Acme Solar Holdings disappoints D-Street; shares list at 13% discount

Renewable energy company Acme Solar Holdings made a weak debut on the stock market on Wednesday, which was in contrast to Swiggy, which listed at a premium of 8% over the initial public offering (IPO) price. The shares of Acme Solar Holdings listed at ₹251 per share, a discount of 13% over the issue price of ₹289 on the NSE.  

Post listing, shares of Acme Solar Holdings gained some ground and touched a high of ₹276.10 apiece. At the time of reporting, the stock was trading at 260.85, with a market capitalisation of ₹15,784 crore.   

Meanwhile, shares of Swiggy listed at ₹420 on the NSE, up 7.7% over the issue price of ₹390 apiece. Following a positive debut, the foodtech stock was trading 13.5% higher at 442, with a market capitalisation of ₹99,062 crore.

“Acme Clean Energy Limited made a disappointing debut on the stock market, listing at ₹251 per share, a 13% discount to its issue price of ₹289. This negative listing, despite a moderate subscription of 2.89 times, indicates a subdued investor response,” says Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.

“While the company operates in the promising renewable energy sector and has demonstrated strong growth and improved profitability, the high debt-to-equity ratio and the overall market sentiment might have influenced the negative listing,” says Nyati.

She advised investors who participated in the IPO to carefully consider their investment strategy and reassess their holding based on the company's future performance and market dynamics.

Acme Solar Holdings, a solar energy company, raised ₹2,900 crore via IPO, which was a combination of fresh issue of ₹2,395 crore and offer for sale of shares worth ₹505 crore. The issue, which opened for subscription between November 6-8, was subscribed 2.89 times on the last day, after receiving a muted response from investors in the first two days of bidding. The quota reserved for retail investors was booked 3.25 times, while qualified institutions buyers (QIB) and non-institutional investor (NII) portions were subscribed 3.72 times and 1.02 times, respectively.

The company intends to utilise the net proceeds from the fresh issuance largely for paying outstanding loans availed by the subsidiaries. A part of the capital will be used for general corporate purposes.

Ahead of IPO, the company raised ₹1300.50 crore from anchor investors, which saw participation from foreign and domestic institutions. Nippon Mutual Fund, HDFC MF, ICICI Prudential MF, Abu Dhabi Investment Authority, TATA MF, Mirae MF, HSBC Global Investment Fund, SBI Life Insurance, ICICI Prudential Life Insurance, BNP Paribas Energy Transition Fund, and others participated in the anchor book.

Established in 2015, ACME Solar Holdings is in a renewable energy business and is one of the largest producers of electricity from wind and solar energy in India. It has diversified and expanded its portfolio from solar power projects to become an integrated renewable energy company in India. 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.

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.

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