| Acme Cleantech Solutions Private Limited | ||||||
| Ratings continues on 'Watch Developing' | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has continues its ratings on the bank facilities of Acme Cleantech Solutions Private Limited (ACSPL) on ‘Rating Watch with Developing Implications’.
The ratings were placed on watch with developing implications as facilities rated for ACSPL were understood to be pertaining to ACSPL’s subsidiary Acme Solar Holdings Limited (ASHL) and were expected to be transferred to ASHL or get withdrawn over medium term. Additionally, Crisil Ratings was awaiting complete information following the recent changed philosophy of management and group structure with regards to operations of ACSPL including green ammonia project to resolve the watch.
The continuation of the watch with developing information is on account of Crisil Ratings still awaiting the necessary information for resolution of the watch, including complete details of ongoing green ammonia business as well as full update on debt facilities being withdrawn/ retained at ACSPL along with necessary supporting documents. The same will be necessary for resolution of the watch.
The ratings continue to reflect the track record of development and operation of solar power assets, above average financial profile supported by diverse portfolio of assets. These strengths are partially offset by implementation risk and investment requirement of under-construction portfolio and green ammonia project.
Crisil Ratings had noted successful equity listing by ACSPL’s subsidiary Acme Solar Holdings Limited (ASHL) November 2024, leading to a raise of ~Rs. 2,400 crores by ASHL through fresh issue and Rs. 500 crores through offer for sale. |
Analytical Approach Crisil Ratings has considered the standalone business and financial risk profiles of ACSPL and moderately consolidated it with its special purpose vehicles (SPVs).
And in line with the moderate consolidation approach, equity requirement for under-construction SPVs, including cost overrun in projects under implementation projects, as estimated by Crisil Ratings, have also been factored into the projections.
In line with changed philosophy of management and group structure post listing of ASHL, Crisil Ratings had revised its analytical approach of assessing ACSPL independently from ASHL. This is because the scope of the holding companies has been redefined.
ACSPL would serve as promoter holding company and undertake ventures such as development of green ammonia and module manufacturing projects. ASHL would be the developer and operator for renewable energy projects including conventional solar and wind, RTC, FDRE, battery and pumped hydro projects. All EPC and O&M would be done by ASHL. Comprehensive non-compete agreements have been signed by both the ACSPL and ASHL.
ACSPL is expected to be ring fenced and separated from ASHL following management articulation and other safeguards such as independent board and committees which will monitor any related party transactions.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation |
Key Rating Drivers & Detailed Description Strengths: Track record in the development and operation of solar power assets: Acme group (through ACSPL and ASHL) has experience of more than a decade in execution and operation of solar power projects in India. This is reflected in commissioning of approximately 4 gigawatts (GW) alternate current (AC) of solar power projects without any material cost and time overruns by ASHPL, a part of which has been sold in the past. Currently, the group has an operational solar capacity of ~2.5 GWAC.
Above average financial flexibility ACSPL holds 84% stake in ASHL which successfully executed the IPO in November 2024 and raised Rs. 2900 crores through it (including offer for sale proceeds). This has improved ACSPL’s financial flexibility by diversifying funding sources.
Weaknesses: Sizable under-construction portfolio: Around 50% of the total portfolio of the group (ACSPL and ASHL combined) is currently under construction, entailing implementation and stabilisation risks. Material delays in the implementation of these projects and higher-than-projected investment requirement can exert pressure on cash flow upstreaming to holding companies.
Implementation risks of Green Ammonia project: ACSPL, through its subsidiary, is developing 300 MTPD green ammonia project in Oman at a project cost of approximately Rs. 5000- 6000 crores. The project will have higher risk profile given limited track record and capability till date of implementation, stabilization and operations risk. ACSPL’s subsidiary has received sanction from PFC for long term debt and has also availed the first disbursement. |
Liquidity: Strong ACSPL has IREDA medium tenor debt for working capital for developing green ammonia projects. The projects are being developed by separate SPVs under ACSPL. ACSPL is expected to provide various project related support services for development/construction of the projects. The Oman project is to be commissioned in FY27 after which ACSPL would also start receiving cashflow from upstreaming from Oman project. ACSPL has an unencumbered cash balance of ~Rs 350 crores as on December 31, 2024. Additionally, ACSPL has provided BG margin of ~Rs. 150 crore for connectivity relating to solar projects for ASHL, which will be released once the ASHL related BGs shift to ASHL. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company Established in 2003, ACSPL entered the renewable energy business over a decade ago. It is promoted by Mr. Manoj Kumar Upadhyay who is a first-generation entrepreneur, having close to 25 years of experience in clean energy and telecom. ACSPL was the flagship company. The company was involved in operations and maintenance (O&M) work for solar power plants and procurement and supply of solar modules. Post listing of AHSL, ACSPL would serve as promoter holding company and is undertaking ventures such as development of green ammonia and module manufacturing projects. |
Key Financial Indicators- Crisil Ratings adjusted numbers*
*Adjusted for inter-company sales and expenses between ACSPL and ASHPL as applicable |
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
* - Includes letter of undertaking and other facilities |
Annexure - List of Entities Consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||
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Criteria Details
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