Solar cell and module manufacturer Premier Energies to enter primary market with Rs 2,000 crore public issue

Premier Energies, India’s second-largest integrated solar cell and module manufacturer, is gearing up to enter the primary market with a public issue of over Rs 2,000 crore. According to banking sources, the company is expected to file its draft red herring prospectus in the coming weeks.

About 70% of the issue size is anticipated to constitute a fresh fund-raising initiative aimed at securing growth capital for expansion purposes, with the remaining portion allocated for an offer for sale from existing shareholders.

The Hyderabad-based company, backed by Washington, DC-based GEF Capital, joins the ever-increasing number of companies operating on the energy transition theme that are raising growth funding.

An email query sent to the company did not elicit any response.

Incorporated in 1995 by Surender Pal Singh, Premier Energies is the second-largest integrated solar cell and module manufacturing company (capacity-wise) in India. It has a 3 GW operating module line and a 2 GW operating Cell Line at Hyderabad, Telangana, which is India’s only LEED Gold-rated manufacturing facility under the USGBC rating program. The company also derives a small portion of its revenue from solar EPC business.

The company increased its scale of operations to a 2GW cell line and 3 GW module line in December 2023, driven by a robust demand scenario. According to banking sources, this has led to a twofold increase in revenue from Rs 1,453 crore in FY2023 to an estimated Rs 3,000 crore in FY2024.

The company has a cumulative order book of about 1800 MW for modules and 200 MW for cells from companies like NTPC IRCON, among others. Orders worth Rs. 4,000 crore to be executed over the next 3-4 quarters.

With the proceeds of the IPO, the company is likely to add another 4GW of module line and 4GW of TopCon cell line to enhance its capacities further and upgrade to TopCon technology. Both of these projects are expected to be undertaken in 2025.

The government implemented protectionist measures, including a basic customs duty (BCD) of 40% on imported solar modules and 25% on solar cells starting from April 2022. Additionally, the implementation of the approved list of models and manufacturers (ALMM), coupled with incentives provided to domestic players under the production-linked incentive (PLI) scheme, has bolstered the cost competitiveness of domestic modules compared to imported ones

Government-approved schemes such as Kisan Urja Suraksha Utthan Mahabhiyan, Central Public Sector Undertaking and Surya Muft Bijli rooftop scheme are also pushing up demand.