SListed below is India’s 2nd largest integrated solar cell and module manufacturer which aims to be the largest solar player with current capex plans, the company adds to more than 95 percent of solar cell exports to the USA and Blackrock has made investments in it.
About the Company
Premier Energies Limited is an integrated player in the solar ecosystem engaged in manufacturing and supplying integrated solar cells and solar panels. The company’s product portfolio includes Cell, Solar Module, Mono facial and Bifacial, modules, EPC Solutions, and O&M Solutions. As of July 31, 2024, it has a strong order book of Rs. 5,926.56 Crores
Installed Capacity
Premier Energies Limited is the second largest solar cell manufacturer in India with an annual installed capacity of 2 GW and a 25 percent market share and it is the 4th largest manufacturer of solar models with an annual installed capacity of 4.13 GW out of India’s 72 GW Capacity and 6 percent market share.
Revenue breakdown
It generated 64.32 percent of its revenue from the sale of solar modules, 22.48 percent from the sale of solar cells, 4.3 percent from EPC Projects, and 8.21 percent from the sale of traded goods. Revenue share from the domestic market is 86.01 percent and exports were 13.99 percent.
Capex Plans
It has an installed capacity of 2GW Solar cell manufacturing facility with work going on for setting up a 1GW along with goals of expanding it to 7 GW and a 4 GW Solar Module manufacturing facility with goals to expand it to 8 GW with a capex plan of Rs. 3,400 Crores by part financing it with the IPO proceeds and funding from other sources.
Strengths
Even though India has 72 GW of solar module manufacturing, it only has 8.1 GW of solar cell manufacturing capacity, so Premier Energies Limited being the 2nd largest cell manufacturer provides it a competitive advantage as the Indian export of solar cells is expected to rise in the coming years
As the USA is ramping up its module manufacturing capacity and China being not able to export in entire due to trade barriers following the China Plus One strategy, Premier Energies will benefit from it as it is the largest Indian exporter of solar cells to the USA in FY24 with exports greater than 95 percent of the country exports.
Solar Cells are the most crucial element of solar modules responsible for converting solar energy into electricity, and manufacturing it is the most complex process in the solar manufacturing value chain as it is exposed to multiple risks and requires 3-4x higher investment, thereby limiting the entry of new players and it offers high margins, and sustainability.
Blackrock and other investors in IPO
Premier Energies Limited received a stellar response for its anchor investments from big names like Blackrock, Nomura, Abu Dhabi Investment Authority, DSP India, Morgan Stanley, PNB Paribas, HDFC, ICICI, and many other Indian and global pension/equity funds. National Pension services managed by Blackrock Institutional Trust Company subscribed 3.5 percent of the anchor portion.
Presence and Client base
It has a global presence with its products being exported to countries like the United States, Hong Kong, South Africa, Bangladesh, Norway, Nepal, France, Malaysia, Canada, Sri Lanka, Germany, Hungary, the United Arab Emirates, Uganda, Turkey, South Korea, China, Taiwan, and the Philippines.
It has a strong clientele base with well-known players NTPC, TATA Power Solar Systems Limited, Panasonic Life Solutions Private Limited, Shakti Pumps, Luminous, Continuum, First Energy, Blue pine Energies Private Limited, Green Infra Wind Energy Limited, Madhav Infra Projects Limited, Solara square Energy Private Limited and many others.
Financials & Ratios
Its Revenue from operations grew by 117 percent YoY from Rs. 1,463.21 Crores in FY23 to Rs. 3,171.31 Crores in FY24, accompanied by a loss of Rs. 13.34 Crores to profits of Rs. 231.36 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 43.73 percent and a return on capital employed (ROCE) of 25.65 percent. It has reported a high debt-to-equity ratio of 1.86.
Price Movement
With a market capitalization of Rs. 49,377 Crores, the shares of Premier Energies Limited closed at Rs. 1,095.40 per equity share, up 8.76 percent from its previous day’s close price of Rs. 1,007.20.
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