ACME Solar IPO: Day 1 Subscription at 0.2x, Retail Investors Show Strong Interest

ACME Solar Holdings has embarked on its Initial Public Offering (IPO) journey, aiming to raise Rs 2,900 crore. The IPO, which opened on November 6, 2024, has had a modest start with a 0.2x subscription rate on Day 1. Despite the low overall subscription, retail investors have been particularly active, subscribing nearly 0.7x of the portion set aside for them. This article explores the initial subscription trends, the key aspects of the IPO, and what ACME Solar plans to do with the funds raised.

IPO Subscription Breakdown on Day 1

As the ACME Solar IPO opened, the subscription statistics reflected a relatively slow pace of demand. By the close of the first day, a total of 1.04 crore shares were bid for, while 5.8 crore shares were on offer. The subscription figures reveal that:

• Retail Investors: Nearly 0.7x of their allocated portion was subscribed, indicating strong demand from the retail segment.
• Non-Institutional Investors: Their portion saw minimal interest, with only 0.05x subscribed.
• Qualified Institutional Buyers (QIBs): Similarly, the institutional quota was subscribed 0.08x.
• Employee Segment: The portion reserved for ACME Solar employees was subscribed 0.3x.

Although these figures reflect a modest start, it is expected that subscription rates could pick up as the offering progresses.

IPO Highlights and Offer Details

• Total Issue Size: Rs 2,900 croreThe IPO is a combination of a fresh issue of 8.29 crore shares worth Rs 2,395 crore and an offer for sale of 1.75 crore shares, amounting to Rs 505 crore.
• Price Range: Rs 275 to Rs 289 per shareThe IPO price band is set within a range that gives potential investors some flexibility, with the retail segment requiring a minimum investment of Rs 14,739 for 51 shares.
• Issue Period: The IPO will remain open until November 8, 2024. The allotment results are anticipated by November 11, with a listing expected to occur on the BSE and NSE on November 13.
• Anchor Investors: ACME Solar raised Rs 1,300.5 crore through a pre-IPO placement from anchor investors. This strong institutional backing demonstrates confidence in the company’s long-term growth prospects.

How Will the IPO Proceeds Be Utilized?

ACME Solar intends to deploy the funds raised through this IPO for strategic growth initiatives. Primarily, the company will use the proceeds to repay certain borrowings of its subsidiaries. Additionally, the funds will support the company’s expansion plans in the renewable energy sector, particularly in solar and wind power projects. Since its inception in 2015, ACME Solar has established itself as a key player in the green energy space, and this IPO marks a significant step in scaling up its operations.

ALSO READ| India Prepares for Trade Challenges as Trump Returns to US Presidency

Although the IPO subscription rate on Day 1 was somewhat tepid, the strong interest from retail investors signals potential growth in the coming days. With an attractive price range and a clear roadmap for utilizing the IPO proceeds, ACME Solar is poised to strengthen its position in the growing renewable energy market.

The company's focus on reducing its debt load while investing in future projects will be critical as it looks to capture further market share in the solar and wind energy sectors. Moreover, the upcoming subscription trends, especially in the institutional segments, will offer a clearer picture of the IPO’s ultimate success.

[Disclaimer: The subscription data mentioned in this blog reflects the status as of November 6, 2024. These figures are subject to change as the IPO process continues and more shares are subscribed.]