ACME Solar tanks 20% in 2 days; Morgan Stanley IFSC fund sells 3 mn shares

ACME Solar Holdings slipped 9 per cent to Rs 230.35 on the National Stock Exchange in Thursday's intra-day.

Shares of ACME Solar Holdings slipped 9 per cent to Rs 230.35 on the National Stock Exchange (NSE) in Thursday’s intra-day trade amid heavy volumes after making a weak debut on Wednesday.  In two days, the stock has declined 20 per cent against its issue price of Rs 289 per share.

 

On November 13, Morgan Stanley IFSC Fund sold 3.1 million equity shares, representing 0.51 per cent of the total equity of ACME Solar, at a price of Rs 260.31 on the NSE via block deals. The name of the buyer could not be ascertained immediately.

 

At 01:44 PM, ACME Solar was quoting 6 per cent lower at Rs 238, as compared to the 0.16 per cent decline in the Nifty 50. A combined 4.1 million equity shares have changed hands on the NSE and BSE.

 

ACME Solar had made a disappointing debut on the bourses, with its shares getting listed at Rs 251, which was 13.14 per cent below its issue price. 

 

The company is a leading player in the Indian renewable energy sector, specialising in solar and wind energy projects. As of March 2024, the company’s operational solar capacity reached 1,320 MW.  After a dip in profitability in FY23, ACME recently demonstrated exceptional growth with strong margins. The company's debt-to-equity ratio also remains significantly high.

 

However, the company may not be able to grow its portfolio of renewable energy power projects as it relies on highly competitive renewable energy power project auctions. Further, its future growth is significantly dependent on successfully executing its Under Construction Awarded Projects and Under Construction Contracted Projects.  According to analysts, the company's business and results of operations may be adversely impacted in case they are not able tot successfully execute their future projects. 

 

While the company has experience in commissioning solar power projects, It does not have experience in commissioning wind, hybrid, and FDRE power projects, apart from closed-loop pump storage projects. Without prior experience in commissioning such projects, they could encounter delays and unexpected costs, which would undermine the project's viability and profitability. These are among key risk factors, JM Financial said in its IPO note.