ACME Solar Holdings IPO: The initial public offering for the renewable energy company ACME Solar Holdings Ltd opened on Wednesday, November 6, and will end on Friday, November 8. ACME Solar Holdings secured ₹1,300.50 crore from its anchor investors on Tuesday, November 5. Foreign and domestic entities that received shares in the anchor round comprise Abu Dhabi Investment Authority, HSBC Global Investment Fund, and Abakkus Fund, as stated in a circular published on the BSE's website late Tuesday night.
ACME Solar Holdings IPO price range has been established between ₹275 and ₹289 per share for the Gurugram-based firm.
Acme Solar Holdings IPO has reserved not less than 75% of the shares in the public issue for qualified institutional buyers (QIB), not more than 15% for non-institutional Institutional Investors (NII), and not more than 10% of the offer is reserved for retail investors. The employee portion has been reserved equity shares aggregating up to ₹10 crore.
ACME Solar Holdings is engaged in the development, construction, ownership, operation, and maintenance of large-scale renewable energy projects through its internal engineering, procurement, and construction (EPC) division, along with its operation and maintenance (O&M) team. The company generates income by providing electricity to various purchasers, including entities backed by central and state governments.
As of June 2024, 18 out of its 28 active projects are situated in Andhra Pradesh, Rajasthan, and Telangana, accounting for 85 percent of its total operational capacity.
The company's listed peers are Adani Green Energy Ltd (with a P/E of 291.7x) and ReNew Energy Global PLC (with a P/E of 48.8x).
ACME Solar's total revenue generated from operations rose by 1.88 percent to ₹1,319.25 crore in the fiscal year 2024, compared to ₹1,294.90 crore the year before. The company shifted from operating at a loss in FY23 to achieving a profit of ₹698.23 crore in FY24.
The initial public offer of ACME Solar Holdings IPO has been subscribed 70% on the last day of subscription today, as per BSE data.
The initial share sale received bid for 4,05,87,075 shares against 38,70,64,594 shares on offer, according to BSE.
The portion for retail investors received 2.04 times subscription while the quota for non-institutional investors got subscribed 56%. The qualified institutional buyers (QIBs) part is booked 31%. The employee portion has been subscribed 98%.
After day 1 of bidding, the public issue had been booked 0.39 times, the retail portion of the book build issue had been subscribed 1.19 times, and the NII portion had been subscribed 0.32 times. The QIB segment of the public issue has been booked 0.15 times.
The brokerage's report indicated that although ACME Solar Holdings has experienced fluctuating profitability due to project sales and significant capital requirements, its robust pipeline of contracted projects, particularly in FDRE solutions, underscores its potential for long-term growth in a supportive policy context. Nevertheless, investors should remain cautious about the issues stemming from its inconsistent profitability.
Considering ACME Solar Holdings' extensive project pipeline, strategic emphasis on hybrid and FDRE initiatives, and expected benefits from increasing renewable tariffs, the company is well-positioned for growth in a market characterized by strong demand fundamentals.
“We recommend to SUBSCRIBE this issue for long-term gains,” the brokerage said.
The brokerage indicates that the firm is involved in the renewable energy industry with a varied portfolio that includes multiple sources of power generation. Following a decline in profitability in FY23, the company has recently shown remarkable growth along with robust margins. The debt-to-equity ratio is still quite elevated. The assessment of the IPO valuation seems fair. It is appropriate for long-term investors who are ready for possible fluctuations upon listing.
Acme Solar Holdings IPO , which is worth ₹2,900 crore, comprises a fresh issue of ₹2,395 crore, and an offer-for-sale (OFS) of equity shares worth of ₹505 crore by the promoter, ACME Cleantech Solutions Private Ltd.
The company intends to use the net proceeds to facilitate the repayment or prepayment, either partially or fully, of specific outstanding loans obtained by the subsidiaries; as well as for general corporate needs.
Nuvama Wealth Management Ltd, ICICI Securities Ltd, JM Financial Ltd, Kotak Mahindra Capital Company Ltd, and Motilal Oswal Investment Advisors Ltd serve as the book-running lead managers for the ACME Solar Holdings IPO, with Kfin Technologies Ltd acting as the registrar for the offering.
Acme Solar Holdings IPO GMP today or grey market premium is +10. This indicates Acme Solar Holdings share price was trading at a premium of ₹10 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Acme Solar Holdings share price is indicated at ₹299 apiece, which is 3.46% higher than the IPO price of ₹289.
According to the grey market activities observed over the past 13 sessions, the present GMP ( ₹10) is indicating a downward trend. The minimum GMP recorded is ₹0, while the maximum GMP has reached ₹30, as reported by an expert from investorgain.com.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
