ACME Solar Hold.

Large renewable energy player well positioned to capitalize on strong industry tailwinds in its IPP business.

End-to-end value chain capabilities and an integrated approach to developing renewable power projects by its in-house project development, EPC and O&M teams.

Expansive portfolio diversified across different renewable energy technologies.

Long-term stable cash flows based on contracts with central and state government entities.

Access to diversified sources of funding.

Design and value engineering leading to higher efficiencies.

Committed Promoters and senior management team.

The company may not be able to grow its portfolio of renewable energy power projects as the company relies on highly competitive renewable energy power project auctions. Further, its future growth is significantly dependent on successfully executing its Under Construction Awarded Projects and Under Construction Contracted Projects. In the event, the company is not successful in executing its future projects, its business and results of operations may be adversely impacted.

The company is dependent on its Power Purchase Agreements ("PPA") to sell power and generate its revenue from operations. Further, the terms of its PPAs may expose it to certain risks that may affect its future results of operations and cash flows.

Its business is dependent on the company`s top 10 off-takers, which contributed 95.42%, 89.42%, 89.97%, 87.48% and 81.11% of its revenue from operations during the three months ended June 30, 2024 and June 30, 2023 and for Fiscal 2024, 2023 and 2022, respectively. The loss of any of these off-takers could have an adverse effect on its business, financial condition, results of operations and cash flows.

The company procured 84.48%, 77.15%, 79.37%, 69.84% and 69.95% of its total purchases during the three months ended June 30, 2024 and June 30, 2023 and in Fiscal 2024, 2023 and 2022, respectively from ACME Cleantech, its top supplier. Further, the company does not have definitive supply agreements with its vendors for the supply of components and any interruptions in supply could adversely affect its business, financial condition, results of operations and cash flows.

The company is dependent on its relationship with one of its Promoters, ACME Cleantech and any adverse developments in such relationship may adversely affect its business and reputation.

The Company, ACME Cleantech and ACME Solar Energy have received certain office orders from the Directorate of Enforcement in connection with investigations under the Foreign Exchange Management Act, 1999, as amended. MKU Holdings has also received a questionnaire from the Directorate of Enforcement and subsequently, notices from the Assistant Commissioner of Police, Economic Offences Wing, Gurugram and the Office of the Assistant Commissioner of Police, Delhi, Economic Offences Wing in connection with an ongoing investigation being undertaken under the provisions of Prevention of Money Laundering Act, 2002 against IREO group of companies.

While the company has extensive experience in commissioning solar power projects, the company does not have experience in commissioning wind, hybrid FDRE power projects and closed loop pump storage projects. Without prior experience in commissioning such projects the company could encounter delays, and unexpected costs, undermining project viability and profitability.

Restrictions on renewable energy equipment imports may increase its costs of procurement of such equipment.

The company Joint Statutory Auditors have included certain emphasis of matters in their examination report on the Restated Consolidated Financial Information. There can be no assurance that any similar emphasis of matters will not form part of its financial statements for the future fiscal periods, which could subject it to additional liabilities due to which its reputation and financial condition may be adversely affected.

The company incurred loss for the year of Rs.31.74 million in Fiscal 2023. Its cannot assure you that going forward the company will continue to generate profits which may impact its business and results of operations.

There are outstanding legal proceedings involving the Company, Subsidiaries, and Promoters. Further, the company has in the past made applications for compounding of certain non-compliances under Foreign Exchange Management Act and condonation of delay under Companies Act.

Any constraints in the availability of the electricity grid, including its inability to obtain access to transmission lines in a timely and cost-efficient manner, could adversely affect its business, results of operations and cash flows.

A certain portion of the land on which the company renewable power projects are or will be located may requires certain approvals and permits in order for it to use such land for developing such projects. In the event the company is unable to obtain such approvals and permits, its business, results of operations, cash flows and financial condition could be adversely affected.

There is a limited pool of potential purchasers of utility scale quantities of electricity and the possibility that counterparties to its PPAs may not fulfill their obligations could expose it and the company power projects to risks which could have an adverse effect on its business, results of operations and cash flows.

Majority of its Operational Projects are located in the states of Andhra Pradesh, Rajasthan and Telangana which contributed 79.81%, and 56.23%, of our revenue from operations in the three months ended June 30, 2024 and June 30, 2023, respectively and 63.22%, 54.73% and 55.54% of its revenue from operations during Fiscal 2024, 2023 and 2022, respectively. Any change in governmental policies or occurrence of natural disasters in any of these states may impact its impact on the company business, results of operations and cash flows.

