Premier Energies IPO Subscription Status: The IPO of Premier Energies, a leading company working in the solar industry, has received positive reviews. Due to which investors are also betting on this IPO. On its second day, this IPO has been subscribed 6.70 times or 670 percent so far. This issue of Rs 2830 crore has received bids of Rs 13,264.29 crore so far. At the same time, its premium in the gray market remains consistently high. The brokerage believes that the company is in a better position to take advantage of the growing solar energy market. You can subscribe to this IPO till 29 August 2024.
Premier Energies: Subscribed 6.70 times till now
Premier Energies’ IPO has been subscribed 6.70 times till its second day. 35% share has been reserved for retail investors in the IPO and this share has been subscribed 4.33 times till now. Whereas 50% share is reserved for qualified institutional buyers and it has been subscribed 1.37 times till now. Whereas 15% share is reserved for non-institutional investors and it has been subscribed 19.31 times till now. The share reserved for employees in the IPO has been subscribed 7.03 times. They are getting a discount of Rs 22 per share.
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Rating : Recommend to subscribe
Brokerage house Choice Broking has advised to subscribe to the IPO. The brokerage says that with active regulations, policy support and commitment by the government towards renewable energy, the domestic solar manufacturing market is likely to see strong growth in the mid-term. Manufacturers like PEL are well positioned to benefit from the expansion in the market with their dominant market position. Continued restrictions on trade with China by developed economies like the USA and Europe will continue to provide export opportunities for the company in the mid-term.
The brokerage says that international solar wafer and cell prices have been on a declining trend since mid-2022 and current prices may be lower than FY21 levels. The decline in raw material prices has positively impacted the company’s financial performance during FY24 and Q1 FY25. Thus, any volatility in raw material prices will be negative for the company. At the higher price band, PEL is demanding an EV/sales multiple of 4.8x, which looks attractive considering the valuation of the only listed peer (which is loss-making).
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What are the strengths of the company
• An integrated solar cell and solar module manufacturer
• A long track record in the solar module manufacturing market
• Experienced in solar cell-line production
• A diversified customer base with client relationships within India and a strong order-book overseas
• Senior Management Team led by an experienced promoter
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Key risks and concerns
• A general slowdown in global economic activity
• Unfavorable government policies and regulations
• Disruption in global supply chains mainly due to geo-political tensions
• Difficulty expanding into foreign and US markets
• Delay in commissioning of expansion projects
• Unfavorable foreign currency exchange rates
• Volatility in prices of key raw materials
• Competition from Chinese imports
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Price Band and IPO Size
Premier Energies has fixed a price band of Rs 427-450 per share for its IPO. The size of the IPO of solar cell and module manufacturer Premier Energies Limited is Rs 2830 crore. In this, fresh equity shares worth up to Rs 1291.4 crore will be issued, while 3.42 crore shares will be sold through Offer for Sale (OFS). This issue will open for anchor (large) investors on August 26.
GMP and lot size
The unlisted stock of Premier Energies is seen at a premium of Rs 330 in the grey market, which is 73 per cent in terms of the upper price band of Rs 450. There are 33 shares in one lot size in the IPO. In terms of the upper price band, retail investors will have to invest a minimum of Rs 14,850. At the same time, retail investors can invest Rs 1,93,050 for a maximum of 13 lots.
(Disclaimer: The views or advice on the stock are given by experts and brokerage houses. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
