ReNew To Go Private? Key Investors Make Offer

ReNew Energy Global, which got listed at the NASDAQ exchange in the US through the SPAC route back in 2021, could well go private next year, if its biggest investors, including founder Sumant Sinha have their way. A consortium with voting rights of 64% have offered to take the company private at $7.07 per share, leading to a huge spike in the share price of the firm at NASDAQ by 17% yesterday. When the consortium made its filing with the US Securities and Exchange Commission (SEC), the price of the firm was at $6.34%. At the Wednesday price of $7.46, the firm’s valuation has spiked 5.5% over the offer price of the consortium to $2.78 billion.

Second largest green developer in India 

For ReNew, which is the second largest green energy developer in India after Adani with a strong pipeline of upcoming projects, the decision to list at NASDAQ has been a mixed one, in terms of the valuation the firm has received at the exchange from investors, besides the many compliance costs associated with the listing. One would have to say that the firm has not really benefitted as it expected to, considering the many efforts it has made to lift valuations, including a stock buyback offer within 2 years of the listing.

The consortium offering the buyback includes Canada Pension Plan Investment Board, UAE-based Masdar, ReNew Chairman Sumant Sinha and a unit of the Abu Dhabi Investment Authority.

Warming of the Indian market 

Indian markets, which have warmed up to green energy listings in 2023-24, have delivered far higher valuations to developers, a case in point being the recent listing of Acme Solar Holdings, a much more smaller (7 GW) and less profitable developer than ReNew (10.3GW), which has a current market cap touching $2 billion. On current trends, ReNew Energy could easily seek a valuation of over $5 billion or higher, going by the valuation of NTPC Green Energy, currently over $14 billion on operating assets of less than 4 GW, versus the almost 11 GW ReNew has.

Chances are that if it does manage to go private, ReNew would probably seek an India listing at some stage. Lower costs, and higher valuation, but with the risk of finding it tougher to raise money from the US market, something it has done extremely well so far.

ReNew In the Indian Market

ReNew has now spread its presence ranging from renewable project development and solar module manufacturing. The firm was one of the winners of the Indian government’s Production Linked Incentives (PLI). It has also started its trial runs of solar cell production from its Dholera plant in Gujarat. In its latest investors presentation, it talked about a 900 MW order book of modules and cells.

The company recently told its investors that it was able to produce 2.6 GW of solar modules. It said project-wise, it has a portfolio of 16.2 GW. This comprises wind projects, solar projects and hydro projects.