ACME Solar files draft papers for INR 3,000 crore IPO

Gurugram-based Acme Solar Holdings Ltd has filed its draft red herring prospectus (DRHP) with the market regulator, Securities and Exchange Board of India (SEBI), to raise INR 3,000 crore ($359.13 million) through an initial public offering (IPO).

“The IPO, with a face value of INR 2 per equity share, is a mix of fresh issue of shares up to INR 2,000 crore and an offer for sale (OFS) of up to INR 1,000 crore by ACME Cleantech Solutions. The offer also includes a reservation for a subscription by eligible employees and a discount is being offered to eligible employees bidding in the employee reservation portion,” stated ACME Solar.

ACME Solar added that “in consultation with the book-running lead manager, [it] may consider an issue of specified securities up to INR 400 crore as a pre-IPO placement. If such placement is completed, the fresh issue size will be reduced.”

The company intends to utilize the net proceeds from the fresh issuance to the extent of INR 1,500 crore towards repayment/prepayment, in full or in part, of certain outstanding borrowings availed by its subsidiaries and for general corporate purposes.

The offer is being made through the book-building process, wherein not less than 75% of the net offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not more than 15% of the net offer shall be available for allocation to non-institutional investors, and not more than 10% of the net offer shall be available for allocation to retail individual investors.

ACME Solar Holdings is one of India’s largest private-sector renewable energy producers and ranks among the top 10 renewable energy players in the country in terms of operational capacity as of March 31, 2024, according to a CRISIL Report. Over the years, it has diversified and expanded its portfolio from solar power projects to becoming an integrated renewable energy company in India.

ACME Solar develops, builds, owns, operates, and maintains utility-scale renewable energy projects through its in-house engineering, procurement, and construction (EPC) division, as well as its operation and maintenance (O&M) team. ACME Solar generates revenue by selling electricity to various off-takers, including central and state government-backed entities.

As of March 31, 2024, ACME Solar had an aggregate operational project capacity of 1,320 MW (1,802 MWp) of solar power projects. It also had under-construction contracted project capacity of 1,650 MW, including 1,500 MW (2,192 MWp) of solar power projects and 150 MW of wind power projects. Additionally, it had an under construction awarded project capacity of 2,380 MW, comprising 300 MW of solar power projects, 830 MW of hybrid power projects, and 1,250 MW of FDRE power projects.

In May 2024, ACME Solar signed power purchase agreements for two of its under-construction awarded FDRE projects with a combined capacity of 570 MW, bringing its under construction contracted project capacity to 2,220 MW.

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As of March 31, 2024, the company’s 18 out of 28 operational projects are located in the states of Andhra Pradesh Rajasthan, and Telangana representing 85.07% of its total operational Projects capacity.

Acme Solar’s restated consolidated revenue from operations during the fiscal year 2024 increased 1.88% to INR 1,319.25 crore from INR 1,294.90 crore in the previous year. The company had turnaround from being loss making in FY23 to a profit of INR 698.23 crore in FY24.

Nuvama Wealth Management, ICICI Securities, JM Financial, Kotak Mahindra Capital Co., and Motilal Oswal Investment Advisors are the book-running lead managers, and KFin Technologies is the registrar of the issue.