ReNew Power's $325 mn offshore bond issuance oversubscribed six times

Company executives said this was also the cheapest bond offering by a renewable firm. The bonds were initially priced at 5.875%. When the rate was reduced to 5.375%, investors continued to book

Goldman Sachs-promoted ReNew Power raised $325 million via offshore bond sale. The dollar bond offer was subscribed 6x with the total offer book at $2 billion.

This is the first successful bond issuance by an Indian renewable company since the Covid-induced economic slowdown. In June, SoftBank Energy, an Indian clean energy unit of Japan-based SoftBank, withdrew its $600-million bond issuance due to investors’ concerns on the price-cost ratio of its solar projects. Company executives said this was also the cheapest bond offering by any renewable company. The bonds when issued were priced at 5.87 per cent. However, the rate was reduced to 5.37 per cent, but the investors continued to book, said the executive.

“We were monitoring the market when it got shut due to Covid. We were ready with portfolio of assets for refinancing. Lot of investors came in from the US and there was an overwhelming demand from Asian markets — almost 56 per cent of the total book, including US-based investors with presence in Asia, such as PIMCO and Blackrock. Demand came in from more than 130 accounts,” Kailash Vaswani, president (corporate finance) of ReNew Power, told Business Standard.  

This is ReNew’s second bond offering in this calendar year. It raised $450 million via dollar bonds in January when it was oversubscribed three times. D Muthukumaran, chief financial officer of ReNew Power, said: “We like to have diversified sources of capital. Currently, we have about $2 billion from the bond market, including the latest bond, out of the $4 billion of total debt. The objective is to free up limits for under construction assets. When the assets are in steady stage, refinance them in the dollar bond market.” ReNew Power has a total installed capacity of 5.4 Gw of solar and wind power. It also has 4.6 Gw of renewable power capacity under construction.

Apart from Goldman Sachs, ReNew is backed by equity investors such as Tokyo-based JERA, Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, and Global Environment Fund. In July, the company had announced its entry into solar manufacturing. The company has indicated it will invest close to Rs 1,500-2,000 crore for its manufacturing unit of 2 Gw of solar cells and modules. Business Standard had earlier reported the company’s expansion into the power transmission sector and to have a complete energy supply chain.