ReNew revives IPO plans, eyes overseas listing in London, NYSE | Economic Times

Mumbai: Buoyed by the rising global interest in Environmental, Social and Governance (ESG) investing, Goldman Sachs Group backed ReNew Power Ventures has revived its IPO plans, said multiple people aware of the discussion.However, unlike the failed attempt to list the company in 2018, the company is keen on an overseas listing in either London or the New York Stock Exchange. Several global investment banks have already made detailed presentation to ReNew’s board and shareholders, pitching for a $3.5 billion to $4 billion valuation and a few public market investors too have been approached for feedback. The company has already begun work to become an offshore company like several of its peers like Greenko as a precursor to tapping the global markets. These IPO discussions are expected to gather momentum in the coming weeks once the advance negotiations with Thailand’s PTT Group, for a minority stake in the company, fructifies into a firm agreement. Sources close to the company say, after the period of lull, PTT, also the country’s biggest conglomerate, has re-engaged with ReNew to put almost $600 million for a significant minority stake of around 20 per cent, through a primary infusion of capital into the company to fund under construction projects, as well as secondary purchase of shares from some of the existing investors like Goldman Sachs, Global Environment Fund and possibly even founder chairman Sumant Sinha himself. ET was the first to report in its July 29th edition that Goldman Sachs and ReNew have been in dialogue with Thailand’s state owned energy giant for an $500 million investment.“There have been some differences in valuation expectations but talks with PTT have. They are expected to approach their board for a approval in the next 2-3 weeks. The final investment number and quantum of stake dilution are getting finalised.” said an official aware of the ongoing discussions, on condition of anonymity. “PTT’s investment, if approved, would be like a pre-IPO deal and set a valuation benchmark.”Diversified PTT Group with business interests in oil and gas exploration, petrochemicals, fuel and coffee retailing pivoted toward renewables after clean energy arm Global Power Synergy Public Company (GPSPC) spent $4.2 billion last year buying electricity producer Glow Energy Plc. FALL BACK PLAN?Two sources also add, that in recent weeks, some of the shareholders of ReNew have also approached Gautam Adani to explore a potential acquisition by Adani Green Energy. Adani is believed to be evaluating the opportunity. However, these discussions are preliminary in nature and there is no guarantee that it will lead to any transaction, the sources warned. No non-disclosure agreements have been signed yet, nor has it been raised at Renew’s board.Adani is targeting an installed renewable generation capacity of 25 GW by 2025 at an investment of $15 billion. In April Total of France invested about Rs 3,707 crore for a 50 per cent partnership with Adani Green Energy for a joint venture.“Adani typically goes for value or distress buys. ReNew is a full value trade. However, they do offer a large platform of scale,” said an official familiar with these discussions.A ReNew Spokesperson declined to comment on the proposed IPO plans or about PTT’s buy-in, calling it “speculation.” He “categorically denied any discussions” with Adani, saying, “the information is incorrect.” Goldman Sachs declined comment. Adani, PTT did not respond to ET’s questionnaire till press time Sunday.DELEVERAGING BALANCE SHEETEver since, the company was forced to shelve its IPO plans in mid-2018 at a $4 billion valuation, shareholders like Goldman Sachs, the largest with a 48 per cent stake, has been looking to lower its holding and unlock value through several methods of monetisation. The $1.66 billion acquisition of Ostro the same year, had already leveraged the balance sheet significantly.The Wall Street bank had backed first-generation entrepreneur Sumant Sinha to create a green energy platform in 2011 with a $200 million commitment. Since then, several other high-profile investors have come on board. CPPIB and Abu Dhabi’s sovereign wealth fund Abu Dhabi Investment Authority each own 16 per cent; Japan’s gas and utilities major JERA has an 8 per cent shareholding while other small financial investors such as Global Environmental Fund control 3 per cent. Sinha and his senior employees own the rest.ReNew, last week, has also launched a $320 million offshore bond to refinance some of its local project debt after having tapped the dollar bond market for a $450 million raise in January of this year. The company has also been looking to raise funds through asset sales and have announced plans to set up a 2 giga watt (GW) cell and module manufacturing facility in India.It also recently terminated the power purchase agreement (PPA) signed with the Solar Energy Corporation of India (SECI) for 265 MW wind project in Tamil Nadu.This is not the first time financial and strategic investors have evaluated an investment in ReNew, one of the leading clean energy companies in the country with close to 10GW of contracted capacity (commissioned and under construction). Earlier in the year, Goldman had engaged with Brookfield to work out a deal but talks floundered over price, said the sources cited above. Subsequently, CPPIB was approached for buying an additional 24 per cent stake. Those discussions too did not progress then as the company had found it strategically difficult to raise primary capital by setting a new valuation benchmark, said people in the know. CPPIB made its investment at $2.5-$2.8 billion valuation. Investors have also explored potential merger with existing listed platforms in India and overseas.