ReNew Power SPAC
Rebecca Cattlin August 20, 2021 12:15 AM
ReNew Power, one of India’s leading renewable energy companies, is going public soon via a SPAC deal with RMG Acquisition Corp II. Find out everything you need to know about the company and its $8 billion valuation.
ReNew Power SPAC: When will ReNew Power go public?
ReNew Power is expected to list on the Nasdaq on August 24 via a SPAC deal with RMG Acquisition Corp II. ReNew will list under the symbols 'RNW', while RMG II's stock will be de-listed.
The $1.2 billion equity proceeds from the merger include a private investment in public equity (PIPE) deal of $855 million, which involves private placements of the common stocks in ReNew Power and $345 million in cash held by RMG. The net proceeds of $610 million will help ReNew Power fund future projects and help it pay down debt.
The PIPE investors include BlackRock, BNP Paribas Energy Transition Fund, Chamath Palihapitiya, Sylebra Capital, TT International Asset Management Ltd, TT Environmental Solutions Fund and Zimmer Partners.
Previously, in 2018, the company floated an initial public offering (IPO) to list on the Indian Stock Exchange but the issuance was later called off.
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How much is ReNew Power worth?
ReNew Power is predicted to have a total enterprise value of $8 billion following its SPAC merger, this makes it one of the largest SPAC offerings.
What does ReNew Power do?
ReNew Power is a renewable energy company that focuses primarily on solar and wind power; it has a total installed capacity of 5.4 gigawatts (GW), and a total asset base of over 10 GW.
It was founded in 2011 by Sumant Sinha and received institutional backing from Goldman Sachs soon after. It became the first Indian company to achieve 1 GW capacity.
How does ReNew Power make money?
ReNew Power makes money through the sale of power to state electricity boards and large industrial firms in India. It has more than 110 projects across India, where it develops, builds and operates utility-scale energy production. The company also builds manufacturing capacity for other energy firms.
Is ReNew Power profitable?
ReNew Power is expected to finish the year with an EBITDA of $578 million. According to reports in May 2021, ReNew had estimates of revenue reaching $699 million in FY2021, which would make it the largest 10th renewable energy company in the world by sales.
The company has estimated that by FY2025, it will hit an EBITDA of $1.68 billion, a growth rate of 28%.
What is ReNew Power's business strategy?
ReNew Power has what is known as a vertically-integrated business model, in that it controls a lot of the supply chain – including suppliers, distributers and sales – meaning it can set the value.
According to the company, this model along with its ‘predictable cash flows, supported by long-term power purchase agreements, make the business among the most profitable in the sector, not only in India, but worldwide.’
India’s per capita energy consumption is expected to increase in the next decade, and most of this power is going to come from renewable sources. ReNew is primed to take advantage of this by expanding its energy portfolio to look at a mix of solar, wind, as well as hydropower and hydrogen in the coming years. It also has 4.6 GW of renewable power capacity under construction. This is part of the aim to take ReNew’s capacity from 10,400 megawatts (MW) up to its target capacity of 18,000 MW by 2025. The company plans to enter into energy storage, power transmission and the distribution space as well.
In going public, ReNew will be looking to tap into the growing demand for investment into environmental, social and corporate governance (ESG) and renewable energies. The Indian government’s ambitious target of 450 GW of installed renewables capacity by 2030 – which represents an increase of five times the current levels – could be a huge opportunity for ReNew.
Who owns ReNew Power?
ReNew Power’s existing shareholders include Goldman Sachs, Canada Pension Plan Investment Board, Japan’s JERA Co. Inc., Abu Dhabi Investment Authority, GEF SACEF India and Sumant Sinha.
Existing investors will hold a 70% stake in ReNew Energy Global PLC, PIPE and SPAC investors will hold 20% and 10%, respectively.
Board of directors of ReNew Power
The individuals sitting on ReNew Power’s board of directors are:
- Sumant Sinha, Chairman and Managing Director
- Michael Specht Bruun, GS Wyvern Nominee Director
- Ram Charan, Independent Director
- Tantra Narayan Thakur, Independent Director
- Satoshi Yajima, JERA Power Nominee Director
- Anuj Girotra, CPPIB Nominee Director
- Ms. Vanitha Narayanan, Independent Director
- Projesh Banerjea, ADIA Nominee Director
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