Mytrah eyes green bond option; Fund raising getting harder in India: CMD

Piramal Capital-backed firm targets up to one Gw capacity addition every year

Piramal Capital-backed Mytrah Energy plans to raise around Rs 130 billion, including Rs 26 billion in green bonds, over the next two years. Though the company is looking to raise funds only in the domestic market, it feels fund raising in India has become difficult.

In an interview with Business Standard, Vikram Kailas, co-founder, vice-chairman and managing director, Mytrah Energy, said that with 16 out of 20 PSU banks in Prompt Corrective Action of the Reserve Bank of India, there are restrictions on bank lending.

He said Rs 2.80 a unit (kilowatt an hour) is the sustainable tariff for renewable energy. Kailas said his company was comfortable with the tariffs for its current projects both in wind and solar segments.

The company has a 3 Gw portfolio of wind and solar assets spread across more than 40 sites in nine states. The company wants to add 0.7-1 Gw every year over the next few years. It has raised debt in the past from Goldman Sachs, Dutch pension fund APG, other financial institutions and banks.

The company is, however, not looking at the listing option in India. “We will continue to be privately held,” said Kailas. One of the largest Indian renewable power producers with a 3.92 GW capacity, Hyderabad-based Mytrah Energy Ltd counts ReNew Power among its close competitors.

The company is yet to chart out details of green bond offering. He, however, said yields have gone up in the domestic market and hence fund raising was becoming tight especially when banks were stuck with bad loans.

Green bonds have become one of the most prevalent mediums in the debt capital market as an alternative to traditional bank financing, said Yes Bank in a report released on Monday. “Some $2.4 trillion has been raised in the last two years alone,” said the report. Yes Bank was the first institution to issue Green Infra bonds in February 2015 and has raised in excess of $165 million till date.

India is among the list of top 10 countries in the green bond market by total issuance size. Though green bond market is dominated by Euro and US dollar-denominated Swedish Krona, Canadian dollar, Australian dollar and Chinese renmimbi accounted for at least $1 billion of green bonds in the first quarter, according to Moody’s Investor Service. Besides Indian rupee, Malaysian ringgit, Turkish new lira, South African rand, Norwegian krone, Hong Kong dollar and Chilean Unidad de Fomento, accounted for $518 million of total green bonds in the January-March quarter when $30.4 billion of green bonds were brought to the market, an 11.5 per cent year-over-year decline.