ACME Solar Holdings Ltd, a prominent player in India’s renewable energy landscape, opened its IPO on November 6, 2024, and will close on November 8. The company aims to raise approximately ₹2,900 crore through this public offering, with shares priced in the range of ₹275 to ₹289. Ahead of the IPO, ACME Solar secured ₹1,300.50 crore from anchor investors, highlighting solid initial interest.
The IPO structure allocates 75% of the shares to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Investors (NIIs), and 10% to retail investors, with an additional ₹10 crore reserved for employees. The offering consists of a fresh issue worth ₹2,395 crore and an Offer for Sale (OFS) worth ₹505 crore by ACME Cleantech Solutions Pvt Ltd, the company’s promoter. The proceeds will primarily be used to reduce the company’s debt, particularly for its subsidiaries, and for general corporate purposes.
Operating one of India’s largest portfolios of solar energy assets, ACME Solar has projects spread across multiple states, with major installations in Andhra Pradesh, Rajasthan, and Telangana. Together, these three states house 85% of the company’s operational capacity. ACME Solar’s end-to-end capabilities, from engineering to procurement and maintenance, allow it to sustain its growth in the sector. The company generates revenue by selling power to clients, many of whom are government-supported entities.
In terms of financial performance, ACME Solar has shown gradual improvement. In FY24, revenue increased by 1.88% to ₹1,319.25 crore, and the company reported a net profit of ₹698.23 crore—a notable turnaround following previous losses. While profitability is up, analysts caution that revenue growth has been relatively flat over recent years, and the latest figures include exceptional gains, which can skew the overall financial picture.
Despite these factors, SBI Securities has rated the IPO favorably, recommending it for long-term investors. The company’s valuation at 20.2x FY24 EV/EBITDA is seen as reasonable compared to peers like Adani Green Energy (P/E of 291.7x) and ReNew Energy Global (P/E of 48.8x). Analysts believe that ACME Solar’s long-term prospects are strong, as the company continues to expand its project pipeline and capacity. SBI Securities views this IPO as an attractive opportunity for investors, given the growing interest in renewable energy and the company’s established track record with government-backed contracts and stable project expansion.
As a prominent player in India’s green energy sector, ACME Solar’s IPO aligns well with the current demand for sustainable investments. For investors with a long-term view, the IPO presents a compelling entry point into the renewable energy market.
Disclaimer: This information is for informational purposes only and does not constitute financial advice. Investing in IPOs involves risks, including potential loss of principal. Please consult a financial advisor and review all offer documents before making any investment decisions. Past performance is not indicative of future results.
Leave a Reply