Premier Energies to raise ₹2,830 cr via IPO; plans to set up 4 GW solar cell, module plant

Solar module manufacturer Premier Energies, backed by private equity fund SAGF II, is set to launch its initial public offering (IPO) on August 27. The Hyderabad-based company has set the price band in the range of ₹427-450 per share and the lot size is 33 shares and in multiples thereafter. The three-day IPO will close on August 29, while the tentative date for the listing of shares on the BSE and NSE is September 3, 2024.

The IPO is a combination of fresh issue of 2.87 crore equity shares worth ₹1,291.40 crore and offer for sale of 3.42 crore shares by existing shareholders. At the upper end of the price band, the OFS amount is ₹1,539 crore, taking total issue size to ₹2,830.40 crore. The market capitalisation of Premier Energies is ₹20,284.33 crore.

Ahead of the opening of the IPO, shares of Premier Energies were commanding grey market premium of ₹200, or 44.4%, over the issue price in the unlisted market.  This is going to be the second solar cells manufacturing company, after Websol Energy Systems Limited, to be listed on the domestic bourses.

Under the OFS, promoter Chiranjeev Singh Saluja, the managing director of the company, and its existing shareholders South Asia Growth Fund II Holdings LLC and South Asia EBT Trust will pare their stake in the IPO. 

As per the revised document filed with market regulator SEBI, the company has reserved half of the issue for qualified institutional buyers (QIB), up to 15% for non-institutional institutional investors (NII), and the remaining 35% for retail investors.

Premier Energies, a leading integrated solar cell and module manufacturer, intends to use the capital raised from issuance of equity shares to invest in its subsidiary, Premier Energies Global Environment Private Limited. The company plans to expand its manufacturing capacities in the form of a 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module at its facility in Hyderabad, Telangana. A part of the capital will be used to meet general corporate purposes.

India had a total installed power generation capacity of 442 gigawatt (GW) at the end of FY24 and is expected to add an additional 180 GW by FY28, taking the country’s total capacity to 622 GW. Around 65% of this capacity will be added through solar, which would take the country’s installed solar capacity from 82 GW in FY24 to 198 GW by FY28, as per the RHP.

The Indian government has an ambitious plan to achieve 500 GW of clean energy by CY2030 out of which 300 GW will come from solar. India’s solar installed capacity has grown nearly four times in the past six years and is expected to reach nearly 200 GW by FY28.

Premier Energies, with 29 years of experience in the solar manufacturing industry, is the second largest integrated player in India at the end of FY24, boasting 2.0 GW of annual installed capacity for cell manufacturing alongside its 4.13 GW of annual installed capacity for module manufacturing and having 27.7% share in the integrated installed capacity in the country at the end of March 2024, noted the DRHP. 

As of June 30, 2024, Premier Energies’ key customers across its business offerings include NTPC, TATA Power Solar Systems, Panasonic Life Solutions, Continuum, Shakti Pumps, First Energy, Bluepine Energies, Luminous, Hartek Solar, and others.

The company posted consolidated revenue of ₹3,171.31 and a profit of ₹231.36 crore in the financial year 2023-24, while the top and bottom line stood at ₹1,668.79 crore and ₹198.16 as of June 30, 2024. At the end of June quarter, the total borrowing of the company stood at ₹1,200.16 crore, dropping from ₹1,392.24 at the end of March 2024.

Kotak Mahindra Capital Company Limited, J.P. Morgan India Private Limited and ICICI Securities Limited are the book running lead managers of the IPO, while Kfin Technologies Limited is the registrar for the issue.