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Goldman Sachs-backed ReNew Power plans IPO

07 April, 2017

ReNew Power Ventures Pvt. Ltd, India’s largest renewable energy company, is gearing up for an initial public offering that could see largest shareholder Goldman Sachs trim its stake.

The IPO could be launched within 12 months, The Economic Times reported, citing ReNew chairman Sumant Sinha. The report also said, citing people aware of the plan it didn’t name, that the share sale could raise as much as $600 million (Rs 3,865 crore).

In a statement to VCCircle, the company said that the report “speculates the amount to be raised from the potential IPO” and that the company “has not progressed towards filing” for any public share sale.

The report also said that the company might raise $200 million ahead of the IPO for expansion. Besides, it said that HSBC Securities and Capital Markets (India), Kotak Mahindra Capital Co and Bank of America Merrill Lynch are among the banks looking to manage the planned share sale that could include a fresh issue of shares.

Apart from Goldman Sachs, other investors such as Abu Dhabi Investment Authority (ADIA), Asian Development Bank and Global Environment Fund may also pare their holdings, the report said.

The development comes a couple of months after the company raised $200 million from Japan’s JERA Co, a joint venture between Tokyo Electric Co. and Chubu Electric Co, that valued the Gurgaon-based based firm at $2 billion.

Including the funding from JERA, ReNew has secured $850 million in equity since its inception six years ago. In October 2015, the company had raised $265 million in a round with the ADIA alone putting in $200 million.

Goldman Sachs had first invested in ReNew in 2011 and took part in the subsequent investment rounds in 2013 and 2014. It is now the lead investor in ReNew with total investment of $370 million while Global Environment Fund has invested $35 million in the renewable energy producer.

ReNew chairman and CEO Sinha is a former deal-maker who also worked as COO of Suzlon Energy before venturing out. The company has more than 1,600 MW of commissioned clean energy assets. It has a development pipeline of more than 1 GW solar, wind and solar rooftop projects. It operates in Gujarat, Haryana, Madhya Pradesh, Rajasthan, Maharashtra, Karnataka, Telangana and Andhra Pradesh.

ReNew agreed to acquire two wind power projects in Andhra Pradesh and Gujarat last year, marking its first inorganic expansion move.

Greener pastures
India’s renewable energy sector – especially wind and solar power – has attracted a clutch of financial and strategic investors, attracted by opportunities after the government set a target to achieve 100 GW of solar and 60 GW of wind power generation capacity by 2022.

A joint venture of Japan’s SoftBank Group Corp, Taiwanese firm Foxconn and India’s Bharti Enterprises plans to invest $20 billion in the Indian renewable energy sector.

In June 2016, Tata Power Co Ltd agreed to buy the renewable energy business of Welspun Group for Rs 9,249 crore ($1.4 billion) including debt. The deal is the largest in India’s renewable energy sector thus far.

In 2015, Italian renewable energy firm Enel Green Power SpA acquired a majority stake in BLP Energy, a subsidiary of Bharat Light & Power Pvt. Ltd, a clean energy company floated by a former CEO of GE India, for about $33.5 million.

*This article has been updated to modify ReNew Power’s comment.

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Goldman Sachs-backed ReNew Power plans IPO

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