The conditions are right for start-ups looking to list abroad through the SPAC route but the government is dragging its feet on the issue
ReNew Power Private Ltd achieved a market capitalisation of nearly $4.5 billion (about Rs 33,500 crore), the biggest listing for an Indian entity through SPAC route
This is a landmark transaction as it represents the biggest overseas listing of an Indian company via the SPAC (special purposed acquisition company) route, which has been a smash hit on Wall Street over a major part of the last 18 months. The proceeds would be used to support ReNewâ€™s growth strategy, including the buildout of its contracted, utility-scale renewable power generation capacity, as well as to reduce debt.
Renew Power Services is a wholly-owned subsidiary of Renew Power Pvt Ltd. This is in line with the declared L&T focus of divesting non-core assets and improving shareholder value, L&T said in a statement.
On August 6, Moneycontrol had reported that the US Securities Exchange Commission or SEC (the equivalent of Indiaâ€™s market regulator SEBI) had given the crucial regulatory nod to the mega $8 billion SPAC transaction between ReNew Power and RMG Acquisition Corporation II. The shareholder vote is pending for the deal post which the combined firm will start trading on the Nasdaq.
US SEC gives nod to mega $8 billion ReNew Power SPAC deal; firmâ€™s shares may soon begin trading on Nasdaq
The transaction would further strenghten ReNewâ€™s position in solar and wind energy generation for the Indian market, by funding medium-term growth opportunities. The proceeds would be used to support ReNewâ€™s growth strategy, including the buildout of its contracted, utility-scale renewable power generation capacity, as well as to reduce debt.
Race for Mytrahâ€™s renewable energy assets: Adani Group, ReNew Power, KKR, CPPIB, Ayana among early suitors
Mytrah Energyâ€™s assets are spread across 17 wind farms and 21 ground monitored solar farms in 9 states. According to its website, the firm has the largest wind data bank in India, being the only independent power producer having a pan India presence of over 240 wind masts
Smaller companies are finding it difficult to meet project commitments as suppliers back out and customers donâ€™t sign power purchase agreements
Assuming a family of five, back-of-the-envelope calculations indicate that ReNew Power would provide vaccination to around 7,500 people across its 110 locations in India.
The US listing will help ReNew Power tap rising global demand for green energy investments
The $8 billion transaction is the first major overseas listing of an Indian company via the special purposed acquisition company route, which is immensely popular on Wall Street. Famed Sillicon Valley Investor Chamath Palihapitiya, who has led the SPAC wave in the US market, is one of the investors backing the deal.
The partnership will also implement solar off-grid projects, studies, and assessments. Joint efforts will be promoted through annual events to showcase contributions to Indias strategic vision on renewable energy.
Thai state-owned energy giant PTT is willing to invest $500 million in Indias ReNew Power at a valuation of around $2.2 billion.
The wind farms will reportedly be sold as a single entity, which is expected to be 100 percent owned by Ayana Renewable
According to Fitch Ratings, BB ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time.
ReNew Power will hold a 51 percent equity under the partnership, while the balance will be held by GS E&C.
CPPIB is in talks to buy out the entire stake held by Goldman Sachs, while Brookfield is eyeing the stake held by another existing investor ADIA (Abu Dhabi Investment Authority), a source told Moneycontrol.
Goldman Sachs, Abu Dhabi Investment Authority and Canada Pension Plan Investment Board (CPPIB) have subscribed to the issue, with each of the shareholders infusing $100 million.
ReNew has a solar portfolio of nearly 3 GW across India, including both commissioned and projects under development.
The five-year non-call two notes were offered at a yield of 6.67 per cent per annum, a company statement said.
The wind farm will have a total installed capacity of 300MW, making it the largest full turnkey EPC (engineering, procurement and construction) project by GE Renewable Energy in India, a company statement said.
This strategic investment helps the company consolidate its position further in the fast-growing, clean energy sector in India, ReNew Power said in a statement.
Since Government‘s emphasis on defence preparedness has been the Central theme, we would have been happy if some incentives by way of tax exemption or deferment on loan payments would have been announced for domestic industry.
The proceeds from this ADB investment will be utilized by the company to develop and expand capacities in Andhra Pradesh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh and Telangana.
The Rewa tender has many unique features and addresses two of the most critical risks for solar project developers in India Ã¢â‚¬â€œ off-take and grid availability. If the tender results are as competitive as expected, it would provide a template for other states for solar power procurement, Vinay Rustagi says.
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