ACME Solar Holding in talks to raise up to $416m through InvIT

ACME Solar Holdings Ltd plans to raise up to Rs3,000 crore through an infrastructure investment trust (InvIT) amid a prolonged delay in a planned initial share sale.

“Given our 100% shareholding from sponsor and no requirement of liquidity at secondary level to liquidate shareholding like a financial sponsor, we believe an investment trust would be an ideal platform for us to establish a vehicle, targeting long-term yield seeking investors,” Nikhil Dhingra, ACME Solar’s chief executive, said in an interview.

The company expects to raise around Rs2,500-Rs3,000 crore through the InvIT, he said, adding the trust will likely include assets totaling 600-800 megawatts. The company is currently in discussions with potential bankers, he added.

InvITs are trusts that manage income-generating infrastructure assets, typically offering investors regular yield and a liquid method of investing in infrastructure projects.

A successful completion of the InvIT plan will make ACME the first renewable energy producer in India to tap the trust route for raising funds.

Promoted by Manoj Upadhyay, ACME Solar was founded in 2015, to consolidate ACME Group’s solar power business and to tap other solar power prospects.

Dhingra said the company has a sizeable portfolio of operating assets delivering predictable yields, making them attractive for a product such as an infrastructure investment trust.

He said the company has about 2.3 gigawatts of solar capacity across 13 states, “which will give us an Ebitda (Earnings before interest, tax, depreciation and amortization) of ₹1,800 crore and annual cash accruals of around ₹550 crore.”

ACME Solar had in September 2017 filed a so-called draft red herring prospectus to raise about ₹2,200 crore through an IPO. The company plans to re-file the DRHP, Mint reported in April.

“Jury is still out whether IPO is the right solution for this sector given the high-growth pipeline, which gives it a characteristic of a growth sector which traditionally a utility sector like power is not perceived to by public investors,” said Dhingra.

He said the company is also exploring raising debt through an overseas and local bond issuance to diversify its lender base and refinance the portfolio.

ACME’s plans to look at an InvIT also reflect a change of strategy for renewable companies, many of which were looking to tap the equity capital markets to raise funds.

In July, The Economic Times reported that India’s largest renewable energy company ReNew Power Ltd was likely to defer its IPO because of differences with investors on valuation.

Apart from ReNew, Sembcorp India Energy Ltd, which has an over 1GW portfolio of renewable assets has also been trying to go public. Earlier, Mytrah Energy had hired bankers to look at a public listing but did not go ahead with the plan.

So far, only three companies have tapped the InvIT route belonging to either the road or transmission sectors.

In May, Canada’s largest pension fund Canada Pension Plan Investment Board (CPPIB) and Allianz Capital Partners (ACP), part of insurance giant Allianz, invested in the first private infrastructure investment trust in India—IndInfravit Trust, sponsored by L&T Infrastructure Development Projects Ltd.

CPPIB invested approximately Canadian $200 million for 30% of IndInfravit units, while ACP acquired 25% of the units, Mint reported.

IRB Infrastructure Developers raised ₹5,033 crore last year from listing its infrastructure investment trust, while India Grid Trust, an infrastructure investment trust sponsored by Sterlite Power Grid Ventures Ltd raised ₹2,250 crore.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.