IPO Route: Renewable energy companies go public to raise capital

Renewable energy companies go public to raise capital

The Indian renewable energy sector is witnessing unprecedented growth, creating new opportunities for small, medium and large organisations. Apart fr­om the expansion of renewable energy ca­pacity through solar, wind and other so­urces, there is a focus on developing ca­pa­bilities in energy storage, green hydrogen and offshore wind for inclusive grow­th. Further, global supply disruptions and less­ons from overdependence on imported equipment have prompted a massive ma­nufacturing drive in the country, with supportive policy interventions. Domestic manufacturing will continue to gain mo­mentum owing to the ongoing green en­ergy transition and efforts to improve the national energy security. Going forward, these factors will lower the entry barriers for private players, developers and manufacturers alike, and give them an opportunity to ex­pand their portfolios.

Renewable energy tariffs have dropped amidst intense competition, thereby lowering profits for developers. Thus, manufacturers must produce high efficiency but cost-competitive products to stay in the game. They need to seek funding not only to expand their operations but also to en­sure their profitability. Given the current post-Co­vid financial market conditions and the global turmoil in oil and gas and commo­dity pricing, many Indian renewable en­er­gy companies prefer to opt for a safer rou­te to raise capital. Thus, many tra­ditional pla­yers are choosing to go pu­blic and raise capital through an initial pu­blic offering (IPO), instead of newer instruments to raise finance.

A look at four Indian renewable energy players that have opted for the IPO route in recent months for raising capital…

Inox Green Energy

Inox Green Energy Services is engaged in the business of providing long-term operations and maintenance services (O&M) for wind farm projects, specifically for wind turbine generators (WTGs) and common infrastructure facilities that support the evacuation of power from such WTGs. The company is a subsidiary of Inox Wind Limited and a part of the INOXGFL Group, which primarily operates in the specialty chemicals and rene­wable energy sectors. It also has connections with the wider Inox Gr­oup, which started operations in 1923. Its authorised share capital is Rs 5 billion and its paid-up capital is Rs 4.35 billion.

Recently, Inox Green Energy Services fil­ed new preliminary papers with the Se­cu­­rities and Exchange Board of India (SEBI) to raise Rs 7.4 billion thro­ugh an IPO. Ac­c­or­­ding to the draft red herring prospectus (DRHP) submitted in June 2022, the IPO consists of an offer for sale of equity sto­cks totalling Rs 3.7 billion by promoter In­ox Wind and a fresh issuance of equity shares worth Rs 3.7 billion. The co­mpany had already filed the DRHP with SEBI for its anticipated IPO in February 2022, but in late April 2022, the proposed IPO offer documents were withdrawn without explanation.

ReNew Power

ReNew Power, a subsidiary of ReNew En­ergy Global Plc, is one of the leading re­newable energy independent power producers (IPPs) in India and globally. As of June 2022, the company’s total capacity stands at 12.8 GW (including capacity al­ready won in competitive bids). In order to meet the energy requirements of comme­r­cial and industrial customers while also reducing India’s carbon footprint, the co­m­pany has set up utility-scale wind and solar energy projects.

In February 2021, ReNew Power and RMG Acquisition Corporation II announced the execution of a definitive agreement for a business combination that would result in ReNew becoming a publicly listed company on Nasdaq. In August 2021, after re­demptions and transaction fees, ReNew received $610 million in net proceeds fr­om this transaction, which included funds from RMG II’s previous trust account and a private placement in public equity (PIPE). The PIPE is supported by institutio­nal investors such as BlackRock, BNP Pa­ribas Energy Transition Fund, venture ca­pi­talist Chamath Palihapitiya, Sylebra Capi­tal, TT International Asset Manage­ment Limited, TT Environmental Solutions Fund, and Zimmer Partners, among others. The re­venues will be used to accelerate Re­New’s expansion, fund operations and pay off debts. Further, RMG II be­ca­me a wh­olly owned subsidiary of ReNew Ener­gy Global plc and ReNew’s Class A ordinary shares and warrants commenced trading on Nasdaq as a result of the special purpose acquisition company route.

Waaree Energies

Established in 1989, Waaree Energies is the flagship company of the Waaree Group based in Mumbai, India. It has one of the highest solar PV module production capacities in India, with 2 GW of capacity at its Gujarat operations in Surat and Um­bergaon. Waaree Energies is a leading pr­o­vider of EPC services, project de­velo­p­ment, rooftop solutions and solar water pumps in India, as well as an IPP. Wa­aree has a nationwide presence in ov­er 380 lo­cations and an international presence in 20 countries.

In June 2022, Waaree Energies received approval from market regulator SEBI to launch its IPO. The issue size will be Rs 15 billion. In September 2021, the company filed draft papers with SEBI. The IPO comprises a fresh issue of shares worth Rs 13.5 billion, and an offer for sale of up to 4,007,500 equity shares by the company’s promoters and existing shareholders. The company may consider a further iss­ue of equity shares including a preferential issue aggregating up to Rs 2.7 billion. If such a placement is completed, the fre­sh issue size will be reduced.

Vikram Solar

Vikram Solar Limited (formerly Vikram Solar Private Limited) is one of India’s largest module manufacturers in terms of operational capacity, producing solar PV modules. It is also an integrated solar energy solutions provider offering EPC as well as O&M services.

In March 2022, Vikram Solar filed its DRHP papers for its IPO with SEBI. The IPO consists of a fresh issue of up to Rs 15 billion and an offer for sale of up to 5 million equity shares by existing sharehol­ders. The company has proposed to utili­se the net proceeds of the IPO towar­ds funding capital expenditure of around Rs 12.38 billion for setting up of a 2,000 MW integrated solar cell and solar module ma­nufacturing facility in Tamil Nadu, and for general corporate purposes.

As of De­c­ember 31, 2021, the company had an or­der book (including framework agreements/letters of intent) of Rs 48.7 billion, of which Rs 16.21 billion comprises pro­jec­ts/operations that are already under ex­ecution and Rs 32.48 billion comprise projects that are yet to be executed. The co­m­pany clocked revenues of Rs 16.1 billion in financial year 2021.


While the renewable energy market is gr­owing, the risks for developers and manufacturers have not diminished. For developers, unpaid dues from discoms, land and transmission constraints, regulatory flux and price sensitivity continue to be major issues. For manufacturers, on the ot­her hand, there is still massive competition from foreign players and prices are quite high in the midst of supply gaps for major raw materials like steel, copper, gla­ss and aluminium. These issues will take so­me time to be resolved even as the go­vern­ment is trying to improve the situation.

While the financing situation for renewables has surely improved tremendously, in­vestors remain cautious owing to these few uncertainties in both global and do­mestic markets. For a credible player like ReNew Power with strong investor backing and a multi-GW portfolio expanding at a rapid pace, the financing risks are fewer and the company is now successfully listed on Na­sdaq. The other three companies – Inox, Vikram Solar and Waaree – with IPOs to be is­sued soon, have years of experience in the renewable energy space and are amongst the leading manufacturers in the country. Thus, for these three companies, the risks are fewer, especially with the present thrust on manufacturing and expected growth in this space.

Overall, India requires huge capital to meet its renewable energy targets and the success of these IPOs will provide an en­couraging avenue for other companies to raise finance. 

Note: Vikram Solar has received approval from SEBI to raise funds through IPO. The company received its observation letter on August 10, 2022.

By Khushboo Goyal and Anusshka Duggal