The company incur substantial expenditure and may requires additional capital and financing in the future for its projects. The company operations could be adversely affected if its unable to obtain such capital and financing in a timely manner.

The company may face significant risks in relation to upgrading and improving its renewable energy projects that could result in reduced power generation and increased expenses in the maintenance of its renewable energy projects.

The company is exposed to risks associated with time and cost overruns, delays or under- estimations of its costs of construction, which may affect the economic viability of the company renewable energy projects.

The company in-house engineering, procurement and construction ("EPC") operations expose it to certain risks such as price fluctuation in the cost of equipment and components to develop its renewable energy projects.

The company may not be able to identify or correct defects or irregularities in title to the properties which its own, lease or intend to acquire in connection with the development of the company solar power projects as land title in India can be uncertain. Additionally, certain land on which its solar power projects are located or will be located may be subject to third party rights or onerous conditions which may adversely affect its use.

The company operates in a capital intensive industry and its debt to equity ratio was 4.80 and net debt to equity ratio was 3.89 as of June 30, 2024. If the company is not able to source funding for its future renewable energy projects in a timely manner, its business, results of operations and financial condition may be adversely impacted.

The company development of renewable power projects may be restrained by its inability to identify or acquire suitable land sites. If the company is unable to identify suitable land on commercially acceptable terms, its ability to develop new renewable energy projects on a timely basis or at all might be affected, which could result in the imposition of penalties and/or reductions in tariffs which could adversely affect its business, financial condition and results of operations.

The company has pledged a significant portion of its cash and cash equivalents and bank balances with the company lenders.

The reduction, modification or elimination of government and economic incentives may reduce the economic benefits of its existing renewable energy projects and the company opportunities to develop or acquire new renewable energy projects.

Changes in technology may render its current technologies obsolete or requires the company to make substantial capital investments. Failures to respond to current and future technological changes in an effective and timely manner may adversely affect its business and results of operations.

The delay between making significant upfront investments in its power projects and receiving revenue could adversely affect the company liquidity, business and results of operations.

The Company has paid the statutory dues to the Government and provident fund for all full-time employees for the Fiscals 2024, 2023 and 2022, however, there have been delays in payment of statutory dues by the Company and its Subsidiaries in the three months ended June 30, 2024 and June 30, 2023 and during Fiscal 2024, 2023 and 2022. Inability to make timely payment of its statutory dues could result it into paying interest on the delay in payment of statutory dues which could adversely affect its business, the company results of operations and financial condition.

Bids for pumped storage power projects are limited. The company cannot assure you that its will be able to win bids to increase its pump storage projects which could impact the company`s business, revenue from operations and cash flows.

Its business is subject to environmental conditions, seasonal fluctuations and natural calamities that may have an adverse impact on its business, financial condition and results of operations.

The company faces competition, including from both traditional and renewable energy companies, and any failures to respond to market changes in the renewable energy industry could adversely affect its business, financial condition and results of operations.

Undertaking acquisitions or divestments may subject it to additional risks that may adversely affect its business, financial condition, results of operations and prospects.

The company has certain contingent liabilities that have been disclosed in its financial statements, which if they materialize, may adversely affect its results of operations, cash flows and financial condition.

The company has in the past entered into a number of related party transactions and may continue to enter into related party transactions in the future on an arm`s length basis, and there can be no assurance that the company could not have achieved more favourable terms if such transactions had not been entered into with related parties.

The Unaudited Pro Forma Consolidated Financial Information is presented for illustrative purposes only and may not be indicative of its future performance.

Exchange rate fluctuations may adversely affect its business, results of operations and cash flows.

The company is required to comply with certain restrictive covenants under its financing agreements. Any noncompliance may lead to, amongst others, accelerated repayment schedule and suspension of further drawdowns, which may adversely affect its business, results of operations, financial condition and cash flows.

Certain of its Subsidiaries have availed certain unsecured loans from the company Promoter, ACME Cleantech, that may be recalled by ACME Cleantech at any time and the relevant Subsidiaries may not have adequate funds to make timely payments or at all.

