ACME Solar files for a ₹3,000-cr IPO to power its aggressive expansion

New Delhi: ACME Solar Holdings has filed for an initial public offering to raise ₹3,000 crore as it maps out an aggressive expansion in the green energy space, including new power projects.

In its draft red herring prospectus (DHRP) filed with the Securities and Exchange Board of India, the renewable energy company said it has an aggregate operational solar power capacity of 1,320 MW. Another 1,500 MW of solar capacity and 150 MW of wind power capcacity are under construction.

ACME Solar’s public share issue comes at a time when India’s renewable energy space in growing and attracting investments, also encouraged by the government’s ambitious target of net-zero carbon emissions by 2070.

The company, which has expanded its footprint in the larger spectrum of energy transition over the years, ranked among India’s top 10 renewable energy producers in terms of operational capacity as of 31 March, according to a Crisil eport. 

Over the past year, ACME Solar has been aggressively looking to raise funds for its various projects, as Mint has reported earlier.

It swung to a consolidated net profit of ₹689.22 crore in fiscal year 2023-24 from a loss of ₹3.17 crore in the year before, per its DRHP. Revenue improved to ₹1,466.26 crore from ₹1,361.37 crore.

The IPO details

ACME Solar in its IPO prospectus said its public offering with a face value of ₹2 per equity share would include a fresh issue of shares worth up to ₹2,000 crore. The remaining ₹1,000 crore worth of shares would be sold by its promoter group, ACME Cleantech Solutions Pvt. Ltd.

The offer for sale of ACME Cleantech’s shares would include a reservation for a subscription by eligible employees and a discount offered to eligible employees bidding in the employee reservation portion.

ACME Solar may also consider issuing specified securities up to ₹400 crore as a “pre-IPO placement”. If such placement is completed, the fresh issue size will be reduced, the company said in its prospectus. 

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The book-running lead managers for the issue are Nuvama Wealth Management Ltd, ICICI Securities Ltd, JM Financial Ltd, Kotak Mahindra Capital Co. Ltd, and Motilal Oswal Investment Advisors Ltd.

The offer is being made through the book-building process, wherein up to 75% of the net offer will be available for allocation to qualified institutional buyers, 15% will be offered to non-institutional investors, and the remaining 10% will be available for retail individual investors.

Debt repayments

ACME Solar intends to use the proceeds from the fresh issuance of shares to the extent of ₹1,500 crore for repaying or prepaying certain outstanding borrowings availed by its subsidiaries, and the rest for general corporate purposes.

Its outstanding debt as of 31 May stood at ₹10,314.01 crore, including term loans of ₹6,766.66 crore, non-convertible debenture of ₹2,393.81 crore, and bank guarantees worth ₹1,153.54 crore.

The company also said it had refinanced the debt of some of its project special purpose vehicles through green bonds. It did this by issuing non-convertible debentures in FY22 for a total ₹2,485.52 crore, including a top-up debt of ₹502.93 crore, to India Cleantech Energy, whose green bonds are listed on the Singapore Stock Exchange.

ACME’s aggressive expansion

ACME Solar has been looking to raise funds as it expands its footprint in the energy space. In January, Mint reported that Acme Group was looking to raise $300 million in fresh equity to secure funds to bid for new power projects. 

Earlier in November, Mint reported that the group had mandated EY to sell up to 51% in its proposed infrastructure investment trust for around $1.3 billion. In February last year, the group issued a mandate to Rothschild and Co. to raise $500 million equity by selling a stake in ACME Cleantech.

ACME Solar is among seven companies that have placed bids for manufacturing advanced chemistry cells with a capacity of 10 gigawatt hours under the government’s production-linked incentive scheme.

It has also partnered with Japan’s IHI Corp. to set up a green ammonia plant at Gopalpur Industrial Park in Odisha at an investment of ₹60,000 crore.

Also read | Japan to help India cut power sector emissions