Premier Energies Share Price Updates: Stock ends at ₹838.90 apiece on NSE, 86% premium to IPO price

"Premier Energies which is financing a 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module, is an integrated solar cell and solar module manufacturer with 29 years of experience and an annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules. It has five manufacturing facilities.

Stock should do very well in the long term as it manufacturers solar cells and has strong order book and strong visibility over the next 2 years ahead

We expect strong re-rating here over the long term ahead," said Avinash Gorakshakar, Head-Research at Profitmart Securities.

Premier Energies share price ended listing day at ₹838.90 on NSE, a 86.42% premium to the IPO price of ₹450, and at ₹839.65 on BSE, a 86.59% premium.

The RHP states that half of the equity shares granted to anchor investors under the anchor investor component will be locked in for 90 days after the date of allotment, and the other half will be locked in for 30 days.

In September 2021, a global private equity management fund focused on investing in climate solutions invested ₹1,770 million in the company through South Asia Growth Fund II Holdings LLC and South Asia EBT Trust, its affiliates.

As part of the offer-for-sale component, South Asia Growth Fund II Holdings LLC (SAGF II) will sell 2.68 crore equity shares.

The stock was trading at ₹837.50 per share on NSE, marking a 15.40% decrease at 14:41 IST, and at ₹837.90 per share on BSE, showing a nearly 15.45% decline.

The cost of average electricity supply (ACS) has risen from ₹3.6/kWh in FY2010 to ₹6.7/kWh in FY2023. Meanwhile, solar tariffs have shown a consistent decline and have stabilized within the range of ₹2.3/kWh to ₹2.6/kWh over the last five years. It's worth noting that solar tariffs now undercut those of numerous thermal power plants, underscoring a promising future for solar energy.

• The company's operational revenue is reliant on a small number of clients, and any one of these clients' loss or decline in revenue might have a materially negative impact on the company's operations, financial situation, business performance, and cash flows.
• The company's manufacturing facilities are situated in the Indian state of Telangana, which puts its operations at risk for geographical concentration due to local and regional factors that could negatively impact the company's operations, and consequently, its business, operating results, and cash flows.

Many well-known companies, including NTPC, Tata Power Solar Systems Limited, 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, are among Premier Energies' varied clientele.

Premier Energies has grown its annual installed capacity to 4.13 GW since it started manufacturing solar modules in 1999. In December 2023, a module line with a capacity of 1,600 MW was introduced, utilising TOPCon technology. Additionally, in June 2024, a line with a capacity of 1,034 MW was established, capable of assembling modules using either TOPCon or HJT technology.

The stock was trading at ₹815 per share on NSE, marking a 17.68% decrease at 12:56 IST, and at ₹835.25 per share on BSE, showing a nearly 15.72% decline.

Premier Energies' order book as of July 31, 2024, amounted to ₹59,265.65 million. This included ₹16,091.14 million for non-DCR solar modules, ₹22,140.60 million for DCR solar modules, ₹18,911.18 million for solar cells, and ₹2,122.72 million for EPC projects.

“Post a stellar listing, the stock is under tremendous pressure; it's trading at virtually low of the day. The fact the stock has substantially come down from the high shows there's no follow-up buying at this point in time, which is a negative sign,” said Arun Kejriwal, the founder of Kejriwal Research and Investment Services.

The stock was trading at ₹861.55 per share on NSE, marking a 12.97% decrease at 12:12 IST, and at ₹861.50 per share on BSE, showing a nearly 13.07% decline.

"Premier Energies' shares had a phenomenal start to the trading day on Tuesday. The maker of solar modules listed its shares on the NSE for ₹990 a share, which is a 120% increase over the IPO price of ₹450 per share. The company is the second-largest integrated participant in solar production in India, and its finances are continuously becoming better. 

The company's diverse client base, distinction as a top module reliability performer, and strategic alignment with government programs supporting domestic solar output all point to a bright future for the company therefore, investors can invest in the company with a medium to long-term perspective," said the brokerage.

The solar cell and module manufacturer is fully integrated and has a yearly capacity of 2 Gigawatts (GW) for cells and 4.13 GW for modules as of June 30, 2024. Along with manufacturing solar cells and modules, the company offers engineering, procurement, and construction (EPC) solutions, operations and maintenance (O&M) services, and functions as an independent power producer (IPP). With five manufacturing facilities all situated in Hyderabad, Telangana, India, the company operates through eight subsidiaries in India and overseas.

