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Photo: iStock
Photo: iStock

ReNew Power explores overseas listing

  • IPO plan comes in the backdrop of Thailand’ PTT Group’ looking to acquire a stake from Goldman Sachs in ReNew Power

NEW DELHI : Goldman Sachs backed ReNew Power Ventures Pvt. Ltd is exploring an overseas listing, said two people aware of the development.

This initial public offering (IPO) plan comes in the backdrop of Thailand’ PTT Group looking to acquire a stake from Goldman Sachs Group in ReNew Power, one of India’s largest clean energy company, underpinning the rising interest of South East Asian oil and gas majors to back green ventures in India.

ReNew Power’ overseas listing plans comes after its earlier plan for IPO in India was put on hold. With investors such as Canada Pension Plan Investment Board (CPPIB), Japan’ JERA Co. Inc., Abu Dhabi Investment Authority (ADIA) and GEF SACEF India; ReNew Power’ IPO may also serve as a benchmark for others in India’ clean energy space.

“The potential PTT transaction may be a precursor to the ReNew’ IPO and a stepping stone to it," said a person cited above requesting anonymity.

“No firm decision has been taken," the person added.

With the biggest expense being the cost of capital in the green energy business, the financial heft of global oil majors such as PTT will benefit ReNew Power founded by Sumant Sinha. ReNew Power is also gearing to tap the offshore bond market to raise as much as $320 million, as it looks to refinance domestic debt of certain operating assets.

A ReNew Power spokesperson in an emailed response said, “As company policy we do not comment on market speculation."

An external spokesperson for Goldman Sachs in an emailed response declined comment.

Queries emailed to PTT Group on Friday remained unanswered.

ReNew Power is also raising funds through asset sales and plans to set up a 2 giga watt (GW) cell and module manufacturing facility in India. It also recently terminated the power purchase agreement (PPA) signed with the Solar Energy Corporation of India (SECI) for 265 MW wind project in Tamil Nadu.

“The IPO can be either listed in the US or the UK," said a second person cited above who also did not want to be named.

“Listing is a long-drawn process and it takes around 6-7 months to reach there. ReNew Power is looking at it. It will also provide an option to the existing shareholders to exit. The process is not very far advanced. Bankers are making pitches. This is a capital-intensive business and they are looking at all options to raise resources," said the first person cited above.

Oil giants are looking to diversify and invest in India’s emerging green economy as the conventional hydrocarbon space undergoes technological disruptions. PTT’ interest in ReNew Power comes after Malaysia’s state-run oil and gas company, Petroliam Nasional Bhd or Petronas that in April last year acquired Amplus Energy Solutions Pvt. Ltd, one of India’s largest rooftop solar power producers. Also, French energy giant Total SA has formed an equal joint venture with Adani Green Energy Limited (AGEL). Norway’s Statoil ASA, Royal Dutch Shell Plc and Russia’s Rosneft had also shown interest in investing in India’s clean energy sector.

“Globally ESG (Environmental, Social and Governance) investing is a fairly big deal. Given the scenario, perhaps the receptivity (of the IPO) will be better overseas," said the first person.

ReNew Power generates 5.4 GW of energy through solar and wind assets and has another 4.6 GW under various stages of development throughout the country. In 2018, it acquired 1.1 GW of wind and solar power assets from Ostro Energy—one of the biggest acquisitions in the Indian renewable energy space for an enterprise value of around $1.5 billion.

The deal activity in India’ clean energy space has picked up pace after getting impacted due to the coronavirus pandemic that originated in Wuhan. Recently the single-largest foreign clean energy investment announcement in India was made by Japan’s ORIX Corp. for $980 million in Greenko for a 17% stake.

Other potential deals reported by Mint include Acme Solar looking to sell 4.84 GW of solar projects; Petroliam Nasional Bhd or Petronas looking to acquire around 10% stake in Tata Power Renewable Energy Ltd, in addition to investing in Tata Power’ renewable energy InvIT and Avaada Energy mandating Bank of America (BofA) for selling stake. Also, O2 Power and Ayana Renewable Power have emerged as the front-runners to acquire Azure Power’ 305 MW solar assets and CPPIB, Actis Llp and Brookfield Asset Management Inc. are looking to buy Japan’s SoftBank Group Corp’s stake in SB Energy Holding.

There has been rapid pace of clean energy capacity addition by India. Clean energy projects now account for more than a fifth of India’s installed power generation capacity. India now has 34.6 GW of solar power and 38GW of wind power and seeks to produce 100 GW from solar projects and 60GW from wind power plants by March 2022. The country is seeking additional clean energy investment of around $80 billion till 2022, growing more than threefold to $250 billion during 2023-30.

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