Its ability to access capital at attractive costs depends on the company credit ratings. Non-availability of credit ratings or a poor rating may restrict its access to capital and thereby adversely affect its business, financial conditions, cash flows and results of operations.

The company long term financing agreements provide for payment of interest at variable rates and any increases in interest rates may adversely affect its results of operations.

Its may not be able to adequately protect the company intellectual property rights which could harm its competitiveness.

The company is required to obtain certain approvals, licenses, registrations and permissions for operating its business, and the failures to obtain, maintain or renew them could adversely affect its business, results of operations and financial condition.

The performance of its solar power projects is affected by varying radiation levels and it can only be estimated based on historical average Global Horizontal Irradiance ("GHI") data and soiling losses, which may fluctuate during a period and lead to the unreliability of such predictions.

The use of battery energy storage system ("BESS") technology is subject to certain risks, which may adversely affect its business and operations.

The company does not own majority of the land on which are projects are located and will be located and its Registered and Corporate Office is located on premises not owned by it and sub-leased to the company by one of its Promoter, ACME Cleantech. If these leases or sub-leases are terminated or not renewed on terms acceptable to the company, it could adversely affect its business, results of operations, and cash flows.

The company depends on the performance of management and other personnel, and if the company is unable to attract, retain, and motivate these and other employees, its business, results of operations and financial condition could be harmed.

Any disruption to the steady and regular supply of workforce for its operations, including due to strikes, work stoppages or increased wage demands by its workforce or any other kind of disputes with the company workforce or its inability to control the composition and cost of the company workforce could adversely affect its business, cash flows and results of operations.

An inability to maintain adequate insurance cover in connection with its business may adversely affect the company operations and profitability.

If the company is subject to any fraud, theft, or embezzlement by its employees, it could adversely affect the company reputation, results of operations and financial condition.

Its funding requirements and proposed deployment of the Net Proceeds are based on management estimates and may be subject to change based on various factors, some of which are beyond its control. While the Company will receive proceeds from the Fresh Issue, it will not receive any proceeds from the Offer for Sale.

Any variation in the utilization of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders` approval.

Its ability for bonus issuance from the relevant reserves in the future will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

Its Promoters will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.

One of its Promoters, ACME Cleantech, has pledged the equity shares of the Company to a lender for availing external financing facilities on which pledge has been temporarily released for lock-in purposes and such equity shares shall be re-pledged with the lender.

The majority of its Directors have limited experience in being directors of any other listed entities.

Industry information included in this Red Herring Prospectus has been derived from an industry report exclusively commissioned and paid for by it for such purpose. Further, this Red Herring Prospectus contains information from technical reports by T�V S�D South Asia Private Limited appointed by the Company.

Its Promoters ACME Cleantech and MKU Holdings, certain of their Subsidiaries and Group Companies are engaged, or are authorized by their constitutional documents to engage, in business activities which are similar to those undertaken by the Company and Subsidiaries. Further, its Promoter Manoj Kumar Upadhyay may have interest in business similar to its, which may result in conflicts of interest with the company.

Certain of its Directors, Promoters, members of the company Senior Management and Key Managerial Personnel have interests in the Company in addition to their remuneration and reimbursement of expenses.

The average cost of acquisition of Equity Shares by its Promoter Selling Shareholder, ACME Cleantech is Rs. 28.31 which may be less than the Offer Price.

The company has refinanced some of the debts of certain of its Project SPVs through green bonds, wherein the non-convertible debentures were subscribed by India Cleantech Energy, whose green bonds were listed on the Singapore Stock Exchange.

The company has not declared any dividends in the last three Fiscals and in the three months ended June 30, 2024 and the company cannot assure you that its will be able to payment of dividends on its Equity Shares in the future.

The company has in this Red Herring Prospectus included certain non-GAAP financial measures and Key Performance Indicators ("KPIs") that may vary from any standard methodology that is applicable across its industry. The company relies on certain assumptions and estimates to calculate such measures, therefore such measures may not be comparable with financial, operational or industry-related statistical information of similar nomenclature computed and presented by other similar companies.

Significant differences exist between Indian Accounting Standards ("Ind AS") used to prepare its Restated Consolidated Financial Information, such as the United States Generally Accepted Accounting Principles (U.S. GAAP) and the International Financial Reporting Standards ("IFRS"), which may affect investors` assessment of the Company`s financial condition.