Premier Energies mops up ₹200-cr PE investments

Suresh P Iyengar Mumbai | Updated on September 23, 2021

Will increase its solar cell and module capacity to 2 GW each from 0.75 GW

Premier Energies, one of the leading solar PV cells and module manufacturers, will raise ₹200 crore through private equity investment and is in discussion with GEF Capital Partners, a global private equity manager focused on investing in climate solutions.

The company will increase its solar cell and module capacity to 2 GW each from 0.75 GW based on the latest Monocrystalline PERC technology with an investment of ₹1,200 crore over the next 2 years.

It plans to raise another ₹200 crore private equity in the next few months and mop-up ₹800 crore debt from various banks for fresh investment plans.

The expansion will happen at it new modern facility at E-City Hyderabad where it produces a solar module per 18 second. Premier Energies is the OEM suppliers for leading brands such as Panasonic and Luminous.

Chiranjeev Saluja, founder and Managing Director, told BusinessLine that demand has been very strong especially with the government support and recent default by China on all its commitments due to sharp rise in their cost.

The investment of a PE fund in manufacturing sector, which probably is the first in recent past, holds testimony to the confidence of investors in this sector, said Saluja. Centrum Capital Limited was the exclusive advisor to Premier Energies on this transaction.

The company expects its revenue to jump 50 per cent to ₹1,500 crore this fiscal and hit ₹2,500 crore-mark by 2023. It also plans to hit the capital market in next two years.

The Government plans to impose 25 per cent import duty on solar cell and 40 per cent on solar modules to make Indian manufacturers more competitive, he added.

On the impact of Reliance and Adani entry in the solar manufacturing, Saluja said they would probably use 75 per cent of their production for captive purpose but there are many independent producers and other corporates who would look for Premier Energies service.

The cost difference between India and China solar panel is about 7-10 per cent which has been more than neutralised by 10 times increase in freight rates, he said.

Investment in solar cell manufacturing is boosted by Government’s domestic content requirement policy and Production Linked Incentive scheme.

Sridhar Narayan, a founder of GEF Capital and Managing Partner of the South Asia investment programme, said the investment will help the second largest integrated player Premier Energies, which is in existence for 25 years, to build a modern solar manufacturing business.

Published on September 23, 2021

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