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BACKGROUND

Premier Energies is a leading solar manufacturer with 29 years of experience, specializing in bifacial monocrystalline PERC and TOPCon solar cells and modules. Operating five facilities in Hyderabad, the company has a combined capacity of 2 GW for solar cells and 4.13 GW for modules, with plans for significant expansion by Fiscal 2027. Company serves major clients like NTPC and TATA Power Solar.

Objects and Details of the Issue:

The public issue consists of Offer For Sale aggregating upto Rs 1,539 Cr. And fresh issue up to Rs 1,291 Cr. Company proposes to utilize the Net Proceeds towards:- (i) Investment in subsidiary, Premier Energies Global Environment Private Ltd for part-financing the establishment of a 4 GW Solar PV TOPCon Cell and 4 GW Solar PV TOPCon Module manufacturing facility in Hyderabad aggregating to Rs. 968.6 Cr (ii) General corporate purposes.

Investment Rationale:

* Integrated Manufacturer of Solar Cells and Modules

* Diverse Customer Base and Strong Order Book

* Expertise in Solar Cell Production Lines

* Develop and Enhance Rooftop Solar Solutions

* Leverage Market Opportunities to Grow Domestic Business

* Enhancing Manufacturing Capabilities through Advanced Technology

Valuation and Recommendation:-

Premier Energies is the second-largest solar producer in the country. The company focuses on advanced technologies like TOPCon solar cells, enhancing its efficiency and innovation.With a strong order book and favorable government policies, it holds a competitive edge. Compared to its peers, company shows exceptional revenue growth, a robust CAGR of 65% over FY21-24, EBITDA margin of 15.2%. As its capacity is underutilized currently as a large portion of it came on-stream in FY24 and Q1FY25, its asset turns are lower than peers and thus it’s ROCE is at 20% vs 25% for peers. We believe Premier is available at a substantial discount to its peers at FY24 EV/EBITDA of 44.5x compared to 81.4x for peers. Even on the EV/GW (installed capacity) metric, Premier appears attractive vis-avis peers. Thus we recommend to Subscribe to the issue

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