ACME Solar Holdings IPO

ACME Solar Holdings IPO Details

ACME Solar Holdings IPO Date

According to the offer document filed by the company with SEBI, the ACME Solar Holdings IPO’s opening date – in other words, the ACME Solar Holdings IPO launch date – will be 6th November 2024. The ACME Solar Holdings IPO closing date is 8th November 2024. After this, investors will be updated about the allotment status on 11th November 2024.

Investors who have been allotted shares can expect them to be credited to their demat account on 12 November 2024. The ACME Solar Holdings IPO listing date is 13 November 2024. The listing date is the date on which a company's shares are listed on the bourses—NSE and BSE. 

ACME Solar Holdings IPO Price Band

The IPO is a fresh issue as well as an offer for sale. The ACME Solar Holdings IPO price band has been set between ₹275 and ₹289 per share. Interested investors can choose a price within this band to apply for the IPO. 

The ACME Solar Holdings IPO listing price will be determined on 13th November 2024. The listing price is the price at which a company’s shares debut on the stock exchanges.

ACME Solar Holdings IPO Lot Size

The ACME Solar Holdings IPO details have been declared. The ACME Solar Holdings IPO lot size is set at 51 shares, and an investor can apply for a minimum of 1 lot. Meanwhile, the ACME Solar Holdings IPO issue size is approx ₹2900 crore. 

 ACME Solar Holdings IPO Objective

ACME Solar Holdings aims to utilise the net proceeds from its fresh issue to repay borrowings and for general corporate purposes. 

About ACME Solar Holdings

Incorporated in 2015, ACME Solar Holdings Limited is one of the largest renewable energy independent power producers (IPP) in India as of 30 June 2024. Its portfolio includes solar, wind, hybrid and firm and dispatchable renewable energy (FDRE) projects. 

It conducts its operations through its in-house engineering, procurement, and construction (EPC) division and operation and maintenance (O&M) team. It sells electricity to off-takers, which include central and state government-backed entities.

The ACME Group has a track record of developing, executing and commissioning a total of 2,719 MW of solar power projects since inception. As of 30 June 2024, it has an aggregate operational project capacity of 1,340 MW solar power projects. It also has 1,500 MW of solar power projects and 150 MW of wind power projects in its contracted project capacity, 600 MW of solar power projects, 450 MW hybrid power projects and 680 MW of FDRE power projects in its awarded project capacity. 

The company has divested some of its solar power projects, which have a cumulative capacity of 1,379 MW, to investors and used the sale proceeds to grow its business. It has an integrated in-house business platform to execute projects across their life cycles, from bid submission to operations and maintenance. 

It is present in the states of Gujarat, Rajasthan, Madhya Pradesh, Andhra Pradesh, Karnataka, and Tamil Nadu. Moreover, it signed an MOU with the Government of Uttar Pradesh to develop a 600 MW closed-loop pump storage project in the state by ACME Urja Two Private Limited, which it acquired in June 2024.

The company’s revenue has remained volatile. It reported revenue of ₹1,487 crore in FY22, which declined by over 12% to ₹1,294 crore in FY23. In FY24, revenue dropped further to ₹1,319 crore. However, India’s renewable energy capacity is expected to reach 320 GW by FY29 due to various government initiatives, favourable policies, competitive tariffs, innovative tenders, and the development of solar parks and green energy corridors. This could indirectly benefit the company. 

Now, ACME Solar Holdings Limited is launching its initial public offer (IPO). The total IPO issue size is ₹2,900 crore, comprising fresh issue, aggregating to ₹2395 crore, and an offer for sale, aggregating to ₹505 crore. The money raised from the issue will be utilised to repay borrowings and general corporate purposes. Its shares will be listed on the NSE and BSE.

Company Name:  ACME Solar Holdings Limited

Company Established On: 1 May 2017

Company Type: Public Limited Company

CEO/MD:  Nikhil Dhingra

Financial snapshot

ACME Solar Holdings IPO Analysis

Strengths and Opportunities

1. Well positioned to capitalise on strong industry tailwinds in its IPP business as one of the largest renewable energy independent power producers (IPP) in India as of FY24.
2. End-to-end value chain capabilities and an integrated approach to developing within an average timeline of 18 to 24 months. 
3. The company has an expansive portfolio diversified across different renewable energy technologies and a presence across 11 Indian states.
4. Long-term stable cash flows based on contracts with central and state government entities with a weighted average residual period of 19 years for its operational projects as of FY24.
5. Access to diversified funding sources by investing equity of ~25% of the total project cost, obtaining debt financing, refinancing some of its debt, and strategically divesting some of its projects.
6. Design and value engineering such as technologically advanced and a higher number of modules at optimal DC:AC ratios to achieve optimum CUF (Capacity Utilisation Factor) per unit of capital investment. 

Risks and threats

1. It might not be able to grow its portfolio as it relies on highly competitive renewable energy power project auctions.
2.  Business depends on its top 5 off-takers, who accounted for 74% of the revenue from operations in FY24.
3. Has limited experience in commissioning wind, hybrid FDRE power projects and closed loop pump storage projects, which could lead to delays and unexpected costs, thereby affecting project viability and profitability.
4. It relies on transmission and distribution facilities owned and operated by the respective state governments or public entities. If its projects outpace transmission capacities, it might face difficulties with operations and cash flows.
5. In-house EPC operations expose it to risks such as price fluctuation in the cost of equipment and components to develop its renewable energy projects. 
6. Had total borrowings of ₹9,319 crore as of 30 June 2024.
7. Restrictions on renewable energy equipment imports may increase procurement costs, as imports from China account for 66% of total purchase expenses.
8. Business is subject to environmental conditions, seasonal fluctuations and natural calamities.
9. Faces competition from ReNew Power, Adani Green Energy, NTPC Green Energy, TATA Power Renewable Energy, Greenko and Avaada Energy.
10. Incurred a loss of ₹3.17 crore in FY23. 

How to apply for the ACME Solar Holdings IPO?

If you are interested to invest in ACME Solar Holdings IPO, following are the steps to apply:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘ACME Solar Holdings IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

You can also pre-apply for the ACME Solar Holdings India IPO on Upstox which usually begins a day before the IPO opens for subscription.