Wednesday, July 3, 2024

Gurugram-based renewable energy company ACME Solar Holdings Limited files DRHP for Rs 3,000 crore IPO

ACME Solar Holdings Limited is one of the largest renewable energy independent power producers (“IPP”) in India and among the top 10 renewable energy players in India in terms of operational capacity (Source : CRISIL Report)

Gurugram-based Acme Solar Holdings Limited, with a portfolio of solar, wind, hybrid and firm and dispatchable renewable energy (“FDRE”) projects, has filed its draft red herring prospectus (DRHP) with the market regulator, Securities and Exchange Board of India (SEBI), to raise Rs 3,000 crore through an initial public offering (IPO).


The IPO, with a face value of Rs 2 per equity share, is a mix of fresh issue of shares up to Rs 2,000 crore and an offer for sale (OFS) of up to Rs 1,000 crore by ACME Cleantech Solutions Private Limited. 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.

The company, in consultation with the book-running lead manager, may consider an issue of specified securities up to Rs 400 crore as a "pre-IPO placement". If such placement is completed, the fresh issue size will be reduced.  

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.

The company intend to utilize the Net Proceeds from the fresh issuance to the extent of Rs. 1,500 crores towards repayment/prepayment, in full or in part, of certain outstanding borrowings availed by the Subsidiaries and for general corporate purposes.

ACME Solar Holdings Limited is one of India's largest renewable energy independent power producers (IPPs) 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, ACME Solar has diversified and expanded its portfolio from solar power projects to becoming an integrated renewable energy company in India.

The company 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, 18 out of our 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 Rs 1,319.25 crore from Rs 1,294.90 crore in the previous year. The Company had turnaround from being loss making in FY23 to a profit of Rs 698.23 crore in FY24.

Established in 2015, ACME Solar was formed to consolidate the ACME Group’s renewable energy business and capitalize on opportunities in the Indian renewable energy industry. The promoter company, ACME Cleantech, was incorporated in 2003 and is led by Manoj Kumar Upadhyay. Initially providing energy management solutions to wireless telecommunications operators in India, ACME Cleantech entered the renewable energy generation business in 2009.

ACME Group was one of the early entrants in the solar IPP business in India, commissioning its first solar power plant in Fiscal 2012. Since then, the group has developed, executed, and commissioned a total of 2,719 MW (3,668 MWp) of solar power projects.

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.

Strategically, ACME Solar has also divested certain solar power projects to investors, delivering value to shareholders with a cumulative capacity of 1,379 MW (1,842 MWp) and used the proceeds to grow its business.

ACME Cleantech signed a memorandum of understanding with the Government of Uttar Pradesh for the development of a 600 MW closed-loop pump storage project in the state by ACME Urja Two Private Limited, the relevant project SPV. In June 2024, the company acquired the entire equity share capital of ACME Urja Two Private Limited.

Based in Gurugram, ACME Solar has an integrated in-house business platform to execute and operate its projects throughout their lifecycle—from bid submission to achieving commercial operations and ongoing operations and maintenance. Key activities performed by the team include tendering and bidding, land acquisition and approvals, financial closure, design engineering, procurement, construction, and O&M.

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

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