Premier Energies - Worth investing even after IPO? Premier energies fundamental Analysis

Summary

The video offers an in-depth analysis of Premier Energies' upcoming IPO, discussing its potential for long-term investment beyond the initial hype. It delves into the solar power value chain, highlighting Premier Energies' integrated role in manufacturing and services. The script examines financials, growth drivers, IPO details, and risks, emphasizing the company's expertise in solar cell manufacturing and its strategic expansion plans, while cautioning about market competition and dependency on government policies.

Takeaways

• 📈 Premier Energies is creating a buzz with its IPO, offering potential for quick gains but is more valuable for long-term investors interested in the company's growth potential post-IPO.
• 🌞 The company has 29 years of experience in the solar industry and is involved in various stages of the solar power value chain, including manufacturing, EPC projects, and power production.
• 🏭 Premier Energies is one of the few integrated players in India with capabilities in both solar cell and module manufacturing, which is crucial for the sustainability of the business.
• 📊 The solar power value chain includes raw material purification, wafer slicing, cell manufacturing, module assembly, and installation by EPC companies, with cell manufacturing being the most complex and high-margin segment.
• 📉 Despite being the third-largest solar module manufacturer globally, India has a dependency on China for solar cell manufacturing, which poses a risk to the industry.
• 📈 The demand for electricity in India is expected to increase significantly due to urbanization, industrialization, and the rise of electric vehicles, which is a key growth driver for the solar sector.
• ⚡ The Indian government's focus on making India a global manufacturing hub and its massive solar installation plans are supporting the growth of the solar sector.
• 💹 Premier Energies has shown exceptional financial growth with a 4X increase in revenue in the last two years and a significant increase in profitability.
• 💼 The IPO details indicate a massive expansion plan, with the fresh issue being utilized for establishing a 4 GW solar PV topcon cell and module manufacturing facility.
• 📊 At the upper price band of the IPO, the company's valuation seems high, considering the gray market premium and the financials of the last fiscal year.
• ⚠️ Key risks for investors include Chinese competition, government policy changes, domestic competition, concentration risk from top customers, raw material cost risk, and the rapid advancement in solar technology.

Q & A

What is the main focus of the video script about Premier Energies' IPO?

The video script focuses on analyzing whether it is worth investing in Premier Energies post-IPO, discussing its business model, its position in the solar value chain, future growth drivers, financials, IPO details, valuation, and key risks associated with the investment.

What is the significance of the gray market premium mentioned in the script?

The gray market premium of more than 80% indicates a high level of initial interest and speculative trading in Premier Energies' shares before the official listing. It suggests that the market expects the stock price to rise significantly after the IPO, but it also comes with the risk that the stock may be overvalued at the outset.

What are the different segments of the solar power value chain explained in the script?

The script explains the solar power value chain, which includes the manufacturing of solar photovoltaic cells, particularly bifacial monocrystalline PERC cells, the production of solar modules, execution of Engineering, Procurement, and Construction (EPC) projects, operation and maintenance, and independent power production.

How does Premier Energies fit into the solar module and cell manufacturing segment?

Premier Energies is an integrated player in the solar module and cell manufacturing segment, being the second-largest integrated player in India with 29 years of experience. It has a significant presence in the manufacturing of solar cells and modules, contributing to 25% of the total solar cell installation capacity in India as of F24.

What are the key growth drivers for the solar sector and Premier Energies as discussed in the script?

The key growth drivers include urbanization and industrialization increasing electricity demand, the rise of electric vehicles, government initiatives to boost manufacturing and solar power installations, the competitive tariff rates of solar power, and India's potential to harness abundant sunlight for power generation.

What are the financial performance indicators of Premier Energies from F22 to F24 and Q1 of F25?

Premier Energies' revenue grew from 742 CR to 3,143 CR between F22 and F24, with a significant increase in Q1 of F25. The company's profitability also improved, with a PAT of 289 CR in F24 and 245 CR in Q1 of F25. The company's EBITDA margin increased from 7% to 22% during the same period.

What is the purpose of the fresh issue in Premier Energies' IPO?

The fresh issue worth 1,291 CR from Premier Energies' IPO is intended to finance the establishment of a 4 GW solar PV topcor cell and 4 GW solar PV topcor module manufacturing facility in Hyderabad, as part of the company's expansion plan.

