ACME Solar Holdings Limited

ACME Solar Holdings Limited is a renewable energy company in India with a portfolio of solar, wind, hybrid and firm and dispatchable renewable energy ('FDRE') projects. They are one of the largest renewable energy independent power producers ('IPP') in India. They have diversified and expanded the portfolio from solar power projects to become an integrated renewable energy company in India. They develop, build, own, operate and maintain utility scale renewable energy projects (through their in-house engineering, procurement and construction ('EPC') division and operation and maintenance ('O&M') team, and generate revenue through the sale of electricity to various off-takers including central and state government-backed entities. Company has an aggregate Operational Project capacity of 1,340 MW (1,826 MWp) solar power projects; Under Construction Contracted Project capacity of 3,250 MW including solar power projects of 1,500 MW (2,192 MWp), wind power projects of 150 MW, hybrid projects of 1,030 MW and FDRE projects of 570 MW; and Under Construction Awarded Project capacity of 1,730 MW comprising 600 MW (870 MWp) of solar power projects, 450 MW hybrid power projects and 680 MW of FDRE power projects, as of the date of this Red Herring Prospectus. In Fiscal 2024, the ACME Group was one of the leading bidders for FDRE projects entailing integration of solar, wind and battery storage technologies to deliver continuous power especially during peak demand hours. It won projects with an aggregate capacity of 1,250 MW out of 8,250 MW auctioned representing 15.15% of the total FDRE projects bids in India during Fiscal 2024. Company has an expansive portfolio of projects diversified across different renewable energy technologies. The projects are located across 11 Indian states of Rajasthan, Gujarat, Punjab, Madhya Pradesh, Uttar Pradesh, Bihar, Chattisgarh, Andhra Pradesh, Odisha, Karnataka and Telangana. They have an aggregate Operational Project capacity of 1,340 MW (1,826 MWp) solar power projects; Under Construction Contracted Project capacity of 3,250 MW including solar power projects of 1,500 MW (2,192 MWp), wind power projects of 150, hybrid projects of 1,030 MW and FDRE projects of 570 MW; and Under Construction Awarded Project capacity of 1,730 MW comprising 600 MW (870 MWp) of solar power projects, 450 MW hybrid power projects and 680 MW of FDRE power projects, as of the date of this Red Herring Prospectus.  As per financial performance, ACME Solar Holdings Limited has posted total income / net profits of Rs 1,562.73 Cr / Rs 62.01 Cr (FY22), Rs 1,361.37 Cr / (3.17) Cr (FY23), Rs 1,466.27 Cr / Rs 697.78 Cr (FY24) and Rs 340.01 Cr / 1.39 Cr (Q1 FY25). So as per previous financials data, company has shown inconsistent results, but cash flow of company is good. Company has an average EPS of Rs 6.44 and average RoNW of 13.95% for last three fiscals. Issue is priced at a P/BV of 7.77 as per NAV of Rs 37.19/- as on 30.06.24. If we attribute latest earnings of FY23, FY24, TTM and annualised FY25 on equity post issue, then asking price is at a P/E of around NA, 25.06, 28.35 and 3147 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, five lead managers are associated with this IPO, and have handled around 148 IPOs in last three fiscals. As per financials, ACME Solar Holdings Limited has shown inconsistent results, RoNW is 26.93% and P/E is NA, 25.06, 28.35 and 3147 respectively as per FY23, FY24, TTM and annualised FY25 earnings. So, issue looks fully priced as compared to listed peers. Company is a renewable energy company in India, which is very competitive and fragmented business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

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