ACME Solar Stock Jumps on Storage Push and Re-Rating Hopes

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Shares of ACME Solar surged 5.89% to ₹289 after investors cheered its transition from a pure-play solar IPP to a storage-backed renewable powerhouse, a new PPA with Tata Power, and a CRISIL rating upgrade to AA-.

By S JHA

Mumbai, October 23, 2025 — ACME Solar Holdings Ltd’s stock rallied 5.89% on Tuesday to close at ₹289, buoyed by renewed investor optimism over its strong growth trajectory and improving financial profile.

Investor Compass noted that the “rerating cycle is just getting started” as ACME transitions from a pure solar independent power producer (IPP) to a storage-backed Firm and Dispatchable Renewable Energy (FDRE) leader.

The company currently operates 2.9 GW of capacity with another 4 GW under construction, backed by a fully tied-up capital expenditure of ₹12,000–₹14,000 crore. The operating portfolio generates around ₹2,000 crore in steady-state EBITDA, translating to roughly ₹700 crore per GW, offering high visibility on cash flows.

ACME is also deepening its presence in energy storage — the key profitability driver for renewable firms. It has signed India’s first 550 MWh standalone Battery Energy Storage System (BESS) power purchase agreement (PPA) with NHPC and ordered 3.1 GWh of battery capacity, targeting commissioning of 2.5 GWh by FY26. Management expects IRRs of 16–18%, with merchant tariffs of ₹8–9/unit offering additional upside.

A major catalyst is the ongoing refinancing drive, which has already reduced borrowing costs. About 250 MW of projects were refinanced at 8.5%, cutting 95 basis points from prior rates. The company’s weighted average cost of debt now trends below 8.75%, aided by CRISIL’s recent rating upgrade to ‘AA-/Stable’—its highest ever. Lower finance costs directly enhance margins and valuation multiples.

Technological innovation adds another layer of strength. ACME has successfully validated FDRE pilots integrating solar and storage, is experimenting with perovskite solar technology (50–100 kW scale), and has introduced new plant designs that reduce land use by 15–20%.

Diversification remains a strategic priority, with projects expanding beyond Rajasthan into Madhya Pradesh, Andhra Pradesh, and Karnataka. Early commissioning of battery systems allows merchant revenue realization even before COD, ensuring de-risked execution.

Separately, the company signed a 25-year PPA with Tata Power to supply 50 MW of firm and dispatchable renewable energy at a tariff of ₹4.43 per kWh (~$0.05/kWh), further strengthening its order book and revenue visibility.

According to market analysts, ACME’s blend of scale, storage, refinancing, and technology positions it as a frontrunner in India’s clean-energy transition. As the country accelerates its move away from coal, battery-backed renewable projects like ACME’s could emerge as long-term compounders.

(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)