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ReNew mops Rs 2,100 crore through rights issue to expand capacity

Mumbai: Clean-energy company ReNew Power has raised $300 million (Rs 2,100 crore) in equity funding from existing investors Goldman Sachs, CPPIB and Abu Dhabi Investment Authority through a rights issue.

The exercise, however, did not see participation from Japanese investor JERA and the Global Environment Fund, both existing investors of ReNew Power. “Each of the large shareholders has infused $100 million each. The funds will help us add capacity,” ReNew Power chairman Sumant Sinha said.

The funds were raised through a zero coupon, compulsorily convertible instrument that will convert at a time of a liquidity event or after three years, whichever is earlier.

With this round, ReNew would have crossed a billion dollars in equity raise from its institutional investors in various tranches. The last tranche a year ago from CPPIB was at $2.6 billion. Analysts expect a $3 billion equity valuation now. ET in its edition dated May 31 had reported ReNew’s fund raising plans after its proposed bond sale was deferred.

Founded by Sinha, a former chief operating officer at wind turbine maker Suzlon Energy, ReNew Power has more than 4,300 MW of operational capacity and under-construction clean energy capacity of 3,200 MW across 16 states in India.

“We will continue to fund our pipeline with the internal cashflows and also with the new round of capital,” said Sinha. “For the existing portfolio, we are open to monetising either in part or full. It is a global practice but we are yet to firm up the granular details.”

During FY18, the company completed acquisition of approx. 1.5 GW of operational assets, leading to significant growth in revenue. Operating income at the consolidated level increased 88 per cent in FY18 to Rs 2,462 crore from Rs 1,307 crore in FY17, and is expected to nearly double in FY19. Its operating profit before tax is Rs 1,991.6 crore. The company has achieved a turnover of Rs 2,704 crore in H1 FY19 (higher than the revenue for the entire FY18), which is 55 per cent of the projected turnover for FY19.