The Rs 2,830-crore initial public offer (IPO) of Premier Energies Ltd received bids worth more than Rs 1.48 lakh crore. With this, it became the second company after Tata Technologies Ltd to cross Rs 1 lakh crore bidding value during the initial share sale phase. The robust demand was led by institutional investors who made bids worth Rs 1.1 lakh crore.
The shares of Premier Energies are in high demand in the unlisted market, commanding a grey market premium (GMP) of over 90 per cent as against the IPO price.
As per BSE, investors placed bids for 3,30,91,03,446 equity shares, or 74.13 times, compared to the 4,46,40,825 equity shares offered. The allocation for qualified institutional bidders (QIBs) was subscribed 216.67 times on the final day, while the portion reserved for non-institutional investors (NIIs) saw a subscription of 49.79 times. The employee portion was booked 10.79 times and the category kept for retail investors was booked 7.30 times.
The Telangana-based company sold its shares in the price band of Rs 427-450 apiece. The IPO included a fresh share sale of Rs 1,291.40 crore and an offer-for-sale (OFS) of 3.42 crore equity shares.
Brokerages were largely positive on the issue and suggested investors to subscribe to it with a long-term view. They remained positive on its niche business, strong market share across the globe, experience management and diversified customer base. However, the rise in input cost price, dependence on select customers, incurring of losses, and limited product range were the major concerns for the IPO.
"Premier Energies is India's second-largest integrated solar cell and module manufacturer. As of July 31, 2024, PEL has a strong order book worth Rs 5,926.6 crore, with 25 per cent from public sector undertakings and the remainder from private players," said Geojit Financial Services.
"PEL is trading at a P/E ratio of 88 times for FY24, which seems expensive. However, considering its extensive experience in module and cell manufacturing, backward integration strategies, export market exposure, and domestic manufacturing opportunities supported by various government policies," it added with a 'subscribe' rating for medium to long-term investment.
"The company also plans on expanding its overseas presence and increase its exports, especially in the US market through strategic backward integration of production chain and establishing manufacturing capabilities outside of India along with developing and growing its rooftop solar offerings to further improve its position" Master Capital Services stated while giving a 'Subscribe for long term' rating.
Kotak Mahindra Capital, JP Morgan India and ICICI Securities are the book-running lead managers of the issue, while Kfin Technologies is the registrar. Shares of the company are likely to be listed on both BSE and NSE with September 3, 2024 (Tuesday), as the tentative date of listing.
In a separate development, the solar equipment maker is in the eyes of activist investors after it sold an additional 1.92 crore shares, or 30.6 per cent of the issue size, to private investors ahead of its IPO.