Canada Pension Plan Investment Board, Abu Dhabi Investment Authority and Abu Dhabi Future Energy Company PJSC, which operates as Masdar, have proposed to take Indian renewable energy company ReNew Energy Global Plc private.
The three investors along with ReNew founder and chairman Sumant Sinha have offered to delist the company from the Nasdaq stock exchange, according to a filing with the US Securities and Exchange Commission.
The announcement comes barely a fortnight after VCCircle first reported that CPPIB, the single-biggest shareholder of ReNew, was considering taking the company private in the US and list it on the Indian stock exchanges.
According to the SEC filing, the CPPIB-led group is offering ReNew shareholders $7.07 per share, which is a premium of 11.5% over the stock’s last closing price and a 22.8% premium to the 30-day volume-weighted average price. ReNew had a market capitalisation of a little over $2.37 billion at Monday’s closing price.
CPPIB, ADIA and Sinha currently own 64% of the fully diluted public shares of the company while Masdar, the UAE government-owned renewable energy company, is joining as an new investor in the consortium.
“This proposal reflects Masdar’s positive assessment of the strength of India’s renewable sector and would provide capital investment to support the country’s energy transition,” it said in a statement.
ReNew is one of the biggest green energy companies in India and competes with the likes of Adani Green Energy, Tata Power’s green energy arm and Greenko, which counts ADIA and Singapore’s GIC as investors.
ReNew became the first Indian renewable energy company to list on the Nasdaq in August 2021 after completing a merger with the US-based blank cheque company RMG Acquisition Corp II at an enterprise value of $8 billion.
A blank cheque company, also known as a special purpose acquisition company (SPAC), is a publicly traded vehicle that does not have an established business at the time of listing but subsequently merges with an unlisted company to take the latter public via an indirect listing route.
CPPIB, the North American nation’s biggest pension fund, became the majority owner of ReNew in March last year by acquiring shares worth $268.6 million from Goldman Sachs. ReNew’s other shareholders include Japan’s JERA, Rubric Capital, and funds managed by BlackRock and Morgan Stanley.
ReNew’s share price has remained weak over the past three years owing to financial headwinds. But in the recent past, the company has witnessed a turnaround of sorts. Last month, ReNew reported a 31% rise in its net profit to Rs 493.9 crore for the July-September quarter, up from Rs 377.1 crore a year earlier. Total income rose to Rs 2,988.7 crore from Rs 2,863.2 crore. However, its net profit for the first half of the current financial year came in at Rs 533.3 crore as against Rs 675.4 crore a year earlier. Its total income for this period increased to Rs 5,471.3 crore from Rs 5,329.1 crore.
As of the end of September, the company reported having a portfolio of 15.6GW as against 13.8GW as of September last year. Its commissioned capacity rose 21% on a year-on-year basis to top 10GW as of the end of September this year. It expects to complete construction of between 1.9GW and 2.4GW in the current financial year.