Premier Energies IPO Day 3: GMP, subscription status, and review

Premier Energies Ltd, a leading integrated solar cell and module manufacturer, is in the spotlight as its IPO continues to attract substantial interest. The IPO, which opened on August 27 and closes today, is shaping up to be a major event.

Subscription Status

As of the third and final day of bidding, Premier Energies IPO has been oversubscribed 74.74 times. The IPO received bids for 329.60 crore shares against 4.46 crore shares on offer. Breaking it down:

Retail Investors: 7.05 times oversubscribed

Non-Institutional Investors: 50.65 times oversubscribed

Qualified Institutional Buyers (QIBs): 212.42 times oversubscribed

Employee Portion: 10.66 times oversubscribed

Grey Market Premium (GMP)

In the grey market, Premier Energies shares are commanding a premium of ₹397. This translates to a trading price of ₹846 per share, representing an 88% premium over the upper price band of ₹450 per share.

Company Overview

Premier Energies is the second-largest integrated solar manufacturer in India as of March 31, 2024. The company boasts an annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules. For FY24, Premier Energies reported revenues of ₹3,143.7 crore, marking a remarkable CAGR of 105% from FY22. The company’s order book stood at ₹5,926.5 crore as of July 31, 2024.

Should You Subscribe?

Most analysts recommend subscribing to the Premier Energies IPO for a medium to long-term investment. Here’s why:

Valuation: At the upper price band of ₹450, Premier Energies trades at a P/E ratio of 82.1x based on FY24 earnings. This is considered reasonable compared to industry peers.

Growth Potential: The company’s strategic investments, robust financial performance, and extensive order book position it well to benefit from the growing solar energy sector.

Market Position: Premier Energies’ experience, backward integration strategies, and strong market presence provide a solid foundation for future growth.

However, some analysts, like Geojit Financial Services, note that the IPO's P/E ratio of 88x at the upper price band may seem high. Despite this, the company’s experience, export market presence, and alignment with government policies and the China Plus One strategy support a positive long-term outlook.

Overall, the Premier Energies IPO is generating significant buzz and is deemed a strong candidate for investment by most experts.