Premier Energies Limited Company Business Profile
Established in 1995, Premier Energies has become India's second-largest integrated solar cell and solar module manufacturing company as of March 31, 2023. Their manufacturing units are spread across five locations in Hyderabad, Telangana, India, with annual installed capacity of 2 GW for solar cells and 3.36 GW for solar modules. Seeing healthy demand on the horizon, the company in order keep up with its market shares has taken steps toward increase their annual installed capacity for solar modules by commissioning a 1,034 MW solar module line in Unit V, and a 1,000 MW TOPCon solar cell line in Unit II.
Since Fiscal 2017, India's solar module manufacturing capacity has increased substantially, from 4.2 GW to 39.5 GW at the end of Fiscal 2023 at a compounded annual growth rate of 45.3%. The capacity has further increased to 60 GW in Fiscal 2024 and may cross 100 GW by Fiscal 2028.
Premier Energies Limited IPO Details:
| IPO Open Date | August 27, 2024 |
| IPO Close Date | August 29, 2024 |
| Basis of Allotment | August 30, 2024 |
| Listing Date | September 3, 2024 |
| Face Value | ₹1 per share |
| Price | ₹427 to ₹450 per share |
| Lot Size | 33 Shares |
| Total Issue Size | Up to 62,897,777 Equity Shares |
| (aggregating up to ₹2,830.40 Cr) | |
| Fresh Issue | Up to 28,697,777 Equity Shares |
| (aggregating up to ₹1,291.40 Cr) | |
| Offer For Sale | Up to 34,200,000 Equity Shares |
| (aggregating up to ₹1,539.00 Cr) | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not less than 50% of the Net Issue |
| Retail Shares Offered | Not more than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not more than 15% of the Net Issue |
Premier Energies Limited IPO Issue Price & Size
Total issue size of Premier Energies IPO is about Rs. 2,830.40 Cr., which includes offer for sale and fresh issue. As per the prospectus, Premier Energies IPO fresh Issue size will be around Rs 1,291.40 crores, and promoters will sell around 34,200,000 equity shares.
As per the prospectus, Premier Energies IPO fresh Issue size will be around Rs 1500 crores, and promoters will sell around 28,200,000 equity shares.
Premier Energies Limited IPO Launch Date
The launch date of Premier Energies IPO has been announced for August 27, 2024. Premier Energies IPO will close on August 29, 2024 and the listing would be done on September 03, 2024.
Premier Energies Limited IPO Objective
The issue consists of both fresh issue and offer for sale by promoters.
- The prompter wishes to en-cash some money by selling shares up to 28,697,777 Equity Shares.
- The company want to invest fund received from fresh issue toward investment in subsidiary, Premier Energies Global Environment Private Limited 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”); and General corporate purposes.
Premier Energies Limited Financial Statement:
| Particulars | For the period ended December 31, 2023 | FY2023 | FY2022 | FY2021 |
| Revenue from operations | 20172.06 | 14285.35 | 7428.71 | 7014.58 |
| Other income | 155.56 | 346.78 | 241.62 | 347.77 |
| Total expenses | 20327.62 | 14632.12 | 7670.33 | 7362.35 |
| Cost of materials consumed | 15660.27 | 11105.19 | 3987.2 | 4768.23 |
| Purchases of stock-in-trade | 1291.44 | 1568.23 | 2281.31 | 519.68 |
| Changes in inventories and work-in-progress | -1867.17 | -934.07 | -397.93 | -80.83 |
| Contract execution expense | 8408.57 | 246.09 | 316.12 | 576.92 |
| Employee benefits expense | 401.69 | 448.09 | 246.38 | 196.73 |
| Finance cost | 759.93 | 686.27 | 430.03 | 216.56 |
| Depreciation and amortisation expenses | 590.46 | 532.33 | 276.01 | 116.41 |
| Other expense | 1344.25 | 1069.8 | 699.87 | 496.96 |
| Total expenses | 18589.44 | 14723.91 | 7838.99 | 6810.66 |
| Restated Profit / (Loss) for the period / year | 1274.02 | -133.36 | -144.08 | 258.07 |
| Basic EPS | 4.84 | -0.48 | -0.56 | 0.94 |
| Diluted EPS | 3.62 | -0.48 | -0.56 | 0.94 |
| Particulars | Nine months ended December 31, 2023 | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Revenue from operations | 20172.06 | 14285.34 | 7428.71 | 7014.58 |
| EBITDA | 3088.57 | 1128.81 | 537.38 | 884.66 |
| EBITDA Margin | 15.19% | 7.71% | 7.01% | 12.02% |
| Profit Before Tax | 1748.05 | -77.6 | -156.91 | 558.19 |
| PBT Margin | 8.60% | -0.53% | -2.05% | 7.58% |
| Profit after tax | 1274.02 | -133.36 | -144.08 | 258.07 |
| PAT Margin | 6.27% | -0.91% | -1.88% | 3.51% |
| ROE | 26.77% | -3.18% | -4.66% | 10.37% |
| ROCE | 15.99% | 5.94% | 3.63% | 14.47% |
Premier Energies Limited Promoters & Shareholders:
Surender Pal Singh Saluja and Chiranjeev Singh Saluja are the Promoters of Company. At the time of filing the DRHP, promoters in aggregate held 290,151,502 Equity Shares, constitutes 68.75% on a fully paid-up Equity Share capital of Company.