What are the key risks associated with investing in Premier Energies as highlighted in the script?

The key risks include Chinese competition, adverse changes in government regulations, domestic competition, concentration risk from dependency on a few customers, raw material cost risk, and technology risk due to rapid advancements in solar cell technology.

How does the script advise potential investors to approach Premier Energies' IPO?

The script advises potential investors to consider the company's long-term growth potential, financial performance, and key risks before investing in the IPO. It suggests waiting for a better entry point if the IPO is already hyped and tracking the company's quarterly results for future investment decisions.

What is the significance of the anchor investment in Premier Energies' IPO, as mentioned in the script?

The anchor investment in Premier Energies' IPO, which received a positive response from institutional investors including large mutual funds and FII/DII investors, indicates strong institutional interest and confidence in the company's prospects, which can be a positive signal for other potential investors.

Outlines

00:00

🌟 Premier Energies IPO Overview and Solar Sector Analysis

This paragraph introduces the upcoming IPO of Premier Energies, a company with significant buzz in the market. It addresses the potential for quick gains through the IPO, noting the high gray market premium but also emphasizes the importance of understanding the company's business model for long-term investment. The speaker outlines the content of the video, which includes an explanation of the solar value chain, Premier Energies' business model, financials, IPO details, valuation, and key risks. The target audience is long-term investors seeking knowledge, and the video positions Premier Energies as an integrated player in the solar power sector with 29 years of experience.

05:00

📈 Premier Energies' Position in the Solar Module and Cell Manufacturing

This section delves into the details of Premier Energies' role in the solar module and cell manufacturing industry. It discusses India's position as the third-largest solar module manufacturer globally and highlights Premier Energies' standing as the fourth-largest solar module manufacturer and the second-largest integrated player in India for solar cell manufacturing. The paragraph also touches on the complexities of solar cell manufacturing, the dependence on China for solar cells, and the evolving landscape with new companies planning to set up manufacturing plants. Premier Energies' strength in integrated manufacturing is underscored, along with its status as the largest Indian exporter of solar cells to the US.

10:00

🚀 Key Growth Drivers for Premier Energies and the Solar Sector

The paragraph identifies the key growth drivers for Premier Energies and the solar sector as a whole. It starts with the impact of urbanization and industrialization on electricity demand, the rise of electric vehicles and the need for charging stations, and the government's focus on making India a global manufacturing hub. The paragraph also discusses the government's massive solar installation plans, the lowest tariff rates for solar power, and the potential for India to harness solar power due to abundant sunlight. The speaker emphasizes the importance of tracking the company's financial performance and future growth to ensure sustainability.

15:00

💼 Financial Performance and IPO Details of Premier Energies

This section provides an overview of Premier Energies' financial performance, showing significant growth in revenue and profitability over the past few years. The company's debt levels and the risk associated with it are mentioned, along with the details of the IPO, including the price band, issue size, and the purpose of the fresh issue funds. The paragraph also discusses the company's expansion plans, the dilution of promoter stake post-IPO, and the strong response from institutional investors, indicating confidence in the company's prospects.

20:02

⚠️ Key Risks Associated with Premier Energies and the Solar Sector

The final paragraph outlines the key risks associated with investing in Premier Energies and the broader solar sector. It covers the risks of Chinese competition, potential adverse changes in government regulations and policies, domestic competition, concentration risk with top customers, raw material cost risk, and technology risk. The speaker advises investors to track the company's growth while being mindful of these risks, especially considering the sector's reliance on government schemes and anti-dumping duties to compete with Chinese companies.

Keywords

💡IPO

An IPO, or Initial Public Offering, is the process by which a private company goes public by offering its shares to be traded on a stock exchange for the first time. In the video, the theme revolves around the IPO of Premier Energies, discussing its potential and the hype surrounding it in the market.

💡Solar Value Chain

The solar value chain refers to the sequence of activities involved in the production and distribution of solar energy products, from raw material sourcing to the end consumer. The video explains the entire solar value chain, emphasizing Premier Energies' role as an integrated player across various stages, including manufacturing of solar cells and modules, EPC projects, and power production.

💡Monocrystalline Solar Cells

Monocrystalline solar cells are a type of high-efficiency solar cell made from a single crystal structure. The script mentions that Premier Energies is involved in the manufacturing of bifacial monocrystalline PRC cells, indicating the company's focus on high-quality solar cell production.

