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Acme ACME Solar Holdings Limited is an Indian electricity producer from renewable energy sources. The company specializes in the development, construction, ownership, operation and maintenance of large-scale renewable energy projects. ACME Solar Holdings IPO aims to raise Rs 2,900 crores. The issue is a combination of fresh issue aggregating to Rs 2,395 crores and offer for sale aggregating to Rs 505 crores.

About ACME Solar Holdings:

• The Company was established in 2015 to consolidate the ACME Group’s renewable energy business and to capitalize on the opportunities in the Indian renewable energy industry.
• The ACME Group is promoted by Manoj Kumar Upadhyay and ACME Cleantech was incorporated in 2003.
• CME Solar Holdings Limited has commissioned 3,668 MWp across 12 states in India.
• Their operational and under construction portfolio spans multiple technologies such as solar, wind, solar-wind hybrid, FDRE (including solar, wind & battery storage), and Pumped storage power projects (PSP).
• The current operational capacity of ACME is 1,340 MW, and total capacity (including contracted and awarded projects) is 6,320 MW.
• company generates revenue by selling electricity to various off-takers, including central and state government-backed entities.
• The company’s projects are located across 10 Indian states of Rajasthan, Gujarat, Punjab, Madhya Pradesh, Uttar Pradesh, Bihar, Chhattisgarh, Andhra Pradesh, Odisha and Telangana.

Financials :ACME Solar Holdings IPO

Anchor: ACME Solar Holdings IPO

Acme Solar Holdings raised ₹1,300.5 crore from anchor investors as part of the IPO. Institutional investors includedAbu Dhabi Investment Authority, Goldman Sachs, Morgan Stanley, Nomura, Societe Generale, HSBC Global, BNP Paribas Funds, CLSA Global, Prudential Hong Kong, Eastspring Investments, Oaks Emerging Umbrella Funds Plc, Lion Global, Great Eastern Life, Copthall Mauritius, Susquehanna Pacific, Citigroup and Integrated Core Strategies etc. Mutual funds, Nippon Life India, HDFC Mutual Fund, ICICI Prudential MF, Mirae Asset, Tata Mutual Fund, SBI Life Insurance, ICICI Prudential Life, Bandhan MF, Manulife, Invesco India, Baroda BNP Paribas, SBI General Insurance, Abakkus Diversified Alpha Fund, Kotak etc.

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Salient Points:ACME Solar Holdings IPO

• Renewable energy installations in India have increased to ~ 200 GW, wnow comprising about 44 percent of the country’s installed capacity. 
• The proceeds from the offer for sale will go to the promoter selling shareholder, ACME Cleantech Solutions.
•  51 Shares
•  The company’s revenue has been stagnant over the last three years, with losses after adjusting for exceptional gains during the same period. 
• The company’s under construction Awarded Project capacity of 1,730 MW consisting of 600 MW (870 MWp) of solar power projects, 450 MW hybrid power projects and 680 MW of FDRE power projects.
• The company has an integrated in-house approach to executing its renewable projects across the entire life cycle of developing a project, from PPA signing to the project achieving commercial operations within 18 – 24 months and subsequently operating and maintaining the project.
• Its profits may improve once the expanded capacity gets commercialised over the next 2-3 years. 
• Peers: At the upper price band, the PE works out to 152.1 times (TTM). The P/BV works out to 4 times. Company has shown Adani Green Energy, and ReNew Energy Global (not listed), as their listed peer. Adani Green is trading at a P/E of 200.
• Most of the company’s portfolio is contracted through long-term power purchase agreements with central and state government backed entities for a period of 25 years. As of June 30, 2024, the weighted average residual period for all the Operational Projects was 19.94 years.
• Acme’s management has indicated 13% PAT margin for the power business going forward, This number both for Adani Green and NTPC Green’s is more than 20%.
• It has high debt levels. Ongoing capex of ~Rs. 38,500 cr for future capacity will further increase leverage. With IPO funds it is only repaying Rs. 1,795 cr of Rs. 11,170 cr gross debt
• I am likely to skip ACME Solar Holdings IPO. It looks OK for a long term term perspective. My preference would be for upcoming NTPC green IPO which is more trust worthy and predictable in almost the same space.
• GMP as reported on social media is quite low or NIL.
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.