ACME Solar Holdings Limited’s initial public offer was subscribed a total of 2.89 times. Qualified Institutional Buyers (QIB) subscribed the most at 3.72 times and the retail investor category subscribed 3.25 times. Whereas, the non-institutional investors (NII) category subscribed 1.02 times. Now on November 13, the company’s shares will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Before the listing, Dainik Bhaskar spoke to the company’s founder and chairman Manoj Upadhyay and CEO Nikhil Dhingra. Both told that after energy conservation, the company has started the business of energy generation. Profitability has been good in our business. Our profit in EPC (engineering, procurement and construction) business has been 15% and in power cell it has been 12%-15%. Along with this, both also shared many things related to the company’s business. Read the full interview… Answer: How has been the journey of ACME Solar Holdings so far, how did you start it? What challenges did you face? Question: Answering this question, founder Manoj Upadhyay said that I am a technology man. I started this company in 2003, I invented a power interface unit and phase change mechanism. We started with energy conservation. Both of our products were so successful that many telecom companies of the country used them. When it cost Rs 15 per minute to make a call, at that time this technology helped a lot in reducing the power cost, which helped in reducing the cost of telephone. In 2009, we decided to move from energy conservation to energy generation. At that time the cost of solar was Rs 15 per kilowatt, but then we believed that this is such a technology that it will keep improving every year. Then we decided that we will work in this sector. We formed our entire team and started our journey of energy generation by setting up our first 15 watt project in Gujarat. In 2017, we completed 1 gigawatt and then in 2018, we set up another 1 gigawatt project. We are one of the few solar companies in the country that has 15 years of experience. Question: What is the core mission and vision of the company? Answer: Our core mission is to produce electrons at a very optimized cost, so that people can adopt green electrons. At the same time, our vision is to become a good green energy utility. Question: What products does the company make and how many manufacturing facilities does it have? Answer: Just like NTPC makes thermal power, we also make solar power. Apart from this, we also provide EPC (engineering, procurement and construction) services. In EPC, we set up big solar plants, in which we buy land and also do everything from connectivity to construction. The CEO of the company said that we set up plants for government companies and then own them and give them power. He said that in the government’s 50 GW per year program, we have won very good bids last year. In this, we also have to provide hybrid power. In hybrid power, instead of only solar, wind and battery plants are also installed. So that, more energy is produced. Nikhil Dhingra told that 30% runs in solar. That means that out of 24 hours in a day, solar runs for 7-8 hours. If power has to be given for a longer time, then wind and battery also have to be installed along with solar. He said that this will gradually increase the replacement of thermal power and in future it will not be dependent on thermal power. Question: Who is your primary customer and have you decided any plan to increase it? Answer: Our primary customers are the government’s Solar Energy Corporation of India, National Thermal Power Corporation Limited (NTPC), National Hydroelectric Power Corporation Limited (NHPC) and Satluj Jal Vidyut Nigam (SJVN). Our business is done by purchasing electricity from the government, which we get through bidding. To get government projects through bidding, we prepare in advance. For bidding, connectivity has to be taken on the national grid. We have connectivity of about 3300 MW, which we can use for further bidding. Our plan is to get bids for as many projects as possible. Question: Can you tell us about any product innovation of the company which makes you different from others and who are your competitors? Answer: This is a sector where technology changes very quickly. The technology of modules, batteries and inverters changes. Along with this, new methods of setting up plants also come. We have adopted a lot of new technology during construction. Many new things have been adopted including robotic cleaning, which reduces the cost of construction and also the cost of operations. Along with this, founder and chairman Manoj Upadhyay said that our new product will be how we provide such power by using solar, wind and battery, which the distribution company can use as per its convenience. Giving an example, he said that power is used differently in the house in the morning, afternoon, evening and night. We will have a similar product in the future, in which power is generated through different technologies according to the consumption of the house. Our competitor companies include Adani Green Energy, Renew Power and NTPC’s subsidiary company NTPC Green Energy, which work in this sector. Question: How has the financial performance of the company been in the last few years, can you give a summary of it? Answer: The financial performance of our company has been good. A plant of about 550 MW has been installed in the last 3 years. Talking about this year, we have set up a big plant of 1200 MW. In the last 3 and a half years, we are increasing our 1800 MW capacity to 3600 MW. Our profitability in this has also been good. Our profit in EPC business is 15% and in power cell it is 12%-15%. Question: When did you think that an IPO should be brought and how will you use the ?2,395 crore raised through fresh issue? Answer: We thought about bringing an IPO 9 months ago. When we saw that the government’s program has expanded a lot and there is no issue from the demand side for growth, we felt the need for more money to expand the business. Understanding among people about this sector has increased a lot and the outlook is also very positive, due to which our growth path is very clear. At the same time, Manoj Upadhyay said that from the funds raised through the fresh issue, we will pay the debt of some of our subsidiary companies of Rs 1800 crore. We will use the rest for general corporate purpose. He said that there is no debt in the company to be listed. We have to form a company for each project because the government rules that a company with PPA (Power Purchase Agreement) will not do any other work. We take advanced debt (loan) against the cash flow of the project that we form a PPA company because the projects we set up are available at the price of power for 25 years. After the loan payment, the entire cash flow will be available for our growth, which we will use for our current project. Question: How does the OFS of ?505 crore affect your company, considering that the company will not get any income from it? Answer: The OFS of ?505 crore will go to our sponsor company Acme Tech Solutions. This does not affect us in any way because even after this the promoter’s holding will be close to 84%. Right now our entire stake is with the sponsor company, so the sponsor will have 84% stake. OFS will increase the liquidity with the sponsor company, due to which if they have to do any other business, they can do it. Like we are thinking about the business of green hydrogen and have also done some work on it. The sponsor will help for that and will also help this company in future if needed. Question: What other projects is your company working on to improve its positive impact on the environment? Answer: Our promoter has just started a new business of green hydrogen, with the help of which we set up a pilot project of green hydrogen in Bikaner. It was very successful, after which we have started work to set up a big plant. The green hydrogen sector will also grow a lot in the future. He said that the hydrogen that is produced now is entirely made from fossil fuel, which is very bad for the environment. The advantage of green hydrogen is that it is completely made from renewable sources and its cost is also fixed. It has a lot of scope in Europe right now and a very good hydrogen mission has been launched in our country too, which will have a lot of growth in the next 2-3 years. Question: What kind of returns can your shareholders get in the coming 2-3 years? Answer: In response to this question, the chairman said that we want our shareholders to get very good returns. We will try our best to run our business very well, so that our shareholders will also benefit along with us. Question: Any special thing related to the company or IPO that you want to share with investors? Answer: It is very important for investors to understand our business model. Our business is a very stable business. Investors can invest for a long time by considering it a stable as well as a profitable business. Retail investors could bid for a maximum of 663 shares. ACME Solar Holdings had fixed the price band of the IPO at ?275-?289. Retail investors could bid for a minimum of one lot i.e. 51 shares. If you apply for 1 lot as per the IPO’s upper price band of ?289, then you would have to invest ?14,739 for it. On the other hand, retail investors could apply for a maximum of 13 lots i.e. 663 shares. For this, investors would have to invest ?191,607 as per the upper price band. This issue was worth ?2,900 crores. This issue of ACME Solar Holdings was worth a total of ?2,900 crores. For this, the company is issuing 82,871,973 fresh shares worth ?2,395 crores. Whereas, the existing investors of the company are selling 17,474,049 shares worth ? 505 crore through Offer for Sale i.e. OFS.
