ACME Solar Holdings Limited has received a significant show cause cum demand notice from GST authorities, alleging short payment of taxes worth approximately Rs 149.73 crores. The renewable energy company disclosed this development to stock exchanges on March 29, 2026, in compliance with regulatory requirements.

GST Demand Notice Details

The show cause cum demand notice was issued by the Office of the Directorate General of Goods & Services Tax Intelligence, Jaipur Zonal Unit, Rajasthan, dated March 23, 2026, and received by the company on March 28, 2026. The notice has been issued under the CGST Act, 2017 and RGST Act, 2017.

Nature of Allegations

The GST Intelligence has alleged short payment of GST on supply of goods and services related to solar power generating systems. The demand covers a four-year period from April 2021 to March 2025, with the total GST demand aggregating to approximately Rs 149.73 crores, along with applicable interest and penalty.

Industry-Wide Issue

According to the company's disclosure, based on publicly available information, the GST department has issued similar notices to several other renewable energy companies. Such demands are currently being contested before various judicial forums across the country, indicating this may be part of a broader scrutiny of the renewable energy sector's GST compliance.

Company's Response Strategy

ACME Solar Holdings is taking a measured approach to address the notice:

• Reviewing the show cause notice with tax and legal advisors
• Planning to contest the matter before appropriate forums as advised
• Expects no immediate financial or operational impact from the notice

The company has emphasized that it does not anticipate any immediate financial or operational disruption due to this GST demand notice, suggesting confidence in its position and the contestability of the allegations.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulations, 2015. The company provided detailed information as required under the SEBI Master Circular, ensuring full transparency with stakeholders regarding this material development.

ACME Solar Holdings has received a positive initiation from Investec, with the brokerage assigning a Buy rating and setting a target price of Rs 319. The recommendation reflects strong fundamentals and growth prospects in the renewable energy sector.

Key Investment Highlights

Investec's bullish stance is supported by several compelling factors that position the company for structural growth in the coming years.

Strong FDRE Positioning

The company's strategic focus on Firm and Dispatchable Renewable Energy (FDRE) stands out as a key differentiator. With a 49% FDRE mix, ACME Solar Holdings is well-positioned to capitalize on the growing demand for reliable renewable energy solutions that can provide consistent power supply.

Growth Trajectory and Financial Metrics

Investec projects robust financial performance with an impressive 63% EBITDA CAGR, indicating strong earnings growth potential. The improving Return on Capital Employed (ROCE) metrics, expected to reach 11-13%, demonstrate enhanced capital efficiency and operational effectiveness.

Capacity Expansion Plans

The company's planned capacity additions through FY28, supported by a substantial pipeline of approximately 5GW, provide clear visibility on future growth. This expansion strategy aligns with India's renewable energy targets and the increasing corporate demand for clean energy solutions.

Valuation Attractiveness

At approximately 8x FY28 EV/EBITDA multiple, Investec views the stock as attractively valued, offering investors an opportunity to participate in the structural growth of India's renewable energy sector.