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ACME Solar Holdings Ltd., a prominent player in the Indian solar energy sector, is gearing up for its highly anticipated initial public offering (IPO). The company has announced that bids for the ₹2,900 crore IPO will be open from November 6th to November 8th. The IPO price band has been fixed between ₹275 and ₹289 per share, with shares being allotted in lots of 51 and multiples thereof. This move signifies a significant milestone for ACME Solar Holdings as it seeks to tap into the capital markets for further expansion and growth.
The IPO structure comprises a fresh issue of ₹2,395 crore and an offer for sale (OFS) of ₹505 crore. After the successful completion of the IPO, ACME Cleantech, the holding company that currently owns 100% of ACME Solar Holdings, will dilute its stake to 84%. This strategic move is expected to provide the company with greater financial flexibility and pave the way for future endeavors. Manoj K Upadhyay, the Founder and Chairman of ACME Solar Holdings, has confirmed that the majority of the proceeds from the IPO will be allocated towards settling the outstanding debts of the company's subsidiary. This proactive approach towards debt reduction reflects the company's commitment to optimizing its financial health and ensuring long-term sustainability.
One of the major risks highlighted by the company is its reliance on China for photovoltaic (PV) modules, which account for 95% of the global supply chain. In response to this dependence, the Indian government has implemented an approved list of module manufacturers, effectively mandating the sourcing of all modules from within the country. This policy shift has resulted in a change in the company's import strategy. ACME Solar Holdings has shifted from importing complete modules to sourcing only cells, thus reducing its import dependence to 10-20% of the total import cost. This move will contribute to bolstering the Indian solar energy industry while simultaneously mitigating risks associated with external supply chain disruptions. The IPO of ACME Solar Holdings is a testament to the burgeoning solar energy sector in India. The company's strategic focus on debt reduction and its commitment to domestic manufacturing are likely to attract significant investor interest, further propelling the growth and development of this vital sector.
Source: ACME Solar Holdings open bids for ₹2,900 crore IPO Nov. 6