Renew Power set to file for $900 mn IPO

Move follows acquisition of assets from Ostro

MUMBAI: Renew Power Ventures Pvt. Ltd, the largest green energy company in India, will file draft share sale documents with the markets regulator for a $900 million initial public offering (IPO) before the end of the month, three people aware of the development said.

The move follows Renew’s acquisition of 1.1 gigawatts (GW) of renewable assets from Ostro Energy at an enterprise value of around ₹10,000 crore.

“Renew will file its draft red herring prospectus (DRHP) in the next two weeks. They plan to raise $800-900 million through the IPO. A significant portion of the IPO will see Renew’s investors divest part of their stakes. The company will also raise a significant amount of primary capital to be used for funding upcoming projects and debt repayment,” said one of the people cited above, requesting anonymity as he is not authorised to speak to media.

Renew has appointed nine investment banks to manage the IPO, said the second of the three people cited above.

“Investment banks Kotak Mahindra Capital, JM Financial, Goldman Sachs, Jpmorgan, Bank of America Merrill Lynch, IDFC Bank, Yes Securities, UBS and HSBC are working on the

transaction,” he said, also requesting anonymity.

Emails sent to Renew Power did not elicit any response. Bank of America Merrill Lynch, UBS, Yes Bank, HSBC, Goldman Sachs and Jpmorgan declined to comment. Emails sent to other investment banks were not answered.

Renew’s purchase of Ostro Energy cemented its position as India’s top renewable energy producer. The acquisition helped Renew Power’s capacity cross 5,600 MW. Over 65% of the combined capacity is already operational.

The renewable assets acquired from Ostro are spread across Andhra Pradesh, Karnataka, Telangana, Rajasthan, Madhya Pradesh and Gujarat. Last year, Renew bought 103MW of assets from KCT Renewables for around Rs1,000 crore.

The Ostro Energy acquisition was backed by a $247 million investment from Renew’s existing investor Canada Pension Plan Investment Board (CPPIB). In January, CPPIB invested $144 million in the company.

Renew Power was founded in 2011 by Sumant Sinha, a former chief operating officer at wind turbine maker Suzlon Energy Ltd.

Renew Power also counts investors such as Goldman Sachs, Asian Development Bank, Abu Dhabi Investment Authority, Global Environment Fund and Japan’s JERA Co. Inc. as its shareholders. In February 2017, JERA bought a 10% stake in Renew Power, valuing the company at $2 billion.

Renew Power is not the only renewable energy company planning to go public.

ACME Solar Holdings, with 874MW of operating renewable assets as of September 2017, filed the DRHP for its IPO in September to raise ₹2,200 crore.