Premier Energies IPO opens for subscription today: All you need to know

Introduction

The Premier Energies IPO opened for subscription on August 27, 2024, offering an exciting opportunity for investors in India. But before diving into this, let’s understand the basics of an IPO and how it works, especially if you are new to the world of investments.

What is an IPO?

An IPO, or Initial Public Offering, is when a company offers its shares to the public for the first time. This allows the company to raise money from the public by selling ownership stakes, or shares. For investors, buying shares in an IPO can be a chance to own a piece of a growing company. However, it’s essential to evaluate the risks and opportunities before investing.

Premier Energies: A Quick Overview

Premier Energies is one of India’s leading solar energy companies. It manufactures solar photovoltaic (PV) cells and modules. With a focus on renewable energy, Premier Energies is positioning itself as a significant player in India’s green energy market. This IPO is part of their expansion strategy, as they plan to set up a 4 GW Solar PV TOPCon Cell and Module manufacturing facility in Hyderabad, Telangana.

Premier Energies IPO Details

The price of Premier Energies IPO will be determined based on the demand from investors. The IPO opened on August 27, 2024, and will close on August 29, 2024. The price band for the shares is set between ₹427 and ₹450 per share.

Investors can apply for a minimum lot size of 33 shares, which requires a retail investment of ₹14,850. The shares are expected to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on September 3, 2024.

The IPO consists of a fresh issue of 2.87 crore shares, which will raise ₹1,291.40 crore, and an offer for sale (OFS) of 3.42 crore shares, amounting to ₹1,539 crore. This brings the total IPO size to ₹2,830.40 crore.

Why is Premier Energies Going Public?

Companies go public to raise funds for various business needs. Premier Energies plans to use the funds from the IPO for the purpose:

1. Expansion: The company aims to invest in its subsidiary, Premier Energies Global Environment Private Limited, to finance a new manufacturing facility in Hyderabad. This will allow the company to expand its production capacity significantly, helping it meet the growing demand for solar energy solutions.

Why Should You Consider Investing in Premier Energies IPO?

If you are new to investing, you might wonder why Premier Energies IPO could be an attractive option. Here are some reasons:

1. Focus on Renewable Energy: Premier Energies is one of the leading companies in India’s solar energy sector.
2. Strong Financials: Premier Energies has shown impressive growth in recent years. Their revenue from operations increased by 92.3% in FY 2023 and by a remarkable 120.1% in FY 2024. The company’s net profit also surged to ₹231.40 crore in FY 2024, showing a significant improvement from a loss of ₹14.4 crore in FY 2022.
3. Future Growth Potential: Premier Energies plans to expand its production of TOPCon solar cells by 2025. This advanced technology promises higher efficiency, which could help the company maintain its competitive edge in the solar energy market. Additionally, the company has a strong order book of ₹5,926.56 crore, including contracts with major players like NTPC.
4. Listing Gains: IPOs often attract investors hoping for listing gains, which means the stock price could increase on the day of listing. The grey market has already shown positive interest in Premier Energies, indicating that the stock may perform well when it debuts on the stock exchanges.

How to Apply for Premier Energies IPO?

Applying for an IPO is straightforward if you follow the steps carefully:

1. Open a Demat Account: If you don’t already have one, you’ll need a Demat account to hold your shares electronically. You can open one with any stockbroker or financial institution.
2. Check the Price Band and Lot Size: As mentioned earlier, the price band for Premier Energies IPO is ₹427 to ₹450 per share, and the minimum lot size is 33 shares.
3. Apply Online: Most stockbrokers and financial institutions allow you to apply for an IPO online through their platforms. You can also apply via your net banking account using the ASBA (Application Supported by Blocked Amount) method.
4. Wait for Allotment: Once you’ve applied, you’ll need to wait for the allotment process. If you receive the shares, they will be credited to your Demat account. If not, your blocked amount will be released.
5. Listing: The shares are expected to be listed on the BSE and NSE on September 3, 2024. You can start trading your shares once they are listed.

Risks to Consider

While Premier Energies IPO has many positive aspects, it’s essential to remember that investing always carries risks. Here are a few things to consider:

1. Market Volatility: The stock market can be unpredictable. Even if a company has strong fundamentals, external factors like economic conditions or global events can affect its stock price.
2. Industry Competition: The renewable energy sector is competitive. While Premier Energies is a significant player, it faces competition from both domestic and international companies.
3. Regulatory Risks: Changes in government policies related to renewable energy, tariffs, or taxes could impact the company’s profitability.
4. Execution Risks: While the company has ambitious expansion plans, delays or challenges in executing these plans could affect its growth prospects.

Conclusion

Premier Energies IPO offers an exciting opportunity for investors who believe in the future of renewable energy. The company’s strong financial performance, growth plans, and position in the solar energy sector make it an attractive option. However, it’s crucial to do your research and consider the risks before making any investment decisions.

References

• India Infoline: Premier Energies IPO
• Economic Times: IPO Details
• Livemint: Premier Energies Financials