Premier Energies Limited IPO: Check IPO Date, Lot Size, Price & Details

Introduction:

Company is primarily an integrated solar cell and module manufacturer with 29 years of experience in the solar industry. The company has five manufacturing facilities, all of which are situated on land that the company owns, in Hyderabad, Telangana, India. The company have an annual installed capacity of 2 GW for solar cells and 4.13 GW for solar modules.

The company derives its revenue from the following operations: a) Manufacturing solar cells and modules; b) Executing EPC projects, offering comprehensive solar solutions for ground-mounted, rooftop, floating, canal bank, canal top, and hybrid systems;  c) Providing O&M services for EPC projects; d) Generating power through a 2 MW solar plant. Key customers include NTPC, Tata Power Solar Systems, Panasonic Life Solutions, and Shakti Pump.

IPO Details:

Objectives of Issue:

• Investment in the Subsidiary for part-financing the establishment of Solar cell and solar module manufacturing facility
• General Corporate Purpose

Key Strengths:

• Global Presence- Due to its two decade experience and operational efficiency it has presence in more than 23 states in India. Also it generated more than 10% of its revenue from from exports in FY24 majorly from United States
• Excellent Track Record in Solar Cell and Solar Module Manufacturing- The extensive experience in solar module manufacturing has bolstered our brand recognition and credentials. Our modules have earned accolades, including “top performer” status for reliability from PV Evolution Labs (PVEL) in 2023 and 2024. The company's expertise in cell manufacturing allows it to avoid initial stabilization delays, giving it a competitive edge over newer market entrants.

Risks:

• Over Dependence on Large Customers- In the past three years, the company's top 10 customers have accounted for over 65% of its revenue, while the top 5 customers have contributed more than 45%. This heavy reliance on a few key clients means that losing any of them could substantially impact operations.
• Dependency on Government policy and Regulations – As of July 31, 2024, over 25% of the outstanding orders are from government entities and public sector undertakings (PSUs). The solar industry in India is significantly impacted by government policies and regulations. Any changes in solar energy policies could influence orders from these entities, directly affecting the company’s future order book.
• Excessive Imports from China and other countries– Over the past three years, raw materials imported from China have constituted over 40% of the company's expenses, while materials from other countries have accounted for more than 10%. Changes in government policies favoring domestic sourcing, such as increased customs duties, could raise raw material costs and potentially impact the company's profitability.

Financial Snapshot:

Debt to Equity Ratio - The debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated by dividing a company’s total liabilities by its shareholder equity. It is a measure of the degree to which a company is financing its operations with debt rather than its own resources.

KPI comparison with Industry Peers

Conclusion

The company has excelled compared to its listed peers in key financial metrics, such as revenue growth, three-year average profit margins, and returns on capital. Notably, the listed peer reports a negative PAT, making PE ratio comparison unfeasible. With over two decades of industry experience and a strong presence in rooftop solar solutions, the company is well-positioned for future growth. Given its solid fundamentals and favorable industry outlook, it is recommended as a long-term investment.