Premier Energies's Rs 2,830-crore initial public offer (IPO) is expected to be remarkable for allotted investors given its robust subscription figures and trends indicated in the grey market.
As per grey market estimates, the shares of the company could list with 100 percent gains as the shares were trading at a premium of a massive 111 percent, Chittorgarh data showed. The grey market is an unofficial ecosystem where shares start trading much before the offer opens for subscription and continue to trade till the listing day.
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The offer -- a mix of fresh issue and offer-for-sale -- received high investor interest over three days as the issue was subscribed 74.14 times the offer size. Investors bid for 330.98 crore shares as against the 4.46 crore shares on offer. Qualified institutional buyers led the subscription, taking up 216.67 times their allotted portion. Retail investors subscribed 7.33 times their quota, while employees subscribed 10.84 times their reserved portion. Non-institutional investors subscribed 49.81 times their reserved portion.
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"The company’s substantial investments, including a new 4 GW TOPCon solar cell line, and its improved Return on Capital Employed (ROCE), which rose from 3.6 percent in FY22 to 25.6 percent in FY24, reinforce its strong market position, and a listing of 80-90 percent is on the cards," Akriti Mehrotra, research analyst StoxBox, said.
Premier Energies specialises in integrated solar cells and panels, offering solar cells, monofacial and bifacial modules, and EPC and O&M solutions. It operates five manufacturing facilities in Hyderabad, Telangana.
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"We believe the investor demand has come considering reasonable valuations, well-positioned to capitalize on the industry demand in renewable energy and an opportunity to invest in India's second-largest integrated solar cell and module manufacturer," Prashanth Tapse, Senior Vice President of Mehta Equities, said.
The net proceeds from the fresh issue will be directed towards investing in Premier Energies Global Environment Private Limited, a subsidiary, to support the development of a 4 GW Solar PV TOPCon Cell and Module manufacturing plant in Hyderabad, as well as for general corporate purposes.
Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers said that the company’s P/E ratio stands at 87.7 times based on its FY24 earnings. However, when annualizing FY25 earnings, the P/E ratio significantly drops to 25.5 times. Based on FY24 earnings, its market cap-to-sales ratio is 6.4 times. With its strong market position, diversified customer base, and high technical expertise, the company is well-positioned for future growth.
Trading of shares on the BSE and NSE will begin on September 3.
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