India's ReNew Power to list on Nasdaq, aims to raise $1 billion

ReNew Power, India’s leading renewable energy independent power producer (IPP), will raise about $1 billion from its public listing on the Nasdaq tomorrow. It will be the first Indian top renewable company to go global and get listed in the US market.

ReNew will combine its business with RMG Acquisition Corporation II, a blank cheque company, which raised $345 million in its December 14, 2020 initial public offer (IPO) in the US. The combined new entity - ReNew Energy Global PLC - will have a market capitalisation of over $4 billion.

"Of the $1 billion we are raising, primary gross proceeds will be $700 million and the remaining will be from secondary sale of existing shareholders. About 25-30 new global investors are likely to onboard through listing," Sumant Sinha, Chairman and Managing Director of ReNew Power told Business Today.

Currently Goldman Sachs, CPP Investments, Abu Dhabi Investment Authority, GEF SACEF and JERA are the major investors in ReNew Power. Post listing, Goldman Sachs' shareholding will go down from 49% to about 33%. Shareholding of CPP Investments and Abu Dhabi Investment Authority, which were holding about 17% each, will dilute to about 13%. The new institutional investors onboarding will own about 20% of the company.

Proceeds from the IPO will be used to fund its expansion plans, a target of 18.5 GW of wind and solar operational capacity by 2025. Currently ReNew has about 6 GW of operational capacity and 4.5 GW under construction.

"Most of the 4.5 MW (megawatt) under construction will be ready in the next 18 months, assume by March 31st of 2023. Beyond that, we can execute another 8 GW (gigawatt) over the next 2-3 years. We are also going to get good cash flows from the operational projects. With the cash we are having and that we are going to generate plus proceeds from going public will help us to set up an operational capacity of 18.5 GW by 2025," said Sumant Sinha.

He said the company is likely to have an EBITDA (earnings before interest, taxes, depreciation, and amortization) of $800 million in the current financial year, on the back of about 7 GW of commissioned capacity. Since India's power market is opening up, ReNew is also looking at opportunities in battery storage, grid management solutions, solar panels and module manufacturing.

He said though the company will be listed in the US, its focus business market will continue to be India. The listing will help Renew become a professionally run organisation with independent directors from across the globe, instead of a shareholder driven company.