ACME Solar Holdings IPO Opens Tomorrow with ₹2,900 Crore Offer

ACME Solar Holdings, a renewable energy company in India, is set to launch its IPO tomorrow on November 6, 2024. It is one of the anticipated upcoming IPOs in India. Here are the key details to note about the ACME Solar IPO. 

Key Details of the IPO to Note

• Open and Close Dates: ACME Solar Holdings IPO will open for subscription on Wednesday, November 6, 2024, and will close on Friday, November 8, 2024.
• Allotment Date: The allotment for the IPO is anticipated to be on or before Monday, November 11, 2024.
• Listing Date: The shares will be listed on the BSE and NSE, with a tentative listing date set for Wednesday, November 13, 2024.
• Price Band: The price band for the ACME Solar Holdings IPO is set between ₹275 to ₹289 per share, with a minimum application lot size of 51 shares. Retail investors need to make a minimum investment of ₹14,739.
• Offer Size: The IPO will be a book-built issue amounting to ₹2,900 crore, which includes a fresh issue of 8.29 crore shares of ₹2,395 crore and an offer for sale of 1.75 crore shares of ₹505 crore.
• Objects of the Issue: As per the RHP, the proceeds from the fresh issue will be used for the investment in their subsidiaries for repayment/prepayment, in full or in part, of certain outstanding borrowings availed by their subsidiaries, and for general corporate purposes. 

Financial Performance

Strengths and Risks

Strengths:

• The company is one of the key players in the renewable energy sector. They rank as one of the top 10 renewable energy companies based on operational capacity, as of March 2024. 
• The company’s portfolio includes a diverse array of projects across various renewable energy technologies, strategically located in 11 Indian states: Rajasthan, Gujarat, Punjab, Madhya Pradesh, Uttar Pradesh, Bihar, Chhattisgarh, Andhra Pradesh, Odisha, Karnataka, and Telangana.
• Most of the projects are secured via long-term power purchase agreements (PPA) with central and state government companies. These agreements typically last for about 25 years. 

Risks:

• The company may face challenges in expanding their renewable energy project portfolio due to the highly competitive nature of renewable energy projects auctions. 
• The company’s business is highly dependent on the top ten off-takers, which accounted for 95.42%, 89.42%, 89.97%, 87.48%, and 81.11% of their revenue from operations during the three months ending June 30 for 2024 and 2023, as well as for the fiscal years 2024, 2023, and 2022. Losing these off-takers can adversely affect the business of the company. 
• The company’s promoters, ACME Cleantech, has been one of the primary suppliers of components, like solar PV modules, for the past three fiscal years. Any adverse developments in this relationship could adversely affect their business.

About ACME Solar Holdings Ltd

ACME Solar Holdings Ltd is one of India’s largest renewable energy independent power producers (IPP), with a portfolio encompassing solar, wind, hybrid, and firm and dispatchable renewable energy (FDRE) projects. Ranked among India’s top 10 renewable energy companies by operational capacity (as of June 30, 2024), ACME Solar develops, constructs, owns, operates, and maintains large-scale renewable projects. The company generates its revenue through electricity sales to a range of off-takers, including central and state-backed entities. The company also manages engineering, procurement, and construction (EPC) and operation and maintenance (O&M) functions through its in-house teams.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.