ACME Solar Holdings Limited will launch its Initial Public Offering (IPO), consisting of a fresh issue and an offer for sale (OFS). The fresh issue is expected to raise Rs. 2,395 crore, and the OFS aims to raise Rs. 505 crore, totaling Rs. 2,900 crore.
The IPO aims to use funds for debt repayment and the company’s growth opportunities. It will open for bidding on November 6, 2024, and close on November 8, 2024. ACME Solar Holdings Limited shares are likely to be listed on November 13, 2024, in NSE and BSE shortly.
GMP of ACME Solar Holdings Limited:
The share price of ACME Solar Holdings Limited in the grey market was trading at a 9.34% premium as of November 21st, 2024. The shares in Grey Market traded at Rs. 316. This gives it a premium of Rs. 27 per share over the cap price of Rs. 289.
About ACME Solar Holdings Limited:
ACME Solar Holdings Limited was incorporated in June 2015 and is headquartered in Gurugram, Haryana. The company is an Indian electricity producer from renewable energy sources. ACME Solar Holdings Limited is among India’s biggest producers of solar and wind-powered electricity.
The company strategically develops, constructs, and operates large-scale renewable projects through its integrated engineering, procurement, construction, and maintenance divisions. Currently, ACME Solar maintains an impressive operational capacity of 1,340 MW across various solar installations throughout the nation.
The company’s remarkable growth continues with 1,650 MW of contracted projects spanning both solar of 1,500 MW and wind power of 150 MW, alongside 2,380 MW of awarded projects under development. ACME Solar demonstrates its commitment to India’s sustainable future by maintaining high plant availability and consistently expanding its renewable energy portfolio.
Promoters of ACME Solar Holdings Limited
The promoters of ACME Solar Holdings include Mamta Upadhyay, Manoj Kumar Upadhyay, ACME Cleantech Solutions Private Limited, MKU Holdings Private Limited, and the Upadhyay Family Trust. They hold significant influence over the company’s strategic direction and decision-making.
The selling shareholder for the IPO is ACME Cleantech Solutions Private Limited. It offers equity shares worth up to Rs. 505 crore as part of the offer-for-sale. It allows the company to expand its financial base without diluting control.
Book running Lead Managers of ACME Solar Holdings:
The ACME Solar Holdings IPO’s lead managers are Nuvama Wealth Management Limited, ICICI Securities Limited, JM Financial Limited, Kotak Mahindra Capital, and Motilal Oswal Investment Advisors. The registrar of the offer is KFin Technologies Limited, ensuring the IPO process remains smooth and compliant with regulatory standards.
IPO Objectives of ACME Solar Holdings
The primary objectives of the ACME Solar Holdings IPO are:
- Rs. 1,795 crore are investments in the subsidiaries for repayment or prepayment of certain outstanding borrowings
- The remaining funds will be used for general corporate purposes.
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Financial Highlights of ACME Solar Holdings:
ACME Solar Holdings’s revenue has increased from Rs 1,294.90 crore in FY23 to Rs. 1,319.25 crore in FY24, which has grown by 1.88%. The company has converted its net loss of Rs. 3.17 crore in FY23 to a net profit of Rs. 697.78 crore in FY24.
The company’s EBITDA has decreased from Rs 1,172.59 crore in FY23 to Rs. 1,089.15 crore in FY24, which is down by 7.12%.
The company’s EBITDA margin has decreased from 90.55% in FY23 to 82.56% in FY24. The PAT margin improved from negative to positive, which was -0.23% in FY23 to 47.59% in FY24.
The company ROE has increased from 25.34% in FY23 to 38.83% in FY24. The debt-to-equity ratio of the company has decreased from 3.85x in FY23 to 2.66x in FY24.
ACME Solar Holdings vs Peers
ACME Solar Holdings competes with established peers like Adani Green Energy Limited and ReNew Energy Global PLC. ACME Solar Holdings Limited’s revenue is higher than Adani Green Energy Limited and ReNew Energy Global PLC. As compared to the earnings per share and ROE, ACME Solar Holdings Limited has the highest compared to peers.
Strengths of ACME Solar Holdings:
- Market Leadership: A strong position within India’s solar energy market supports stable growth.
- Sustainable Growth Focus: The company’s commitment to eco-friendly, renewable energy aligns with governmental support and policies.
- Experienced Management: Leadership expertise ensures efficient project execution and long-term strategy alignment.
- Technological Edge: Advanced photovoltaic technology offers efficient, high-output energy solutions.
- Robust Portfolio: ACME’s diverse solar projects reduce risk concentration and enhance revenue streams.
Weaknesses of ACME Solar Holdings:
- Market Dependence: Heavy reliance on India’s renewable energy policies and incentives could impact profitability.
- High capital requirement: solar projects require substantial capital, leading to financing and liquidity risks.
- Regulatory risks: changes in regulatory or environmental laws could slow project timelines.
- Competitive pressure: intense competition from established and emerging players in the renewable sector.
- Project Execution Risks: Dependence on timely completion and grid connectivity for project viability.
Written by- Nikhil Naik
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