Chiranjeev Singh Saluja is the Managing Director and Surender Pal Singh Saluja is Chairman and Whole-Time Director on Premier Energies Board.
Why Invest in Premier Energies Limited IPO or Not?
While investing in an IPO-bounded company, one should check their fundamentals that help an investor to Visions Company’s financial performance and competitive strength which at last drives its business growth. Fundamental analysis apart from financial and competitive strength, also help you to know the risk factors that can affect the business operations and future prospects of the company. After evaluating the variables such strength weakness, financials, you may strike a balance and decide to invest or not invest in an IPO.
Strengths
2nd largest integrated solar cell and solar module manufacturer
As of FY24, Premier Energies is India's second largest integrated solar cell and solar module manufacturer, with an aggregate annual installed capacity of 2 GW for solar cells and 3.36 GW for solar modules. Their manufacturing facilities are spread across five facilities in Hyderabad, Telangana.
Growing demand for cleaner energy has propelled the company to commission another manufacturing lines. Therefore, the company is on course to commission an additional solar module line and a TOPCon solar cell line within Fiscal 2025.
| Year | Milestone | Total Solar Cell Capacity | Total Solar Module Capacity |
| 2011 | Established a solar cell line with an annual capacity of 75 MW and a solar module line with an annual capacity of 100 MW in Unit I | 75MW | 100 MW |
| 2017 | Expanded the installed capacity of the solar module line in Unit I by 370 MW | 75MW | 470 MW |
| 2021 | Established a fully integrated 500 MW capacity solar cell line and a 750 MW capacity solar module line in Unit II | 500 MW | 1220 MW |
| 2022 | Expanded the installed capacity of the solar cell and module lines in Unit II by 250 MW and 150 MW | 750 MW | 1370 MW |
| 2023 | Established a solar cell line in Unit III with an annual capacity of 1,250 MW | 2000 MW | 3260 MW |
| Established a solar module line in Unit IV with an annual capacity of 1,600 MW | |||
| Expanded the installed capacity of the solar module line in Unit II by 500 MW | |||
| 2024 | Established a solar module line in Unit V with an annual capacity of 100 MW | 2000 MW | 3360 MW |
Long track record in the solar module manufacturing sector
They have history of serving this market for more than 25 years and has grown to 3.36 GW annual installed capacity with all production lines are automated to reduce human error and quality degradation. Over the years, the company's has built strong relationships with international companies that have provided them experience in international best practices, particularly in quality manufacturing.
Technical expertise
Solar cell production is a complex and technical process that requires multiple chemical and gas-based steps. Due to their knowledge of technical knowhow, they see them self well positioned to capitalize on opportunities in the solar cell market. In a race to increase efficiency they have transitioned from polycrystalline solar cells to monocrystalline PERC solar cells and thereafter to TOPCon cell production technology.
Diversified customer base
After analyzing their revenue from operations, it appears that the majority of revenue is generated from the domestic market, hence the preferred market, but the share of exports has seen a decent rise in the past nine months. Although the domestic market dominates, their client base is diverse.
The total count of domestic clients has been increased year over year and for FY21, FY22, and FY23, and 9 months ended Dec 31, 2023, were 151, 165, 193, and 164. In contrast, the total number of clients from international markets in given period was 10, 8, 6, and 23.
