PE investors set for partial exits in ReNew Power's India IPO
Indian renewable energy producer ReNew Power has filed for a domestic IPO that will enable Goldman Sachs, Abu Dhabi Investment Authority (ADIA), and Global Environment Fund (GEF) to make partial exits.
The company plans to sell INR26 billion ($386 million) worth of new shares – the size and pricing of that part of the offering have yet to be determined – and approximately 94.4 million shares held by existing investors, according to a prospectus. Goldman, which invested $250 million in ReNew in 2011 and went on to participate in three subsequent rounds, currently holds a 48.62% interest in the company and plans to offload 79.8 million of its 184.7 million shares.
GEF got its first exposure through a $20 million contribution to a $140 million round in 2014 that also featured the Asian Development Bank (ADB) and Goldman. It owns 3.2% of ReNew and will sell 2.48 million of its 12.4 million shares. ADIA owns 60.5 million shares – or a 15.92% equity interest – and intends to exit 12.1 million in the IPO. It invested $200 million in 2015, leading a $265 million round in which Goldman and GEF also participated.
Canada Pension Plan Investment Board (CPPIB) is the other significant outside investor in ReNew with a 16.22% stake. It committed $144 million to the company in January, taking out ADB’s 6.3% holding in the process. The pension plan will not sell any shares in the offering.
ReNew claims to be India’s largest independent power producer (IPP) in the wind and solar space, with capacity of 5,854 megawatts – 3,942 MW of wind and 1,913 MW of solar – installed and under development. This is more than double the total of second-placed Tata Power Renewable Energy. ReNew bolstered its operations in April with the acquisition of Actis Capital-owned Ostro Energy.
The company’s operational capacity was 3,921 MW as of March and its major customers are central and state government agencies that sign long-term power purchasing agreements. Revenue for the 12 months ended March 2017 came to INR21 billion, up from INR15.5 billion the previous year. Over the same period, net profit increased from INR509.4 million to INR1.4 billion.
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