IPO listed on 13 Nov'24
ACME Solar Holdings Ltd
Minimum Investment
₹ 14,739 / 51 shares
Grey market premium
₹ 10 (3% premium)
Issue price
₹ 289
Listing price
₹ 251
Listing day %
-12%
Listing on
Nov 13, 2024
Our Verdict:
Neutral
- ACME Solar Holdings Ltd stands out as a significant participant in solar power generation with an impressive commissioning record of 2,719 MW in solar projects. Moreover, the company is actively expanding its operational capacity to capture emerging market opportunities.
- However, its financial performance continues to exhibit uncertainty. The company reported a loss in FY23 and its FY24 profitability largely stems from the sale of exceptional items, highlighting a potential risk.
- In terms of valuations, the IPO is attractively priced at a Price-to-Earnings ratio of 23x, which is significantly lower than its competitors.
- Given these aspects, investors with a high risk-appetite may consider subscribing to the IPO while those averse to risk should closely observe the company's performance over the next two to three quarters to evaluate its financial stability before making an investment commitment.
About the company
Founded in
3 Jun'15
Managing director
Manoj Kumar Upadhyay
- ACME specializes in the development, construction, ownership, operation, and maintenance of utility-scale renewable energy projects, managed by its in-house Engineering, Procurement, and Construction (EPC) division and dedicated Operation and Maintenance (O&M) team.
- The firm generates revenue by selling electricity to a range of clients, including entities supported by central and state governments. Originally focused on solar energy, ACME has since diversified, becoming a comprehensive renewable energy company committed to advancing sustainable energy throughout India.
STRENGTHS
- Strong Execution Capabilities: ACME ranks among India's top ten renewable energy providers by operational capacity as of June 30, 2024. Since its inception, the company has developed, executed, and commissioned 2,719 MW of solar power projects across 12 states.
- Expanding Product Portfolio: Initially focused on solar energy, ACME has diversified into wind energy and other renewable sectors. With an operational capacity of 1,340 MW, the company has an under-construction contracted project capacity of 3,250 MW and an under-construction awarded project capacity of 1,730 MW.
- End-to-End Value Chain Capabilities: ACME employs a fully integrated, in-house approach to project execution, encompassing all stages from Power Purchase Agreement (PPA) signing to commercial operations within an 18-24 month timeframe, along with long-term operations and maintenance. In FY24, the firm secured 2,400 MW of connectivity, and in FY25 (to date), it has obtained 2,150 MW from government and state entities.
RISK FACTORS
- Inconsistency in Financials: ACME reported a substantial net profit of Rs 697.78 crore in FY24, a sharp turnaround from a loss of Rs 3.17 crore in FY23 and a profit of Rs 62.01 crore in FY22. However, this profit largely stems from the sale of exceptional items totalling Rs 748 crore. It's crucial for investors to note that operating revenue fell from Rs 1,488 crore in FY22 to Rs 1,319 crore in FY24.
- Client Concentration: ACME heavily relies on its top 10 clients, who accounted for 95.42% of its operational revenue in the quarter ending June 30, 2024. Losing any of these key clients could significantly harm the company’s financial and operational performance.
- Geographic Concentration: A significant portion of ACME’s operations are concentrated in Andhra Pradesh, Rajasthan, and Telangana, which together generated 79.81% of its revenue in the quarter ending June 30, 2024. Changes in government policies or natural disasters in these states could adversely affect the company’s operations and financial results.
- Legal Risks: ACME is engaged in ongoing legal disputes that total Rs 934 crore. An unfavourable resolution to these disputes could negatively impact the firm’s reputation and financial standing.
Issue details
Issue type
Mainstream
Issue size
₹ 2,900 crore
Fresh Issue
₹ 2,395 crore
OFS
₹ 505 crore
Price range
₹ 275 - 289
Lot size
51 shares
Issue Objective
ACME proposes to utilize the net proceeds from the issue towards:
- Repaying or prepaying certain borrowings availed by its subsidiaries; and
- General corporate purposes.
Dates
Bidding open
6 Nov'24
Bidding close
8 Nov'24
Allotment date
11 Nov'24
Refund date
12 Nov'24
Listing
13 Nov'24
IPO Reservations
Qualified institutional buyers
> 75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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