerable capacity in last 2-3 year resulting in good growth in revenues.
• will be quadrupling their solar cell manufacturing and doubling module manufacturing.
• Good support from IREDA for last 25 years for expansion plans.
• The company’s revenue from operations increased at a CAGR of 105.72% from ₹ 742.87 Cr in FY2022 to ₹ 3,143.79 Cr in FY 2024. The company’s EBITDA margin improved from 7.01% in FY2022 to 15.93% in FY2024. The company’s Profit stood at ₹ 231.36 Cr in FY2024 from a Loss of ₹ 14.41 Cr in FY2022.
• Clocked 22% EBIDTA margin in Q1FY25.
• All contracts signed with customers are on price variation clause.
• 2nd largest integrated solar cell and solar module manufacturer in India
• Peers: Peer Websol Energy Systems, a small player with lower installed capacity of 0.55 GW of solar modules and 0.60 GW solar cell has just turned the corner and it quoting at higher valuations. ( EV/ sales)
• P/E ratio stands at 25.7x ( FY25 annualized based on Q1FY25)
• I intend to apply in Premier Energies IPO. Unlike many other it is an integrated player i.e. backward integrated with production of both solar cells and modules. . Good amount of protection for local manufacturers as well as integrators in the solar field. Govt policies are creating a big pull for the solar industry. Company has large clients like NTPC, Tata and is largest exporter of cells to USA.
• GMP as reported on social media has been Rs. 358 (79%)
• This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.