Acme Solar Holdings Limited, a leader in India's renewable energy sector, is launching its Initial Public Offering (IPO) in November 2024. With a focus on solar power projects, the company has diversified its operations to become one of the largest Independent Power Producers (IPPs) in the country.

IPO Details

The Acme Solar IPO is a Book-Built Issue with a total size of ₹29,000 Crores. This includes a Fresh Issue of ₹2,395 Crores (828.71 Lakh shares) and an Offer for Sale of ₹505 Crores (174.74 Lakh shares). The IPO subscription period runs from November 6 to November 8, 2024, and the allotment will be finalized on November 11, 2024. The shares are expected to be listed on the BSE and NSE on November 13, 2024.

The price band for the Acme Solar Holdings IPO has been set at ₹275 to ₹289 per equity share. At the upper price band of ₹289, the market capitalization of the company will be ₹17,515.70 Crores. The lot size is 51 shares, with retail investors required to invest a minimum of ₹14,739. High-Net-Worth Individuals (HNIs) need to apply for a minimum of 14 lots (714 shares), totaling ₹2,06,346.

Key IPO Details:

• Price Band: ₹275 - ₹289
• Market Capitalization at Upper Price Band: ₹17,515.70 Crores
• Lot Size: 51 shares
• Retail Minimum Investment: ₹14,739
• HNI Minimum Investment: ₹2,06,346

Acme Solar Holdings IPO Subscription Status

As of November 8, 2024, the IPO subscription stands at 2.89 times on its final day. The live subscription details can be accessed on the BSE website.

Acme Solar Holdings IPO GMP

The Grey Market Premium (GMP) for the IPO is reported at ₹0, indicating no potential listing gains at present. This suggests limited speculative activity in the grey market and that the true value of the shares will only be discovered once listed on the exchanges.

Acme Solar Holdings IPO Objectives

The funds raised from the Fresh Issue will be utilized for:

1. Repayment of borrowings for their subsidiaries.
2. General corporate purposes to fund growth and operations.

Financial Performance

For FY24, Acme Solar reported revenues of ₹14,662.67 million, an increase from ₹13,613.73 million in FY23. The company's EBITDA for FY24 stood at ₹10,891.48 million, and it posted a Profit after Tax (PAT) of ₹6,977.81 million, a significant recovery from FY23's loss of ₹31.74 million. The company’s growth trajectory has shown strong profitability, further positioning it as a major player in India's renewable energy sector.

IPO Valuation & Review

The pre-issue EPS of ₹12.55 translates into a P/E ratio of 23.02x, while the post-issue EPS of ₹11.53 gives a post-issue P/E of 25.06x. Compared to the industry average P/E of 170.3x, this indicates that the IPO is priced reasonably. The company’s cash RoE for FY24 is 38.83%, demonstrating strong returns on equity. However, given the current Grey Market Premium (GMP) of ₹0 and other financial factors, experts recommend investors avoid the IPO for listing gains or long-term investment at this stage.

Expert Advice

While Acme Solar Holdings has strong revenue growth and positive profit margins, its IPO valuation at a P/E ratio significantly lower than the industry average, combined with no potential listing gains (GMP), suggests that investors should be cautious. The lack of immediate upside potential, along with the higher-than-average risk of investing in a price-sensitive sector like renewable energy, points to a neutral or avoid recommendation for both short-term and long-term investors.

Disclaimer: The content provided here is purely educational and informational in nature. Always consult with a financial advisor before making investment decisions.

The Upcoming IPOs in this week and coming weeks are Mangal Compusolution, Onyx Biotec, Rosmerta Digital, NTPC Green, Avanse Financial and Black Buck.

The Current active IPO are  Niva Bupa Health and Neelam Lines and Garments.

For more insights into financial trends , visit our Top News Headlines. You can also explore investment opportunities in the market and apply for upcoming IPOs through our Best IPO to Apply Now section.