Clean energy firm Acme Group appoints banks to raise capital via InvIT
Mumbai: Delhi-based renewable energy firm Acme Group has appointed two investment banks as it starts work on a plan to raise money via an infrastructure investment trust (InvIT), according to four people aware of the development.
InvITs are trusts that manage income-generating infrastructure assets, offering investors regular yields and a liquid way to invest in infrastructure projects.
“Acme has appointed investment banks Citigroup and Axis Capital Ltd to begin work on its InvIT plans. It also plans to appoint one or two more banks and is in talks with a few bankers for the same,” one of the four people said on condition of anonymity.
The company was initially discussing an initial public offering (IPO) with these banks, but is now leaning towards an InvIT, this person added.
News channel ET Now reported last month that Acme was exploring raising capital through an InvIT.
According to the company’s website, it has an existing portfolio of over two gigawatts (GW) of solar power projects. The company aims to generate 7.5GW by 2019.
The Acme InvIT plan could see the company raise around Rs1,290-1,900 crore, said a second person, also on conditions of anonymity. This person added that since work on the InvIT is in the initial stages, the numbers could change as the deal progresses.
In November, Acme raised Rs500 crore from the Ajay Piramal-controlled Piramal Enterprises Ltd through a structured credit transaction to fund working capital requirements of the company.
Acme’s plans to raise capital through an InvIT public offering could make it the first renewable energy firm to go down this path.
Other renewable energy companies such as Mytrah Energy India Pvt. Ltd and Goldman Sachs-backed Renew Power Ventures Pvt. Ltd have mentioned plans for an IPO.
Mint reported in September that Mytrah had appointed investment banks for an IPO that could see the firm raise as much as $250-300 million. In April, The Economic Times reported that Renew Power is planning a $600 million initial share sale.
“We will soon finalize a couple of options for debt and equity fund-raising and will accordingly appoint bankers if the chosen option requires this,” a spokesperson for Acme in an emailed response to queries on its InvIT plans.
A spokesperson for Citigroup declined to comment. An email sent to Axis Capital did not elicit any response.
So far the market has seen the public offerings of two infrastructure investment trusts.
The first one to hit the markets was IRB Infrastructure Developers’ InvIT fund which raised Rs5,033 crore in May. The IPO of IRB InvIT fund was subscribed 8.57 times.
That was followed by the public offering of India Grid Trust, an infrastructure investment trust sponsored by Sterlite Power Grid Ventures Ltd, which was subscribed 1.35 times. Sterlite raised Rs2,250 crore through the IPO.