Gurugram-based ACME Solar files DRHP for ₹3,000 crore IPO

In a fresh development in the primary market, renewable energy firm ACME Solar Holdings Limited has filed its draft red herring prospectus (DRHP) with the market regulator, Securities and Exchange Board of India (SEBI), to raise ₹3,000 crore through an initial public offering (IPO).

The IPO, having a face value of ₹2 per equity share, is a mix of fresh issue of shares up to ₹2,000 crore and an offer for sale (OFS) of up to ₹1,000 crore by ACME Cleantech Solutions Private Limited.  Out of fresh equity issuance of ₹2,000 crore, the company intends to utilise ₹1,500 crore towards repayment of loans availed by the subsidiaries and remaining fund for meeting general corporate purposes.

The Gurugram-based company has reserved up to 75% of the issue for qualified institutional buyers, up to 15% for non-institutional investors, and remaining 10% for retail individual investors. 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.

ACME Solar, in consultation with the book-running lead manager, may consider an issue of specified securities up to ₹400 crore as a "pre-IPO placement". If such placement is completed, the fresh issue size will be reduced, as per the DRHP filed with the SEBI. 

Established in 2015, ACME Solar Holdings 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 mentioned in the DRHP. 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% of its total operational projects capacity.

For the financial year 2023-24, Acme Solar reported consolidated revenue from operations at ₹1,319.25 crore, up 1.88% to from ₹1,294.90 crore in the previous year. The company turned profitable in FY24 from being loss making in FY23, posting a profit of ₹698.23 crore.  

ACME Solar was formed to consolidate the ACME Group’s renewable energy business and capitalise 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.

As per the DRHP, 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.

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.