💡EPC Projects

EPC stands for Engineering, Procurement, and Construction, which in the context of the video, refers to companies that handle the design, procurement, and construction of solar power projects. Premier Energies is noted to be involved in the execution of EPC projects, providing end-to-end solar services.

💡Operation and Maintenance

Operation and Maintenance (O&M) refers to the ongoing management and upkeep of solar power plants to ensure their efficient and reliable operation. The script highlights that Premier Energies is also involved in the O&M of solar power plants, showcasing its comprehensive service offering.

💡Gray Market Premium

A gray market premium is the additional price that investors are willing to pay for shares of an IPO before they are officially listed on the stock exchange, indicating high demand. The video mentions an 80% gray market premium for Premier Energies' IPO, suggesting strong investor interest.

💡Solar Power Sector

The solar power sector encompasses all businesses and activities related to the generation of electricity from sunlight, including manufacturing, installation, and maintenance of solar panels and systems. The video discusses the growth potential and key drivers of the solar power sector, with Premier Energies being a significant player.

💡Backward Integration

Backward integration is a strategy where a company starts to produce its own raw materials or components to gain greater control over costs and supply. Premier Energies has invested in integrated solar cell and module manufacturing, which is highlighted in the script as a strategic move for cost control and market access.

💡DCR Policy

DCR stands for Domestic Content Requirement, a policy that mandates a certain percentage of components, including solar cells and modules, to be sourced from domestic manufacturers. The video explains how this policy benefits companies like Premier Energies by making their products more attractive in the domestic market.

💡Solar Tariff Rates

Solar tariff rates refer to the price at which solar power is sold to consumers or the grid. The script points out that solar power has the lowest tariff rate among various fuel sources in India, indicating its competitiveness and potential for growth.

💡Technology Risk

Technology risk in the context of the solar sector refers to the potential obsolescence of existing manufacturing processes due to rapid advancements in solar technology. The video warns that companies must keep up with technological innovations to remain competitive, which is a key risk factor for Premier Energies and others in the industry.

Highlights

Premier Energies' IPO is creating a buzz with a potential for quick gains due to a gray market premium of over 80%.

The video provides an in-depth analysis of Premier Energies' business model and its position in the solar sector for long-term investors.

Premier Energies, established in 1995, has 29 years of experience in the solar industry with an integrated presence across the value chain.

The company is involved in manufacturing bifacial monocrystalline PRC cells, solar modules, and executing EPC projects, with a focus on operation and maintenance.

Understanding the solar power value chain is crucial for investors, with Premier Energies playing a role in multiple stages, including cell manufacturing and EPC services.

India's solar module manufacturing capacity has reached 72 GW, with Premier Energies holding the fourth position in annual install capacity.

Solar cell manufacturing is a complex process with high investment and risk, yet it is a high-margin business essential for future sustainability.

Premier Energies is one of the few companies involved in solar cell manufacturing in India, with a 25% contribution to the total install capacity.

The company's revenue in FY24 was primarily from the sale of solar cells and modules, with a significant growth in profitability.

India's solar cell manufacturing capacity is only 8.1 GW, indicating a high dependence on imports, particularly from China.

Premier Energies is the largest Indian exporter of solar cells to the US, holding a 100% market share in FY24.

The company's financial performance has seen exceptional growth, with a 4X increase in revenue from FY22 to FY24 and a significant rise in profitability.

The IPO details of Premier Energies include a price band of 427 to 450 rupees, with the funds being utilized for a massive expansion plan.

The company's valuation at the upper price band indicates a market cap of 2,284 CR, which is on the higher side considering the gray market premium.

Key risks for Premier Energies include Chinese competition, government regulation changes, domestic competition, concentration risk, raw material cost risk, and technology risk.

The video emphasizes the importance of understanding the solar value chain and the company's position within it for informed investment decisions.

