ACME Solar Holdings Limited , a leading integrated renewable energy firm, has received its highest-ever credit rating of 'ICRA AA-/Stable' from ICRA Limited for its long-term non-fund based bank facilities. This significant upgrade in credit rating is expected to have positive implications for the company's borrowing costs and financial flexibility.

Rating Rationale

ICRA's rating decision reflects several key strengths of ACME Solar:

• Diversified Portfolio: The company's assets are spread across multiple locations with central government off-takers, reducing geographical and operational risks.
• Revenue Visibility: Long-term power purchase agreements provide stable and predictable cash flows.
• Operational Excellence: Optimal generation performance across its portfolio.
• Financial Health: Comfortable debt coverage metrics, indicating strong financial management.

Post-IPO Financial Strength

ICRA highlighted ACME Solar's strengthened financial position following its successful initial public offering (IPO). The improved financial standing, coupled with the availability of equity funding for construction projects, has contributed to the company's enhanced credit profile.

Operational Capacity and Capabilities

ACME Solar operates as an integrated renewable energy firm with:

• 2,890 MW of operational capacity
• Diverse offerings including solar, wind, storage, and hybrid solutions
• In-house engineering and construction capabilities

This vertical integration and diverse technology mix position ACME Solar as a comprehensive player in the renewable energy sector.

Market Performance

On the day of this announcement, ACME Solar Holdings Limited's shares closed at ₹286.60 on the National Stock Exchange (NSE), experiencing a marginal decline of ₹1.70 or 0.59%.

Implications of the Credit Rating Upgrade

The 'ICRA AA-/Stable' rating, being the highest ever assigned to ACME Solar, is expected to yield several benefits:

1. Reduced Borrowing Costs: The company and its subsidiaries are likely to enjoy more favorable interest rates on their debt.
2. Enhanced Financial Flexibility: A higher credit rating may provide easier access to capital markets and diverse funding sources.
3. Increased Investor Confidence: The rating upgrade could potentially attract a wider range of investors, both institutional and retail.

As the renewable energy sector continues to grow, ACME Solar's improved credit profile positions it well to capitalize on emerging opportunities and potentially expand its operational footprint.

ACME Solar Holdings has received a significant boost for its 250 MW renewable energy project, as credit rating agency ICRA upgrades the project's rating to 'ICRA AA-/Stable' from 'ICRA A+/Stable'. This upgrade reflects an improved creditworthiness assessment for the renewable energy venture.

Project Details and Rating Rationale

The rating upgrade applies to ACME Aklera Power Technology Private Limited (AKPTPL), a wholly-owned subsidiary of ACME Solar Holdings Limited. Specifically, it covers the INR 1,072.00 crore term loan facility for the 250 MW renewable energy capacity located in Rajasthan. The loan is provided by a consortium including Bank of America, Standard Chartered Bank, and India Infradebt Limited.

ICRA's decision to upgrade the rating is based on several key factors:

1. Strengthening of ACME Solar's credit profile
2. Robust revenue visibility
3. Healthy generation performance
4. Successful refinancing of previous loan at favorable terms

Strong Operational Profile

The project's strong operational profile is underpinned by a 25-year Power Purchase Agreement (PPA) with Solar Energy Corporation of India Limited (SECI). This long-term agreement ensures predictable cash flows, while SECI's track record of timely payments further enhances the project's credit profile.

About ACME Solar Holdings

ACME Solar Holdings is a leading integrated renewable energy player in India. The company boasts a diversified portfolio that includes:

• Solar energy
• Wind energy
• Energy storage solutions
• Flexi Dispatchable Renewable Energy (FDRE)
• Hybrid solutions

With an operational capacity of 2,890 MW, ACME Solar has established itself as a significant player in the renewable energy sector. The company's in-house Engineering, Procurement, and Construction (EPC) and Operations and Maintenance (O&M) divisions enable end-to-end development and maintenance of its plants. This integrated approach allows ACME Solar to deliver projects in a time and cost-effective manner while ensuring best-in-class operating performance.

Industry Impact

The rating upgrade for ACME Solar's project is a positive signal for the renewable energy sector in India. It demonstrates the growing confidence of financial institutions in the viability and sustainability of large-scale renewable energy projects. As India continues to push for increased adoption of clean energy, such upgrades may encourage further investments in the sector.

This development aligns with India's ambitious renewable energy targets and underscores the critical role that companies like ACME Solar play in the country's transition to a more sustainable energy future.