Sumant Sinha, founder of Goldman Sachs-backed green energy producer ReNew Power Ventures Pvt. Ltd, has raised around $100 million in structured credit from Piramal Capital’s structured financing group (SFG) to raise his stake in the company ahead of a proposed initial public offering (IPO), two people aware of the development said. The fund raising was necessitated by Sinha’s low stake in the company, which could force private equity investors to lock in part of their shareholding as a promoter stake in ReNew’s proposed IPO. Under the Securities and Exchange Board of India’s (Sebi) issue of capital and disclosure requirements (ICDR) norms, at least 20% of the post-issue capital of the promoters has to be locked in mandatorily for three years.
“Sinha was in talks with various investors including Piramal and several overseas investors, especially from the Middle East to raise around $100 million in structured credit with the aim of using the capital to increase his stake in the company. Investors in ReNew want the least possible amount of their stake to be subject to the mandatory three-year lock-in under the ICDR norms. Piramal, eventually, was able to seal the transaction,” said one of the two people cited above, requesting anonymity.
Sumant Sinha’s stake in ReNew was in single digits, he added. Investors in ReNew Power want Sinha’s stake to be above 10% and proceeds from the fund-raising would most likely be used for a secondary purchase of shares from investors to achieve this aim, Mint reported in February, citing a person aware of the development. E-mails sent to Piramal and ReNew Power on Thursday evening did not elicit any response. Last month, The Economic Times reported that ReNew Power is planning an IPO of up to $600 million. Investors in ReNew such as Goldman Sachs, sovereign wealth fund Abu Dhabi Investment Authority, Asian Development Bank and Global Environment Fund could sell part of their stakes in the proposed issue, the newspaper reported. The IPO is likely within the next 12 months, Sinha told The Economic Times.
The plans to go public follow ReNew’s latest $200 million fund raising in February, when JERA Co. Inc. bought a 10% stake in the company, valuing it at $2 billion. Set up in 2015, JERA is an equal joint venture between Japan’s largest utility Tokyo Electric Power Co. (TEPCO) and Chubu Electric Power Co. Founded in 2011 by Sinha, a former chief operating officer at wind turbine maker Suzlon Energy Ltd, ReNew Power now has around 1.2GW of operational capacity across wind and solar projects. In October 2015, the company raised $265 million in equity capital from Abu Dhabi Investment Authority, Goldman Sachs and Global Environment Fund.
The round took the company’s total equity fund-raising to $655 million. Goldman has invested a total of $370 million in the company. The company also recently refinanced its debt through offshore dollar bonds. On 6 February, The Economic Times reported that ReNew Power raised $475 million by selling green bonds to overseas investors.