Premier Energies IPO Day 3: GMP, subscription status, review, other details. Should you subscribe?

The initial public offering (IPO) of Premier Energies Ltd, a leading manufacturer of solar cells and panels, has generated significant interest from investors. The IPO, which began on August 27 and closes today, has been heavily oversubscribed, reflecting strong demand.

Premier Energies IPO: Subscription Status, GMP, and Insights

Subscription Status:

As of Thursday, August 29, Premier Energies IPO has been oversubscribed by 9.31 times. By 11:15 am, the issue had attracted bids for 41.57 crore shares compared to the 4.46 crore shares available. The subscription details are as follows:

- Retail Investors: 5.08 times oversubscribed

- Non-Institutional Investors: 28.92 times oversubscribed

- Qualified Institutional Buyers (QIBs): 1.72 times oversubscribed

- Employee Portion: 7.78 times oversubscribed

Grey Market Premium (GMP):

Premier Energies shares are trading at a significant premium in the grey market. As of today, the grey market premium (GMP) is Rs 397 per share, suggesting that Premier Energies shares are being valued at Rs 846 each, which is an 88% premium over the issue price of Rs 450 per share.

Investment Consideration:

Premier Energies has established itself as a major player in the solar energy sector, ranking as the second-largest integrated solar manufacturer in India as of March 31, 2024. The company has an annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules. For FY24, Premier Energies reported impressive revenues of Rs 3,143.7 crore, reflecting a 105% compound annual growth rate (CAGR) since FY22. The company's order book stood at Rs 5,926.5 crore as of July 31, 2024.

Analysts are generally positive about the IPO:

- BP Equities views the valuation, with a price-to-earnings (P/E) ratio of 82.1x at the upper end of the price band, as reasonable compared to industry peers. They recommend subscribing to the IPO for medium to long-term investment, noting the company’s strategic positioning and robust financial performance.

- Geojit Financial Services acknowledges that the upper price band of Rs 450 results in a P/E ratio of 88x for FY24, which might seem high. However, they also point out the company’s extensive experience, backward integration strategies, and favorable market conditions, suggesting a “Subscribe” rating for medium to long-term investment.

IPO Details:

- Opening Date: August 27, 2024

- Closing Date: August 29, 2024

- Allotment Date: Expected August 30, 2024

- Listing Date: September 3, 2024

- Price Band: Rs 427 to Rs 450 per share

- Total Issue Size: Rs 2,830.40 crore, including a fresh issue of 2.87 crore shares worth Rs 1,291.40 crore and an offer for sale of 3.42 crore shares aggregating Rs 1,539.00 crore

The IPO is managed by Kotak Mahindra Capital, J.P. Morgan India, and ICICI Securities as the book-running lead managers, with Kfin Technologies Limited serving as the IPO registrar.

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