Now Acme Solar eyes US listing through SPAC route

New Delhi: India’s largest pure-play solar platform Acme Solar Holdings Ltd is exploring a US listing through the special purpose acquisition company (SPAC) route, and has held preliminary discussions with Citibank and Credit Suisse, said two people aware of the development, seeking anonymity.

SPACs are publicly traded shell companies with no commercial operations, which help unlisted companies go public through mergers, skipping the time-consuming conventional initial public offering (IPO) route.

The SPAC deal being eyed by Acme Solar may rank among the largest green energy transactions and comes against the backdrop of ReNew Power announcing a merger with Nasdaq-listed SPAC RMG Acquisition Corp. II at an enterprise value of about $8 billion and an equity value of $4.4 billion.

After shelving their India IPO plans, green energy firms have been eyeing the SPAC route for speedier listing and lucrative valuations, amid growing focus on environmental, social and governance (ESG) investing. For instance, Hyderabad-based Mytrah Energy is exploring a merger with other green energy firms in India to create a bigger entity ahead of a SPAC listing, which was reported by Mint.

An Acme spokesperson in an emailed response said: “Information in your below mail is speculative and we strongly recommend not to publish such speculations.” Spokespersons for Citibank and Credit Suisse did not comment.

“The SPAC plan is at an exploratory and a very early stage,” said one of the two people mentioned above.

Acme Solar had also explored a plan for an IPO and a proposed infrastructure investment trust (InvIT).

Out of Acme Solar’s portfolio of 5.5 gigawatts (GW), around 3GW is operational. Last year it had sold two solar projects totaling 400MW to Actis Long Life Infrastructure Fund (ALLIF), and another 100MW to Amplus, owned by Petroliam Nasional Bhd.

Acme Solar, founded in 2003 by Manoj Kumar Upadhyay, has been looking at new business opportunities in energy storage, green hydrogen and ammonia. It plans to produce green hydrogen in India and Europe with Lhyfe Labs SAS of France. It is the last entirely promoter-owned large green energy platform in India, and its portfolio is expected to generate ₹1,600 crore of earnings before interest, tax, depreciation, and amortization (Ebitda) in FY21 at a margin of 93%, and 21% year-on-year growth in Ebitda.

For Indian green energy developers SPAC has emerged as a popular alternative to IPOs. The attraction stems from ReNew Power-RMG Acquisition Corp. II SPAC deal, which will result in net proceeds of $610 million from the listing. The overall $1.2 billion equity proceeds include a private investment in public equity deal of $855 million, which involves private placements of the common stocks in ReNew Power and $345 million in cash held by RMG II.

There are a number of Indian clean energy deals in play against the backdrop of India’s growing electricity demand, which had hit an all-time high of 189GW.