ICICI Securities advised buying shares of Premier Energies, citing potential growth prospects
India is taking steps to boost its domestic solar manufacturing sector with the announcement of new guidelines that aim to strengthen local supply chains and push for backward integration. The proposed draft, if implemented, will require new solar projects connected to the grid to procure domestically manufactured news and ingots from June 2028.
The draft, which follows earlier proposals for domestic procurement of cells from June 2026 and domestic procurement from April 2024, is part of India's ongoing efforts to support domestic solar manufacturing. The first approved list of solar cell manufacturers has already been published, with Premier Energies holding a 2GW capacity on the list for wafer and ingot production. Approximately 13GW has made it to the approved list, with Premier and Adani Enterprises accounting for 2GW and 4GW respectively.
ICICI Securities, a leading financial services company, believes that a number of players are likely to have wafer capacity up and running by June 2028. The company expects solar manufacturers capable of integrating the entire value chain to benefit from the proposed measures. ICICI Securities maintains a positive stance on Premier Energies, trading at 27x FY27E earnings, as integrated players are expected to gain from the evolving regulatory framework favoring companies with domestic capabilities across the supply chain.
The new guidelines also aim to bring wafer production within Indian shores. This is a further step in India's efforts to ensure compliance with domestic news. After the publication of the list, all RE project bids will procure modules which use domestic wafers. The list of approved solar cell manufacturers will be issued after 15GW of capacity and at least three manufacturers have been identified to ensure competition.
The new policy also intends to go one step ahead and ensure compliance with domestic news. Module manufacturers not procuring wafers from the approved list will be delisted. The search results do not provide a specific list of manufacturers of solar cells meeting the criteria of having at least three manufacturers to ensure competition, nor do they specify whether these manufacturers will meet the new requirements by June 2028. However, the guidelines are designed to go one step ahead and ensure compliance with domestic news.
The new guidelines are part of India's broader strategy to strengthen its domestic solar manufacturing sector. India currently has over 100GW of domestic module capacity and around 25GW of domestic cell capacity. The country has implemented multiple initiatives to support domestic solar manufacturing, with the aim of creating a self-reliant solar manufacturing ecosystem. The new policy is expected to contribute significantly to this goal.
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