Virescent Renewable Energy Trust (VRET) raised Rs 10 billion in non-convertible debentures (NCD) its debut issuance , which was split into three tranches of three, five, and seven years. This is the first time a renewable energy InvIT has issued securities in India. As per a company statement, the funds will mostly be used to refinance existing debt and support future acquisitions. The NCD structure benefits from a thorough covenant package, securing CRISIL and India Ratings’ highest domestic rating of AAA. Barclays Bank PLC, Trust Investment Advisors and ICICI Bank acted as arrangers on the issuance.
L&T Finance has also agreed to provide VRET with an extra Rs 10 billion in long-term funding. This ensures VRET’s immediate near-term acquisition pipeline is debt-free. VRET has also received a Rs 1.5 billion working capital facility from Tata Capital to help it improve its liquidity and achieve its credit rating standards. Funding at the InvIT level involves a cash pooling mechanism as well as cross-collateralization of security, resulting in a cleaner capital structure that benefits all lenders, including both NCD investors and long-term financiers.
In September 2021, VRET was established as a private listed InvIT with a $62 million equity raise led by Alberta Investment Management Corporation from a consortium of global and local investors. Headquartered in Mumbai, Virescent has an installed capacity of 394 MWp across 9 operational projects with an additional ~55 MWp of assets in pipeline.