Premier Energies: Company Strength, IPO, GMP, Listing

Premier Energies, established in 1995 and backed by GEF Capital, is a prominent player in the solar energy sector. Specializing in the manufacture of solar cells and modules, the company has garnered significant attention through its recent IPO, which highlighted its robust market position and ambitious growth plans. With advanced production facilities spread across Telangana and a planned expansion to significantly increase its production capacity, Premier Energies is at the forefront of innovation in renewable energy solutions. Let us know about the IPO of this company and also know how it will prove for the investors to invest in this company.

Premier Energies

Premier Energies a solar cell and module manufacturer founded in 1995, is backed by GEF Capital. The company’s recent IPO, open from August 27 to 29, saw significant interest with a grey market premium reaching Rs 427-450 per share, though it closed at around Rs 375. The offering involved selling 1,291.40 crore new shares and 3.42 crore existing shares, raising approximately Rs 2,830.40 crore.

Premier Energies is a manufacturing firm specialising in producing solar cells and modules. It was founded in 1995. Pioneering in creating cutting-edge solar technologies and solutions, Premier Energies is supported by GEF Capital, a private equity firm with headquarters in Washington, DC.

Over 44.91 acres of land, divided among three Telangana locations, are home to Premier Energies’ state-of-the-art production facilities. The company expects a 2 GW solar cell and 3.36 GW solar module production capacity annually as of March 31st, 2024. There are also currently plans to create a further Topcon Cell line and module line, totalling 75 acres of land. The plans provide for Cell and Module Facilities in these new buildings.

Premier Energies produces integrated solar cells and panels. Its product offerings include cells, solar modules, monoracial modules, bifacial modules, EPC solutions, and O&M solutions. The company has five manufacturing sites, all of which are located in Hyderabad, Telangana.

When will Premier Energies IPO be allotted?

Premier Energies is scheduled to finalise the share allotment basis on August 30, 2024. Bidders will get messages, alerts or emails for debit of their funds or revocations of their IPO mandate either over the weekend or latest by Monday, September 2. The investors received a historic response from the solar product player during the three-day bidding.

Premier Energies IPO price ranges from ₹427 to ₹450 per share. The company plans to raise ₹2,830.40 crore through the IPO, which includes a fresh issue of 2.87 crore shares worth ₹1,291.40 crore and an offer to sell 3.42 crore shares worth ₹1,539.00 crore.

Premier Energies IPO in the GMP market?

Premier Energies’ grey market premium (GMP) has risen sharply following record-breaking bids for the issuance. Last heard the company was seeking a premium of Rs 427-450 per share, implying a listing increase of roughly 95% for investors. However, when the deal closed for bidding, it was roughly Rs 375 per unit.

The Premier Energies IPO was up for bids from August 27 to August 29. The Telangana-based business sold its shares in lot 33 at a predetermined price between Rs. 427 and Rs. 450 per share. With the sale of 1,291.40 crore new shares and an offer to sell 3.42 crore shares, the company’s primary offering brought in approximately Rs 2,830.40 crore.

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Premier Energies: Strength

• The company actively engages in environmental, social, and governance (ESG) efforts to minimize its carbon footprint. It employs a zero-liquid discharge system that recycles all water used in its production processes. 
• The company’s unified approach and strategy of backward integration have enhanced its ability to market renewable solar modules for domestic use while also boosting its revenue from international markets, especially in the United States.
• In India, Premier Energies caters to clients throughout 23 states and Union Territories.

Client Base:

1. IIPs
2. OEMs
3. NTPC
4. TATA Power
5. Panasonic LS

Is Premier Energies a good company?

Premier Energies, founded in 1995 and backed by GEF Capital, has established a strong market presence that reassures investors with its long history and solid financial support. This foundation positions the company as a reliable player in the renewable energy sector, attracting interest from stakeholders seeking stability and growth potential.

As a manufacturer of solar cells and modules, Premier Energies operates within a rapidly expanding industry fueled by global trends toward renewable energy and sustainability. This sector’s growth presents significant opportunities for companies like Premier Energies, allowing them to capitalize on the increasing demand for clean energy solutions.

