Solar module maker Premier Energies' IPO on August 27, fresh issue of Rs 1,291 crore

Premier Energies IPO

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Solar module manufacturer Premier Energies, which is backed by private equity fund SAGF II, will open its initial public offering for subscription on August 27, the company said.

The price band of the public issue is expected to be announced on Thursday, i.e. August 22, based on which the final issue size could be gauged.

The IPO is a mix of fresh issuance of equity shares worth Rs 1,291.4 crore by the company, and an offer-for-sale (OFS) of 3.42 crore equity shares by investors and promoters. Investors South Asia Growth Fund II Holdings LLC, and South Asia EBT Trust will be selling 2.68 crore and 1.72 lakh equity shares in the OFS, while one of the promoters Chiranjeev Singh Saluja will sell 72 lakh shares.

The promoters together hold 72.23 percent stake in the company, and 26.12 percent shareholding is with the public, including South Asia Growth Fund II Holdings LLC, with remaining 1.65 percent shares owned by employee trusts.

The anchor book of the offer is scheduled to open for a day on August 26, and the issue will close on August 29.

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Half of the total issue size is reserved for qualified institutional buyers, 15 percent for non-institutional investors (High Networth Individuals), and the remainder 35 percent stake has been set aside for retail investors. The Telangana-based company has reserved Rs 10 crore worth equity shares for its employees.

Kotak Mahindra Capital, JP Morgan India, and ICICI Securities are the book running lead managers to the issue.

The solar cell and module manufacturer operates business through five manufacturing facilities in Hyderabad, Telangana. In total, the company has annual installed manufacturing capacity of 2 GW for solar cells and 4.13 GW for solar modules. Its key customers include NTPC, Tata Power Solar Systems, Panasonic Life Solutions, Continuum, Shakti Pumps, First Energy, Bluepine Energies, Luminous, Hartek Solar, Green Infra Wind Energy, Madhav Infra Projects, SolarSquare Energy, and Axitec Energy India.

Premier Energies has an order book of Rs 5,926.6 crore as of July 2024, including Rs 1,609.1 crore for non-DCR solar modules, Rs 2,214 crore for DCR solar modules, and Rs 1,891.1 crore for solar cells.

Also read: Moneycontrol Pro Panorama | FPIs favour IPOs, private equity in high-valuation markets

The solar module player will spend Rs 968.6 crore out of the net fresh issue proceeds for part-financing a 4 GW solar PV TOPCon Cell and 4 GW Solar PV TOPCon module manufacturing facility in Hyderabad, and the remaining IPO funds will be utilised for general corporate purposes.

TOPCon stands for Tunnel Oxide Passivated Contact, and it is a new type of solar cell being positioned as the next PV standard.

The company that competes with Websol Energy System has turned profitable in the fiscal 2024, recording profit at Rs 231.4 crore against loss of Rs 13.3 crore in the previous year with strong operating as well as topline performance. Revenue grew by 120 percent on-year to Rs 3,143.8 crore in FY24.

EBITDA (earnings before interest, tax, depreciation and amortisation) for the year ended March 2024 increased sharply by 511 percent to Rs 477.8 crore with margin expansion of 970 bps at 15.2 percent compared to previous year.

In the first quarter ended June FY25, the profit jumped over 6-fold to Rs 198.2 crore, increasing from Rs 31.3 crore in the corresponding period of previous fiscal. Revenue grew by 171 percent on-year to Rs 1,657.4 crore during the quarter.

EBITDA for the June FY25 quarter stood at Rs 358.3 crore, growing 401.4 percent over the year-ago period, with margin expanding by 990 bps to 21.6 percent YoY.