Jodhpur-based HG Infra Engineering Ltd and Gurgaon-based Renewable energy firm ACME Solar Holdings Ltd have received regulatory nod to float their initial public offerings.
The Securities and Exchange Board of India (SEBI) issued final observations to HG Infra’s IPO on 13 December and to that of ACME Solar on 15 December, according to a weekly update published by SEBI. With this, 45 firms have received SEBI clearance for IPOs so far in 2017.
Both, HG Infra and ACME Solar had filed its draft red herring prospectus (DRHP) on 28 September this year.
HG Infra has proposed to issue fresh shares worth Rs 300 crore while the promoters will sell 6 million shares.
The firm will use Rs 90 crore to buy capital equipment and spend Rs 115.7 crore toward repayment and advance payment of its debt. The company will spend an undisclosed amount on general corporate purposes.
SBI Capital Markets and HDFC Bank are the merchant bankers managing the IPO. Choice Capital is the adviser on the IPO.
Jodhpur-based HG Infra was incorporated in January 2003. It is engaged in infrastructure construction, development and management and has experience in building highways, bridges and flyovers.
It mainly provides engineering, procurement and construction services on a fixed-sum turnkey basis, besides undertaking civil construction and related infrastructure projects on an item-rate and lump-sum basis.
The company has also executed water pipeline projects and currently has two water supply projects in Rajasthan on a turnkey basis, which includes the designing, construction, operation and maintenance of the project.
HG Infra has completed 12 projects during the last five years. It currently has 29 ongoing projects in the roads and highways sector with an order book of Rs 3,811.49 crore as on July 2017.
ACME Solar Holdings plans to issue shares worth Rs 2,200 crore ($335 million) to pay debt and financing a power project, according to the draft red herring prospectus.
The company was previously contemplating a public offering through an infrastructure investment trust (InvIT), but chose the IPO anticipating weak investor sentiment for the new alternative.
ACME’s peer ReNew Power Ventures Pvt. Ltd, India’s largest renewable energy company, is also gearing up for an estimated $600 million IPO that could see its largest shareholder Goldman Sachs trim its stake.
As for ACME Solar, the firm has proposed to use the net proceeds to repay and make advance payment of certain debts, including a loan of Rs 435.69 crore from Piramal Finance and Innovador Traders Pvt. Ltd. The company also aims to repay a loan of Rs 541 crore availed from the promoter entity ACME Cleantech.
The company has set aside Rs 869 crore to fund engineering, procurement and construction works for the Bhadla power project in Rajasthan and the remaining amount for meeting expenses towards general corporate purposes.
ICICI Securities, Citigroup Global Markets India, Deutsche Equities India are the merchant bankers managing the IPO.
ACME Solar is one of the largest solar power producers in India, having a portfolio of operational and under-construction projects with total capacity of 2,351 megawatt peak, or 1,814 megawatt.
The company develops, builds, owns, operates and maintains utility-scale grid-connected solar power projects, and generates revenue by selling electricity to central and state government entities and government-backed corporations. It aims to develop and operate on-grid solar power projects using the latest photovoltaic technology.
The company, owned and operated by ACME Cleantech and Manoj Kumar Upadhyay, was established in 2015 to consolidate the ACME Group’s solar power business and to capitalise on the opportunities in the solar power sector. After a restructuring, the firm acquired all of ACME Group’s solar power assets.
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