The company is on track to achieve a substantial production capacity of 2 GW for solar cells and 3.36 GW for solar modules by March 31, 2024. Furthermore, its plans for additional expansion reflect a commitment to scaling operations. With a diverse product line that includes solar cells, modules, and EPC (Engineering, Procurement, and Construction) solutions, Premier Energies is well-equipped to meet various market needs, supported by advanced production facilities spread across 44.91 acres in Telangana.

Things to Consider About Premier Energies

Premier Energies presents a promising investment opportunity due to its established market position, significant production capacity, and ongoing expansion plans. However, potential investors should weigh these strengths against the risks associated with IPO pricing volatility, regional concentration, and the competitive nature of the solar energy sector. Conducting thorough due diligence and considering these factors will help determine if Premier Energies aligns with your investment goals and risk tolerance.

• IPO Pricing Fluctuations:
  Although there was significant interest in the IPO with a grey market premium of Rs 427-450 per share, the final price closed lower at around Rs 375. This discrepancy might raise concerns about market volatility and investor confidence.
• Concentration of Operations:
  All of Premier Energies’ manufacturing sites are located in Hyderabad, Telangana. While this might offer operational efficiencies, it also means the company is heavily dependent on a single region, which could be a risk factor.
• Competitive Market:
  The solar energy sector is highly competitive with many players vying for market share. Premier Energies’ ability to maintain its competitive edge amidst evolving technologies and market dynamics will be crucial.
• Future Expansion Risks:
  The company’s plans for further expansion, including the development of new production lines, involve significant capital investment and execution risks. Successful implementation will be key to achieving projected growth.

Top Indian Stocks in Energy Segment

1. Tata Power Company Limited:
   Tata Power is constantly focusing on expanding its business in the power sector, the effect of which is also visible in its shares. Tata Power has given investors several times more profit in just the last few years. Tata is a big name in the Indian stock market and why not, it has given excellent results to investors in every sector. Tata Power shares have given positive returns of 676.80% in the last 5 years.
2. Adani Green Energy Limited:
   Adani Green Energy’s stock has shown tremendous performance in just a few years, due to which its stock has seen a lot of growth. Adani Green works in both solar energy and wind energy. It is a subsidiary of Adani Group, headquartered in Ahmedabad. Adani Green’s stock has grown by 3218.85% in the last 5 years, which is the mark of a strong stock.
3. Suzlon Energy Limited:
   Suzlon shares have been showing green signals for the last year and this stock has given positive returns of 208.67% to investors in the last year. Suzlon’s net worth is estimated to be Rs 3920 crore in the year 2024, in which the total revenue of the company in the year 2024 is Rs 2044 crore.
4. Inox Wind Limited:
   Due to the increasing demand for green energy, this time is a golden period for investors and many companies are performing well in it, INOX WIND is one of them. Inox Wind Limited has given returns of 2649.43% to investors in the last 5 years and the total revenue of the company by the year 2024 is Rs 2192 crore. Inox Wind Limited was started in the year 2009 and the current CEO of the company is Kailash Tarachandani who has given a new direction to the company, due to which the shares of the company have been giving better profits to the investors like a rocket.
5. KPI Green Energy:
   KPI Green Energy is a solar energy and hybrid vertical power generation company headquartered in Gujarat. This company has been operating in this sector since the year 2008. The stock of KPI Green Energy is trading at Rs 863.85 as of 30 September 2024 and this stock has given positive returns of about 210.37% to investors in the last year.

Conclusion

Following a surge in grey market premiums, Premier Energies had anticipated a significant premium of Rs 427-450 per share for its IPO, indicating a potential 95% increase for investors. However, the final bid price settled at around Rs 375 per share. The IPO, conducted from August 27 to 29, featured shares priced between Rs 427 and Rs 450, with the company offering 1,291.40 crore new shares and 3.42 crore existing shares. This major offering raised about Rs 2,830.40 crore, reflecting strong investor interest despite the adjusted final pricing. If you really liked the article then show us your love in the comments.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investments in Share Market involve risks, including the potential loss of principal. Please consult a financial advisor before making any investment decisions.

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