Solar energy company ACME Solar Holdings’ ₹29 billion (~$344.85 million) initial public offering (IPO) received tepid interest from investors. At the end of the bidding window on November 8, 2024, the issue was oversubscribed 2.75 times.

Other IPOs like those of solar module manufacturers Waaree Energies and Premier Energies were oversubscribed more than 70 times.

The price band was set at ₹275-289 (~$3.27-3.43) per equity share with a face value of ₹2 (~$0.023). The IPO saw bids for 160 million shares, exceeding the 58.20 million shares on offer.

Qualified institutional buyers led the demand, with a subscription rate of 3.54, followed by retail investors at 3.10 times and employees at 1.59. The non-institutional investors’ portion was subscribed to just 0.97 times.

The company’s shares were trading at a nil grey market premium.

The shares are likely to be listed on the BSE and NSE on November 13, 2024.

AMCE raised ₹13 billion (~$154.07 million) from anchor investors ahead of its IPO. The company allocated 4.5 million equity shares at ₹289 (~$3.43) each to these investors on November 5, 2024.

Key participants included major foreign and domestic institutions such as Nippon MF, HDFC MF, ICICI Prudential MF, and the Abu Dhabi Investment Authority. Of the total allocated shares, 1.5 million shares were directed to eight domestic mutual funds, accounting for approximately 33.34% of the anchor book.

The IPO consisted of a fresh issue of shares at ₹2 (~$0.023)/share, amounting to ₹23.95 billion (~$284.80 million). It also included an offer for sale shares at ₹2 (~$0.023)/ shares amounting to ₹5.05 billion (~$60.05 million) from ACME Cleantech Solutions.

The offer is being made through the book-building process. Qualified institutional buyers were allowed at least 75% of the net offer, and non-institutional buyers were allotted at least 15%.

ACME Solar proposes to use ₹17.95 billion (~$213.45 million) from the IPO proceeds for investment in its subsidiaries to repay/prepay, in whole or in part, of certain outstanding borrowings availed by its subsidiaries from the net proceeds and the remaining will be used for general corporate purposes.

In its IPO prospectus, ACME said its business depends on ten off-takers, who are dependent on its promoter, ACME Cleantech, for raw material supplies. The company incurred a loss of ₹31.74 million (~$377,439) in FY 2023 and a profit of ₹6.98 billion (~$83 million) in FY 2024.

As of August 31, 2024, the company has an outstanding borrowing (fund-based) of ₹98.92 billion (~$1.17 billion) on a consolidated basis.

The company has an aggregate under-construction contracted capacity of 3,250 MW, and under-construction awarded capacity of 1,730 MW.

It’s been a busy year for IPOs in the clean energy sector in India. Two leading renewable energy companies—Premier Energies and Waaree Energies—raised about $850 million in their initial public offerings this year. NTPC Green Energy’s $1.18 billion IPO is likely to hit the market soon.

(This article has been updated.)