ACME Solar IPO: Concentrated revenue, dependence on govt-owned infra among key risks [Video]

Concentrated revenue risk, dependence on government-owned transmission grids and infrastructure, and growth relying on winning highly competitive project bids are key risks for ACME Solar Holdings IPO, a brokerage firm said on Tuesday.

The IPO is a mix of fresh issue of up to Rs 2,395 crore and an offer of sale (OFS) of up to Rs 505 crore.

According to a note by Bajaj Broking, the company focuses on the development, construction, ownership, operation, and maintenance of large-scale renewable energy projects.

It accomplishes this through its internal engineering, procurement and construction (EPC) division, and operations and maintenance (O&M) team. The company generates revenue by selling electricity to various clients, including those supported by the Central and state governments.

Citing key risks of its business, the brokerage note read: “Concentrated revenue risk: 63.22 per cent of revenue from Andhra Pradesh, Rajasthan, and Telangana; dependence on government-owned transmission grids and infrastructure …