Acme Solar IPO 2024: Key Dates, Price Band & Investment Guide

Acme Solar Holdings Limited, one of India’s top independent power producers (IPPs), is set to launch its Initial Public Offering (IPO) on November 6, 2024. The IPO aims to raise ₹2,900 crores, offering an opportunity for investors to join in the growth of a company actively advancing India’s renewable energy sector. The question is should you invest in it? 

Here’s are 10 key things you should know before investing. 

 What are the IPO dates, price band, and issue size?

Here are the key details for the Acme Solar IPO: 

What is the minimum investment for Acme Solar Holdings IPO?

The minimum investment to apply for Acme Solar IPO is ₹14,739 or 51 shares (at the upper band of ₹289 per share). 

What does the company do?

Established in 2015, Acme Solar Holdings Limited focuses on renewable energy projects across solar, wind, hybrid, and firm and dispatchable renewable energy (FDRE) sources. It develops, owns, and operates utility-scale projects and manages them through inhouse engineering, procurement, and construction (EPC) and operations and maintenance (O&M) teams. Acme Solar provides power to government and other entities, ensuring reliable energy supply through projects with long-term agreements. 

With a track record of executing 2,719 MW of solar projects, Acme Solar currently manages 1,340 MW of operational capacity. Its robust portfolio includes under-construction projects totalling 3,250 MW and awarded projects in development with a combined capacity of 1,730 MW, positioning the company as a significant player in India’s growing renewable energy market. 

What is the Acme Solar IPO objective?

 The proceeds from the IPO will be utilized as follows: 

• Investment in subsidiaries for repayment/prepayment of outstanding loans. 

• General corporate purposes. 

How much is the IPO reservation for retail and other investors?

The IPO allocation is as follows: 

•     Qualified Institutional Buyers (QIBs): 75% 

•     Retail Investors: 10% 

•     NonInstitutional Investors: 15% 

What are the key strengths and potential risks of investing in Acme Solar Holdings IPO?

Key Strengths 

• One of India’s largest renewable energy IPPs, with a diverse operational and pipeline project portfolio. 

• Integrated in-house approach from project bidding to long-term maintenance ensures efficient execution and consistent quality. 

• Successful competitive bidding across renewable energy sectors demonstrates its market adaptability. 

• Long-term stability from 25-year power purchase agreements (PPAs) with central and state-backed entities, providing reliable revenue streams. 

 Potential Risks 

• Regulatory changes in the renewable energy industry could impact project approvals, tariffs, and operating standards. 

• Intense competition in renewable project auctions, with future growth dependent on successful bid wins and project execution. 

• Lack of long-term supplier agreements, as components are typically sourced through purchase orders. 

• Dependence on PPAs to sell power; any failure in managing costs or obtaining necessary regulatory approvals could lead to penalties or PPA terminations. 

Solar has shown consistent financial growth with a focus on profitability and asset expansion. Here’s a summary of their financial details:

What is the allotment date of Acme Solar Holdings IPO?

The IPO allotment date is set for November 13, 2024. You can visit the website of the registrar of the IPO to check the allotment status. 

Who are the merchant bankers and registrars of Acme Solar IPO?

To handle this significant IPO, ACME Solar has brought in well-reputed institutions as book-runners, including Nuvama Wealth Management, ICICI Securities, JM Financial, Kotak Mahindra Capital, and Motilal Oswal Investment Advisors. Kfin Technologies Ltd has been appointed as the registrar for the IPO. 

Should you invest in Acme Solar Holdings Limited IPO?

Acme Solar’s focus on integrated project management and long-term PPAs with government-backed entities offers stability. Its successful bidding in renewable energy projects positions it well to benefit from India’s expanding renewable market. At the upper band of ₹289, the IPO is valued at a P/E ratio that reflects the growth potential in India’s renewable sector. However, the risks associated with regulatory changes and competitive auctions mean this IPO may be better suited for investors with a higher risk appetite.