The stock was trading at ₹883 per share on NSE, marking a 10.81% decrease at 11:27 IST, and at ₹882.50 per share on BSE, showing a nearly 11% decline.

According to Arun Kejriwal, the founder of Kejriwal Research and Investment Services, the company's first-quarter figures reflect the introduction of new capacity at the end of the previous year. Specifically, the company generated half of the annual revenue and approximately 65% of the yearly profit in the first quarter.

Arun advised investors to invest for the medium to long term in the company.

Premier Energies IPO operates in the solar energy sector, an area that is currently a major focus in the market. The company is involved in both aspects of solar energy, manufacturing both solar panels and solar photovoltaic (PV) cells. Specifically, it specializes in producing bifacial monocrystalline PERC cells using the M10 wafer size, giving it a competitive advantage over other players. Furthermore, the company boasts significant size and scale. Adding to its strengths, Premier Energies is investing its own funds to expand its production capacity, with the objective of the IPO being to finance this capacity expansion.

"Premier Energies, the leading solar cell and module manufacturer, made a blockbuster debut on the stock market, listing at ₹990 per share, a staggering 120% gain over its issue price of ₹450. This exceptional performance aligns with the pre-listing hype, fuelled by the company's strong fundamentals, robust investor response, and favourable market conditions.

Overall, Premier Energies' successful listing and impressive performance solidify its position as a promising player in the renewable energy sector. Investors who participated in the IPO may book profit, but those who still want to hold it may keep a stop loss at ₹890," said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.

"Post listing considering 120% listing gain on valuation front has moved from reasonability valued to stretched valuations which would be reason for profit booking attempts at high levels.

We continue to recommend conservative investors to choose profit booking, while risk takers can continue holding for long term as the sector outlook remains optimistic. Given the company's strategic alignment with government initiatives promoting domestic solar production, alongside its diversified customer base and recognition as a top performer in module reliability, suggests a promising future. In the long run we believe the market could give a premium multiple towards its leadership position," said Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities.

Premier Energies share price trades at ₹876.15 apiece on BSE  post a blockbuster listing. 

Premier Energies share price slumped over 12% on the NSE post a blockbuster listing. At 10:04 IST, Premier Energies share price was trading at ₹879 apiece. 

Premier Energies share price made a bumper debut on the bourses today. On NSE, Premier Energies share price opened at ₹990 per share, 120% higher than the issue price of ₹450. On BSE, Premier Energies share price today opened at ₹991 apiece, up 120.22% than the issue price.

On the final day of subscription, the IPO of Premier Energies, a manufacturer of solar cells and modules, was oversubscribed by 74.09 times. Qualified Institutional Buyers (QIBs) showed remarkable interest with a subscription of 216.67 times, while non-institutional investors subscribed 49.76 times. Retail Individual Investors (RIIs) subscribed 7.25 times. 

On the second day Premier Energies IPO subscription status was 6.61 times, as per BSE data, and on the first bidding day the issue was booked 2.17 times.

According to market sentiments, Premier Energies’ shares might list with gains. The company's significant investments, which include a new 4 GW TOPCon solar cell line, and its enhanced Return on Capital Employed (ROCE), which increased from 3.6 percent in FY22 to 25.6 percent in FY24, establish its strong market position, making a listing with gains most certain. Due to the stock's reasonable valuation, the company's ability to take advantage of the market demand for renewable energy, and the chance to invest in India's second-largest integrated solar cell and module manufacturer, there has been a significant increase in investor demand.

“Considering all the parameters like subscription demand, market sentiments and sectorial importance, we can expect a healthy robust listing gain more than ~60-70% or even above against the issue price of ₹450 per share. Post listing on valuation front it can move from reasonable valued to stretched valuations which would be reason for profit booking attempts at high levels,” said Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities.

Premier Energies IPO grey market price is +487. This indicates Premier Energies share price were trading at a premium of ₹487 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Premier Energies share price was indicated at ₹937 apiece, which is 108.22% higher than the IPO price of ₹450.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.