Acme Solar Rallies After Launching ₹2,800-Crore QIP For Debt Reduction

Shares of Acme Solar Holdings gained sharply on Tuesday after the company initiated a qualified institutional placement (QIP) to raise as much as ₹2,800 crore. The fundraising exercise is intended to strengthen the company’s balance sheet, reduce debt and support general corporate requirements.

The stock was trading at ₹330.25 in afternoon trade, up 7.5% from the previous close. Over the past year, Acme Solar shares have risen 28%, outperforming the Nifty 50, which has declined 5.6% during the same period. The company currently has a market capitalisation of nearly ₹20,000 crore.

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Fundraising Structure

According to a term sheet accessed by CNBC-TV18, the QIP comprises a base issue size of ₹2,600 crore and includes a greenshoe option of ₹200 crore.

The indicative issue price has been set at ₹279.50 per share, representing a discount of around 9% to the previous day’s closing price. The company has fixed the floor price at ₹294.13 per share, which is approximately 4.2% lower than Monday’s closing level of ₹307.20.

The final issue price will be determined through the book-building process based on investor demand. If the issue is fully subscribed, the equity dilution is expected to be about 11.82% of the company’s pre-issue outstanding share capital.

Focus On Balance Sheet Strengthening

A major objective of the capital raise is debt reduction. The proposed fund infusion is expected to improve the company’s financial position by lowering leverage levels while also providing flexibility for future growth initiatives.

The issue is also likely to help Acme Solar move closer to compliance with the Securities and Exchange Board of India’s minimum public shareholding norms. Promoters currently own approximately 83.3% of the company’s equity, leaving a relatively limited public float.

Raising shares publicly via the QIP would have the effect of enhancing stock liquidity and attracting more institutional investors.

Expansion Plans Continue As Expected

These are being made despite continuing expansion efforts on its renewable energy projects in the areas of solar power generation and storage.

During its recent earnings presentation, the company pointed out that project execution and acquisition of new orders were its current focus areas. It further emphasized that it was making significant gains in developing battery energy storage systems (BESS), which form an important part of its growth strategy.

According to the company’s projections, its future portfolio will consist of about 10 gigawatt hours of battery energy storage along with approximately 1.5 gigawatts of generation capacity. These numbers assume connectivity and other project approvals.

The proposed fund-raising exercise will assist the company with implementing its expansion plans.