Premier Energies IPO listing prediction: Will strong GMP fuel 100% returns?

Premier Energies listing price prediction: The unlisted shares of solar photovoltaic (PV) cell maker Premier Energies, which are set to debut on the bourses on Tuesday, September 3, 2024, continue to command a significant grey market premium (GMP) ahead of listing.  According to market sources tracking grey market activity, Premier Energies' shares are trading at a premium of Rs 470, representing a 104.44 per cent increase over the upper end of the IPO issue price of Rs 450. 

As investors anticipate the company's listing on the BSE and NSE, the strong GMP suggests a positive market reception. Based on the current GMP, Premier Energies shares are expected to list at approximately Rs 920, potentially offering investors a substantial return of nearly double their initial investment.

The IPO received overwhelming interest from investors, with a subscription rate of 74.38 times by the final day. This was largely driven by Qualified Institutional Buyers (QIBs), who bid an extraordinary 216.67 times the shares on offer.

Considering all parameters such as subscription demand, market sentiment, and sectoral importance, Prashanth Tapse, Senior VP (Research) at Mehta Equities, expects a robust listing gain of more than 60-70 per cent or even higher than the issue price of Rs 450 per share.

 

Tapse further said that, “the long-term sectorial story remains intact, but if we see an 80-100 per cent listing gain, we recommend allotted investors to book profits on the listing day. Such a listing gain would be justified based on the rationales mentioned above.”

According to him, the company's strategic alignment with government initiatives promoting domestic solar production, alongside its diversified customer base and recognition as a top performer in module reliability, suggests a promising future. In the long run, Tapse believes the market could give a premium multiple to its leadership position, which may also deliver decent gains post-listing. "Post-listing, on the valuation front, it could move from reasonably valued to stretched valuations, which would be a reason for profit booking attempts at high levels," he added.

Meanwhile, Shivani Nyati, Head of Wealth at Swastika Investmart, remains optimistic about the listing of Premier Energies shares and said that it is poised for a remarkable stock market debut. According to her, the company's strong fundamentals and growth prospects underpin this enthusiasm. Nyati further pointed out that Premier Energies boasts a diversified customer base, a robust order book, and a recent surge in profitability. While the company has faced challenges such as underutilised capacity and historical losses, its strong financial performance in FY24 demonstrates its resilience and ability to navigate industry headwinds.

"Although the solar manufacturing industry remains competitive, Premier Energies' strategic positioning and focus on innovation differentiate it. Considering the company's strong fundamentals, robust investor response, and favourable market conditions, Premier Energies is poised for an outstanding listing," Nyati added.

The public issue, which promised a fresh issue of 28,697,777 equity shares and an offer for sale, with promoters and investors offloading nearly 34,200,000 shares with a face value of Re 1 each, was available at a price band of Rs 427-450 with a lot size of 33 shares.

Premier Energies' IPO received broadly favourable reviews from brokerages including Reliance Securities, Deven Choksey, Anand Rathi Research, Choice, Geojit, Canara Bank Securities, and Swastika Investmart. READ MORE