Indian green energy firms eye stock market listings - sources (updated)

Orient Green Power

27/04/2018 16:56

(Repeats earlier story, no change to text)
    * Adani Green and ReNew Power to make market debut in weeks
    * Three others firms to follow suit later this year
    * IPOs attractive for firms with sufficient scale - bankers

    By Promit Mukherjee and Sudarshan Varadhan
    MUMBAI, April 27 (Reuters) - Two Indian renewable energy
firms are set to unveil stock market listing plans in the coming
weeks, giving investors a new way to gain exposure to the sector
at a time when India is pushing to make renewable power a bigger
part of its energy mix. 
    Adani Green Energy, a subsidiary of Indian trading firm
Adani Enterprises Ltd  ADEL.NS , is expected to be spun out and
listed on Indian stock exchanges within the next two weeks, said
two bankers familiar with the company's plans.
    Separately, ReNew Power, India's biggest company in terms of
renewable energy assets, is expected to file papers with
regulators for an initial public offering as early as next week,
the two bankers said.
    The two companies will be the first new pure-play renewable
energy firms to list in India, since wind energy firm Orient
Green Power's  ORIN.NS  listing eight years ago.  
    The sector has in recent years drawn significant interest
from large global sovereign funds and private equity firms
including Warbug Pincus, Abu Dhabi Investment Authority,
Singapore's GIC and Macquarie Capital. 
    The listings will help investors gauge market interest and
set a bar on valuations for rivals that may also explore
listings, say bankers.
    Adding over 100 gigawatts of renewable capacity will require
"significant capital and private markets alone can't fund all of
it," said Alok Verma, Executive Director of Investment Banking
at Kotak.
    India will need over $125 billion to fund its plan to add
175 gigawatts of renewable power to its grid by 2022. The clean
energy industry is looking beyond domestic banks, which account
for most of the industry's financing.
    To put the financing requirement in context, researcher
Mercom estimates corporate funding for the global solar industry
was $12.8 billion last year.  urn:newsml:reuters.com:*:nL3N1PC4GB
    Investors are scrambling to raise money and capture market
share in India's expanding green energy sector amid tight
deadlines.
    Another reason for firms seeking IPOs "may be also the
promised exit to the investors," said Sunil Jain, chief
executive of Hero Future Energies Ltd, referring to private
equity investors who typically look to sell stakes after a
certain number of years.
    
    LIMITED INTEREST
    "Adani Enterprises plans to offload around a quarter of its
stake in Adani Green," one of the bankers said, adding this will
be followed by Goldman Sachs-backed ReNew's IPO.
    With operating assets of 3.6 GW and 2 GW under construction,
ReNew is seen as "big enough to raise substantial capital" from
the market, another banker said.
    The company, which counts Abu Dhabi Investment Authority and
other big firms as investors, could raise up to $900 million.
 urn:newsml:reuters.com:*:nL3N1RT3G7
    Adani Enterprises and ReNew Power did not respond to emails
seeking comment.
    The companies are expected to be followed by several other
companies aiming to raise funds. Sembcorp India, a unit of
Singapore's Sembcorp Industries  SCIL.SI , ACME Solar and Mytrah
Energy India also have plans for listing.
    The three companies did not reply to emails seeking comment.
    While the Renew and Adani Green listings are expected to
garner strong valuations given the size and scale of the assets
they control, bankers warn listings by smaller rivals may fail
to attract strong interest.
    "We're not going to see six to nine successful IPOs in the
next two years. We might see one or two successful ones," said
Rahul Goswami, Managing Director, Greenstone Energy Advisors,
noting small new players have undermined economics of some
assets by bidding aggressively at very low tariffs.
    In India, firms seeking to win rights to set-up renewable
energy assets enter a bidding process with the company offering
to supply power at the lowest possible tariff winning the
auction process.

 (Reporting by Promit Mukherjee in Mumbai and Sudarshan Varadhan
in New Delhi
Editing by Euan Rocha and Toby Chopra)
 ((promit.mukherjee@thomsonreuters.com; +91-22-6180-7516;
Reuters Messaging:
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