Transcripts

hey everyone after a long time I'm

covering a new IPO of Premier energies

that is already creating a lot of buzz

in the market now if you're someone who

is only looking for tip to make quick

money from IPO you can skip this video

there's an excellent gray Market premium

of more than 80% on the company so

listing is expected to be great however

it's a lottery and very few people would

get it the key question is is it worth

investing in the company post IPO

because one load of IPO allotment won't

make any difference in your life if

company has multifold growth potential

it's important to understand its

business model and identify if it is

worth investing in the company post IPO

or not also these days there's a lot of

hype around solar stocks and I'm sure

majority of people have no clue about

the value chain of solar sector how it

operates and key players in the space so

in this video I explained the entire

solar value chain along with detailed

analysis on Premier energy business

model along with its future growth

driver financials IPO detail valuation

and key risk that would help you to get

all the required details to consider the

company after listing but this video is

only for long-term investors who are

genuinely seeking knowledge all right

let's get

started Premier energies was established

in 1995 so company has a vast 29 years

of experience in solar industry it is

involved in first manufacturing of solar

photo voltic cell in particular bifacial

monocrystalline PRC cell so PRC is a

technology used in solar cell

manufacturing second company is also

manufacturer of solar modules then third

it is involved in execution of EPC

project that include end to-end solar

services and then fourth companies also

involved in operation and maintenance

and finally it has its independent power

production through 2 megaw solar power

plant in jarand in short Premier

energies is an integrated player with

presence across the value chain of solar

power sector some of its client include

ntpc tataa power Panasonic shaky pump

First Energy luminous and so on now this

is very important as an investor you

should understand the value chain of

solar power and understand which company

fall into the various stages of this

value chain so let us first understand

the solar power value

chain solar PV module value chain

include five critical process for

transforming raw material which is

polysilicon into finished solar panel

that are ready for electricity

generation

first of all polysilicon is used as a

raw material which is purified and

refined into high Purity monocrystalline

ignots this stage require significant

energy consumption ignots are then

sliced into thin single Crystal silicon

wafer these Wafers goes through a very

complex process of value chain which is

solar cell manufacturing that include

steps like texturing diffusion laser and

so on these solar cells are then

connected and encapsulated with

protecting layers like glass encapsulant

and framed for durability and

installation while module manufacturing

is more of an assembly process sell

manufacturing on the other hand is the

most complex process in solar

manufacturing value chain cell

manufacturing is exposed to multiple

risk and attract three to four times

higher investment however this is a high

margin business and key for

sustainability in the future now once

solar modules are ready they are

procured by solar APC companies along

with inverter cable and all the items

from the market and these EPC companies

then install these solar system for

instance s SW solar is India's largest

solar EPC Company please note that EPC

is a low margin business then wari group

is a leading player in Indian solar

value chain where wari energies is the

largest solar mod manufacturer in India

although it's not yet listed on the

stock exchange but it would be

interesting to see when wari launched

this IPO of wari energies then wari

renewable which is a subsidiary of War

energy is the EPC arm of the company

which is a listed business

finally you have power producers like

ntpc that use the solar power setup to

produce power for instance tataa power

is a complete integrated player in solar

sector with end to endend solar cell

manufacturing module manufacturing EPC

work as well as power production

likewise Premier energies is an

integrated player I hope you got a fair

idea of solar power value chain you

can't invest money in any Solar Company

randomly for more such knowledge you can

also explore my weekly video series that

include One exclusive video video every

week where I discuss many potential idea

including High conviction stock where

I'm investing my own money the idea is

to share my knowledge and conviction for

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potential opportunities you can get the

detail on my website or explore the

joint button on this YouTube channel

next let us look at the solar module and

solar cell manufacturing segment in

detail where premium energy has its

presence so today India's module

manufacturing capacity has has reached

approximately 72 gaw as of

f24 this position India as the third

largest solar module manufacturer in the

world after China and Vietnam now as of

today there are more than 100 solar

module manufacturer in India however top

10 manufacturer have a cumulative

manufacturing capacity of 50 gaw out of

72 gaw as of f24 this slide shows the

solar module annual install capacity by

companies in gwatt and percentage share

in f24 why energy is leading with 17%

share followed with renew power that has

9% share Tata power has 7% share Premier

energy has 6% state so it is at Fourth

position followed with Mundra solar

which is part of adani group ryzen solar

Vikram solar and so on please note that

solar cells are the most crucial element

of solar module which is responsible for

converting sunlight into electricity

although India has 72 gaw of solar

module manufacturing capacity Indian

solar s Manu manufacturing is only 8.1

gaw as of f24 the reason is solar cell

manufacturing is a very complex process

that require High expertise as a result

India has to import these solar cells

from China so there is high dependence

on China currently there are very few

companies involved in solar cell

manufacturing and premium energy is one

of them this slide shows solar cell

analyzed install capacity by companies

in gwatt and percentage share Mundra

solar part of adani group has 50%

contribution and total install capacity

followed with Premier energies with 25%

contribution then you have Jupiter solar

websol which is a listed company by the

way and then tataa power Al the solar

cell manufacturing scenario is fast

changing with more than 15 companies

planning to set up various level of

integrated solar manufacturing plants

including solar cell most of these plant

will be commissioned by

F28 now one of the strength of Premium

energy is its capability of integrated

solar cellent module manufacturing while

there there are many players in solar

module manufacturing space including the

Vari group there are very few player in

solar cell manufacturing and premium

energy with 29 years of experience in

the Solar manufacturing industry stand

out as the second largest integrated

player in India at the end of f24 Out of

the current top 10 solar module

manufacturer in the country only three

companies that is Mundra solar Premier

energies and tataa power have integrated

solar module and cell manufacturing

facility premium energies in invested in

integrated solar cell and module

manufacturing to gain greater control on

module prices this backward integration

has helped the company gain access to

domestic DCR module Market which

requires solar cell and module to be

manufactured in India and hence

resulting in Greater cost control for

the company and improved traceability of

raw material by the way solar cells

exports from India are expected to

increase in coming year as USA is

ramping up its module manufacturing

capacity and China cannot sell due to

certain trade barriers so this China

plus one strategy would play a key role

in premium energy export market growth

in fact Premier energies is the largest

Indian exporter of solar cell to the US

in f24 which is almost 100% of the

market share and us is one of the

largest market for solar modules

globally here one of the most important

thing you should know that there are

various Technologies in solar cell

manufacturing and is an evolving thing

the reason behind evolution in

technology is to make solar cell more

efficient and this is a key to growth

for company those who work on latest

technology of solar cell will benefit

from it and those who fail to evolve

cannot sustain this slide shows shares

of different solar cells in the future

currently PRC technology has highest

share but it is expected to decline in

the future you can see that it has

efficiency of

23.6% then you have topcor with better

efficiency that will command a bigger

Market in the future however technology

is evolving and by 2026 tendem is

expected to make an entry and grow

quickly because of high highest

efficiency so solar cells are very

complicated and you need to track the

development in solar cell technology to

write the innovator in the sector now

this slide gives the breakup of

company's Revenue in f24 86% revenue of

the company was from sale of products at

manufacturer that include sale of solar

cell that contribute 22.4% in the

revenue and sale of solar module that

has highest contribution at

64.3% company also gener income from

sale of traded Goods that contributed

88.2% f24 Revenue then EPC projects

contributed another 4.7% revenue from

power supply is minute in terms of

import versus export domestic Market

contributed 86% in f 24 and Export

contributed 14% now let us try to

understand the key growth driver for

solar sector and Premier energies now

one of the biggest grow driver for the

sector is urbanization and

industrialization fueling the demand for

electricity in India in the next few

years the demand for electricity is

going to increase multiple times due to

factor like migration of people from

rural to Urban part of the country that

would consume more power then growing

middle class with Rising disposable

income is fueling demand for appliances

then modern factories rely heavily on

electricity as Industries adopt

Automation and advanced technology their

consumption would increase even further

creating huge demand for electricity

then second driver is Rise of electric

vehicle 21st centur is witnessing a

major shift from Petrol diesel vehicle

to electric vehicle by 2030 government

is targeting 30% EV penetration for

Private Car 70% for commercial vehicle

and 80% for two-wheeler and

three-wheeler if you can achieve even 70

75% of this target there's going to be a

demand for 20 lakh charging station in

India to cater to this scale of EV

vehicle this will create a massive

demand for electricity in the years to

come then third government focused to

make India a global manufacturing Hub

there's no doubt that Indian government

has Keem on increasing contribution from

manufacturing sector that currently

contribute around 17% in India's GDP

that's where government has launched

various schemes like P make in India

atbar bat and so on for instance Indian

government has implemented PL scheme on

high efficiency solar PV module with an

outlay of 24,000 CR then government has

implemented DCR policy that mandates a

specific percentage of component

including sell and module used in solar

power project particularly those funded

by government to be sourced from

domestic manufacturer indan government

also lis Duty or import of solar cells

and IM modules effectively acting as a

protective shield for domestic

manufacturer these Duties are applied

irrespective of the origin country thus

making domestically produced solar cell

and solar module more attractive to

domestic solar players then fourth

driver is massive solar installation

plan of Indian government India is

making a big shift from coal to

renewable energy primarily through solar

power installed power generation

capacity in India is expected to reach

620 gaw by 2028 and renewable would

account for approximately 54% share of

this install capacity this slide shows

the install power generation capacity in

India by fuel sources N fi8 Out of 344

gaw of power coal contributed 223 gaw

that is 65% of total capacity solo which

is in green color was 22 gwatt in fi 24

power capacity increased to 442 gwatt

and within this coal contribution is 243

gaw thermal contribution has reduced to

55% and solar contribution in total

installation is now 82 gwatt which is a

growth of

24.8% and as per Frost and solivan

Report the total install capacity would

reach levels of 622 gaw by F28 out of

this 198 gaw is expected to come from

solar so that's another 24.8% CGR growth

expected in solar installation in the

next four years clearly solar power is

going to lead the growth in renewable

energy in India then fifth growth driver

is solar power has the lowest tariff

rate across fewel sources in India this

is a very interesting slide that shows

the average cost of electricity Supply

and average solar tariff in rupee per

kilowatt hour from 2010 to 23 in 2010

average cost of electricity Supply was

3.6 Kow hour now that has now increased

to 6.7 rup however average solar tariff

rate has significantly reduced from 11

rupee to 2.5 rupee comparing all type of

fuel sources average solar tariff in the

country is even lower than many thermal

power plants this indicates a

sustainable and viable future for solar

energy in the coming years and the fact

that India is blessed with emple sunight

probably the highest among the top

economies in the world so if we can

harness the solar power efficiently we

can significantly reduce dependency for

import of fossil fuel and in fact we can

become the net exporter of power to the

world in the next few decades and that

would be a huge achievement for the

company now let us look at company's

financial performance so this slide

shows the historical financials of the

company between F22 to fi 24 and then q1

of fi25 please note that this data is in

million rupe so Revenue has grown from

742 CR to 428 CR than 3,143 CR that's

more than 4X growth in last 2 years and

q1 fi25 revenue is already half of f24

Revenue so Company's top line has grown

at a very fast rate in last 2 and a half

year Abita has also grown at exceptional

rate from 7% to 15 and now at 22%

company was in loss at profit level due

to heavy investment but has become

profitable in f24 profit for text stood

at 289 CR interestingly in q1 of fi25

itself company has made 245 CR of profit

so again exponential growth companies

Roe and Ro are also grown at a very fast

rate and today it commands a very high

profitability on debt company has a

current debt of 1,200 CR and that

translate to debt to equity of

1.86 so debt of the company is on higher

side which create a risk in case there's

a problem in the business as of today

company has an aut book of 6,000 CR so

there's a good visibility for the

company overall Financial looks good but

it's important to track the future

growth and ensure that company is able

to sustain this growth and margin only

catch as of today is higher debt now let

us look at the ipu

details so Premier energy IP window is

between 27 to 29 August price band is

427 to 450 rupe issue size is 2,830 CR

out of this there's a fresh issue worth

1,291 CR and an offer for sale worth

1,539 CR at an upper cap this 1,291 CR

of fresh issue would be utilized for

investment in the subsidary Premier

energy global environment private

limited for part financing the

establishment of a 4 gaw solar PV topcor

cell and 4 gaw solar PV topcor module

manufacturing facility in Hyderabad

tangana currently company has got 2 gaw

of solar cell manufacturing so the goal

is to make it 6 gaw and has 4 gwatt of

current solar module manufacturing

facility with goal to make it 8 8 gaw so

massive expansion plan on the card

please note that this manufacturing plan

of the company has a total kex of 3,400

CR out of this 1200 CR would be utilized

from Capital raise from this IPO and

remaining 2,200 CR would be via debt

this is on top of the current date of