| Particulars | FY21 | FY22 | FY23 | Nine months ended December 31, 2023 | ||||
| Amount | Percentage of revenue from operations (%) | Amount | Percentage of revenue from operations (%) | Amount | Percentage of revenue from operations (%) | Amount | Percentage of revenue from operations (%) | |
| Domestic | 6923.92 | 98.71 | 7360.59 | 99.08 | 14210.39 | 99.48 | 16727.13 | 82.92 |
| IPP | 1205.33 | 17.18 | 1792.86 | 24.13 | 3166.44 | 22.17 | 7746.58 | 38.4 |
| OEM | 1572.22 | 22.41 | 2337.27 | 31.46 | 5825.2 | 40.78 | 2849.59 | 14.13 |
| Government | 2172.55 | 30.97 | 1692.14 | 22.78 | 1727.28 | 12.09 | 1452.96 | 7.2 |
| others | 1973.82 | 28.14 | 1538.32 | 20.71 | 3491.46 | 24.44 | 4678.01 | 23.19 |
| Export | 90.66 | 1.29 | 68.12 | 0.92 | 74.96 | 0.52 | 3444.93 | 17.08 |
| Total | 7014.58 | 100 | 7428.71 | 100 | 14285.34 | 100 | 20172.06 | 100 |
| Particulars | FY21 | FY22 | FY23 | |||||
| Amount | Percentage of revenue from operations | Amount | Percentage of revenue from operations | Amount | Percentage of revenue from operations | Amount | Percentage of revenue from operations | |
| Largest customer | 987.41 | 14.08 | 1473.44 | 19.83 | 2623.6 | 18.37 | 2323.45 | 11.52 |
| Top 5 customers | 3325.61 | 47.41 | 3736.32 | 50.3 | 8185.86 | 57.3 | 10014.08 | 49.64 |
| Top 10 customers |
4526.03 | 64.52 | 4918.01 | 66.2 | 10794.63 | 75.56 | 15067.48 | 74.61 |
Expand overseas presence
Western market like U.S. and EU are particularity significant for the company, seeing growing demand for cleaner sources for energy. The company also signed a memorandum of understanding in April 2024 with an international solar wafer and solar module manufacturer and an international semiconductor wafer supplier to establish a new company dedicated in wafering solar bricks into wafers in Malaysia.
Weakness
Significant revenue from two products
The business depends on their ability to manufacture and sell solar cells and modules using monocrystalline technology in a profitable manner. If their emerge a new cheap source of energy like nuclear energy, demand for solar power might fail to complete and develop, resulting in decline in revenue, which will impact their profitability.
Furthermore, the lack of product diversification and dependency & concentration on two products may make the results of operations more volatile.
Increasing dependency on export
In the last nine months ending December 2023, the share of revenue from operations from exports has increased significantly, from 2–3% in previous years to 15–18% in nine months. Among the export countries, the United States and Hong Kong occupied significant shares.
Given the current geopolitical tensions and sanctions that the US has imposed on China, products exported to the United States are subject to various terms and conditions on the area of origin. To counter imports of certain materials for the Chinese market, the US has introduced a variety of regulations. If US agencies unearth in their investigations that the goods exported by the company were found to have circumvented US import restrictions by assembling the goods outside China using components sourced from China, it could have negative implications for the company, which might lead to monitoring penalties and losing a demanding market.
Volatility in the price of raw materials
Making of solar cells requires many raw materials like silver paste, silicon wafers, Aluminum paste and other chemicals. Any volatility in prices of these raw materials due to commodity market fluctuations, currency fluctuation, import policies, etc could directly affect their bottom line and subsequently their future order book.
Exchange rate fluctuations
The company is dependent on foreign currency because they import raw material and export goods in international markets. Exchange rate fluctuations can have material and adversely affect on liquidity and efficient working capital management.
| Particulars | Fiscal 2021 | Fiscal 2022 | Fiscal 2023 | For the nine months ended December 31, 2023 |
| Total purchases (₹ million) | 5251.76 | 7391.39 | 15857.71 | 16717.19 |
| Import purchases / purchases in foreign currency (₹ million) | 1888.23 | 4493.43 | 8687.21 | 10698.56 |
| Percentage of total purchases (%) | 35.95 | 60.79 | 54.78 | 64 |
Premier Energies IPO Grey Market Premium (GMP)
According to online sources, Premier Energies IPO GMP is trading at Rs.300. The grey market premium can’t be taken at face value but it gives rough idea of listing price.
How to Apply for Premier Energies Limited IPO?
If you have a share trading and demat account at Moneysukh, you can easily apply for the Premier Energies Limited IPO. Just follow the steps given below.
Step 1: Once Premier Energies Limited IPO opens you can apply online.
Step 2: Browse at trade.moneysukh.com and log in with your Moneysukh User ID & password.
Step 3: Now you have to visit the IPO section and select Premier Energies Limited IPO.
Step 4: Here just fill in the required such as bidding price, quantity or lot and so on.
Step 5: Now you have to make the payment and your IPO application is successful.
How to Check Premier Energies Limited IPO Allotment Status?
Just like applying, checking the Premier Energies Limited IPO Allotment Status is also very easy and hassle-free through Moneysukh online platform. You have to just wait till the IPO is closed and the allotment is finalized. If you have been allotted any share it will be transferred into your demat account that you can sell after listing of the shares on the NSE or BSE stock exchanges.
Also Read: How to Increase the Chances of IPO Allotment
However, if IPO is oversubscribed and unfortunately if you have not been allotted any share, your IPO application money will be returned to your bank account or linked account where you have allocated the fund while applying for the Premier Energies IPO.
Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh
