India’s boom adds spark to US green energy buyout

ReNew Energy Global

07/01/2025 12:00

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
    By Shritama Bose
       MUMBAI, Jan 7 (Reuters Breakingviews) - ReNew Energy
Global’s  RNW.O  bid to go private may yet heat up. A consortium
that owns 64% in the New York-traded Indian clean-energy
producer is offering an 11% premium to the undisturbed stock
price to buy the rest of the shares it doesn't hold. While there
is no word yet on a subsequent listing in Mumbai, the prospect
of one will be front of mind for current investors.
    India’s second-largest green energy firm by capacity, ReNew
listed in 2021 on Nasdaq via a special purpose acquisition
company, paving the way for longtime backer Goldman Sachs  GS.N 
to exit two years later. The share price performance has
underwhelmed. ReNew is trading at a 32% discount to the price at
which it went public: founder and CEO Sumant Sinha grumbled in
an interview last year about public markets valuing renewable
groups poorly. 
    Sinha has joined forces with fellow investors Canada Pension
Plan Investment Board and a unit of Abu Dhabi Investment
Authority, along with the United Arab Emirates-based Masdar,
which currently doesn't own ReNew stock, to make an offer of
$7.07 per share, implying a market capitalisation of $2.82
billion, per Breakingviews calculations. Adding on net debt,
ReNew’s enterprise is worth nearly $10 billion, or 11 times its
forecast adjusted EBITDA for the year ending March 2025. 
    If Sinha follows through on his stated plan to consider
moving the listing, Renew could probably secure a much higher
valuation in India. Applying larger peer Adani Green Energy’s
 ADNA.NS  multiple of 21 times EBITDA for the year to March 2025
to ReNew would value its debt and equity at more than $18
billion. 
    Prospective sellers will find that comparison hard to shake
off. An India listing makes sense because the country is home to
a chunk of ReNew’s operations. Meanwhile, renewable power
suppliers, once unloved locally, are sharing the spoils of rich
domestic equity valuations. State-backed NTPC Green Energy
 NTPG.NS  enjoyed one of the most successful debuts in 2024: the
stock jumped 14% on its first day of trade in November.
    ReNew’s U.S. shareholders may yet press the consortium for a
bigger payout. To succeed, the offer will need the support of
75% of voting shareholders by size of holdings and also a
majority of shareholders by number. That leaves some room for a
bumpy transition. 

    Follow @ShritamaBose on X

    CONTEXT NEWS
    A consortium of shareholders in Nasdaq-listed clean power
producer ReNew Energy Global made a non-binding offer on Dec. 10
to take the company private. 
    The group is comprised of Canada Pension Plan Investment
Board, Abu Dhabi Investment Authority, and ReNew Chair Sumant
Sinha, who control a combined 64% of shareholder votes in the
company, along with the United Arab Emirates-based Masdar, which
joins the consortium as a new investor.  
    The offer price of $7.07 for each share represents an 11.5%
premium to the last traded price and values ReNew at $2.82
billion, according to Reuters calculations.

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Graphic: ReNew is among India's top green power producers    https://reut.rs/3C5qIDn
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 (Editing by Una Galani and Aditya Srivastav)
 ((For previous columns by the author, Reuters customers can
click on  BOSE/ 
shritama.bose@thomsonreuters.com))