1200 CR so after this the debt of the

company would increase to 3,600 CR

before IPO promoter stake in the company

is around 7 2% and after IPO it would

dilute to 66% the good thing is that

majority of Stak sale in the offs is

from a PE firm that invested in the

company in 2021 promoters are not

allting their Stak significantly Premier

energies has already completed the

anchor investment ahead of IPO and

company has received stealer response

from both FIS and dis including names

like namura Black Rock government

pension fund sdfc Abu Dhabi IC nepon

Ashoka white talk kotak exis Quant and

and so on a total of 60 mutual fund

houses a total of 16 mutual fund from

various FIS and D have applied for this

IPO that clearly shows the interest

among institution investors and the

company finally if you look at the

valuation at an upper price band of 450

rupee company would command a market cap

of 2,284 CR this is against f24 sale of

3,171 CR however company has already

achieved half of f24 Revenue in q1 of

fi2 24 itself where Revenue stood at

1668 CR and companies Pat for f 24 was

231 CR and q1 of fi25 Pat itself is 198

CR company's EPS for f24 is 5.9 so post

IPO and dilution basis of fi 24 earning

company would command a p of 85 post IPO

which is certainly on the higher side

but remember that in q1 of fi25 itself

company has generated a pat of 186 CR

which we have not considered as we are

looking at fi 24 running going forward

everything would boil down to Future

running growth if company can sustain

its growth share price can further go up

but the catch is that this IPO is

already hyped so compan is already

commanding a gray Market premium of more

than 80% so post IPO with 80% premium

this issue would become expensive it

means if you don't get the lottery it's

better to wait for better entry point

and track the company quarter result now

before you invest in IPO let us look at

the final part of the video which is

very very important and that is key risk

so the first biggest risk is Chinese

competition India has does not have

sufficient capacity for solar cell and

there is no capacity for polysilicon

ignots and wafer manufacturing it means

the entire solar program is vulnerable

to disruption in supply chain and

strategic pricing by Chinese sources

second viscus adverse change in

government regulation today Indian solar

industry is growing in spite of extreme

competition from China and because of

government support in terms of various

policies like P make it India atbar bat

and so on government even put

antidumping d your import of various

product to benefit domestic Indian

company however any adverse change in

government policy can pose high risk to

solar sector profitability and this is

one of the biggest risk for the industry

then third risk is domestic competition

there are already many players in the

sector and there's a growing competition

in the Solar industry so it's not easy

to maintain margin only integrated

companies that are backward integrated

like premium energies can sustain this

competition but for them also it's

important to maintain their

profitability and ensure that they do

not not dilute margin for growth so this

competition risk would always exist then

fourth risk is concentration risk top

five customer of the company contributed

43% in company's f24 Revenue so there's

a dependence on Selected Few customer

and any loss of revenue from Top

customer can impact Company's top line

and bottom line fifth risk is raw

material cost risk company's

manufacturing operation rely on a stable

supply of raw material and component

including your silicon wafer and your

other critical inputs

so disruption in supply chain due to

geopolitical tension then logistical

issues or supplier insolvency could

result in production delay increase cost

and an inability to fulfill customer

order so raw material risk would also

exist and final six risk is technology

risk for solar cell as rapid advancment

and solar technology can make existing

manufacturing processes obsolete

technology risk for solar cell is also a

key factor to consider so in this video

we discuss the business model of Premier

energies along with the entire value in

solar power like I said earlier there's

a hype around solar sector in last few

years and people are blindly investing

in solar companies without trying to

understand the value chain and which

player fit into which part of solar

value chain Premier energies is a

leading player in the country with

integrated solar cell and module

manufacturing there are currently only

three players with integrated solar

business and Premier energy is one of

them especially solar cells are

extremely complicated part of the value

chain where premium energy has the

expertise this would help them command a

better margin over other players company

has been growing at a very fast rate in

the last few year but we only have last

three years of data points there is

certainly a lot of potential in the

company solar is a sunrise sector with

multi-i growth potential but won't be a

smooth run now there is now there's

certainly a lot of potential in the

company where solar is a sunrise sector

with multi- growth potential but it

won't be a smooth ride there are many

risk in the business especially solar

sector has dependence on government

scheme and ENT Duty otherwise Indian

solar companies can't sustain Chinese

competition as Chinese companies are

Global leader in solar sector so it's

very important to track the growth of

the company while keeping all the key

risk in mind friends it took me a lot of

time to compile this knowledge I hope

you'll appreciate it thanks for watching

this video I'll see you next video till

then take care