In order to raise funds for expansion, Goldman Sachs promoted renewable power generation company ReNew Power will list on NASDAQ through a business combination with RMG Acquisition Corporation II (RMG II). In a public statement, ReNew announced the execution of a definitive agreement with RMG II for a business combination that would result in ReNew becoming a publicly listed company on the NASDAQ. Post the listing, ReNew will be armed with more than enough capital to fully fund the company’s business plan projections for 2025 and beyond.

With an ambitious target of the Indian Government of building 450 GW of renewable capacity by 2030, renewable sector in the country is poised for enormous growth in the coming decade. With a transition in the renewable sector gathering pace, the companies present in the sector has pulled up the gears.

On February 24 2021, ReNew Power Private Limited (ReNew) announced its listing on NASDAQ through a merger with Special Purpose Acquisition Company (SPAC). Reverse listing through SPAC is a usual scenario for many US-based companies. However, with this announcement, many India-based companies will likely evaluate a similar mechanism to get themselves listed.   In this article, we have captured the key rationale for listing ReNew through SPAC, transaction structure, regulatory aspect of the deal and way ahead for the company.

The former COO of Suzlon Energy Limited, Sumant Sinha started ReNew in 2011. Today, ReNew is India’s leading pure-play renewable energy producer. It has over 100 operational utility-scale wind and solar energy projects spread across nine states in India. ReNew is presently the only company in the Indian renewable energy sector with over 5 GW of operational capacity.

In 2012, with funding of $60 million, ReNew commissioned 1st project with 25.2 MW in Gujarat. Later, it raised funds through equity as well as Green Bonds on several occasions and grew its capacity to 5.4 GW with additional 4.5 GW capacity to come in next couple of years.

RENEW-POWER-Listing-SPAC-Merger-1

Funding History of ReNew

Throughout its journey from 2012, it has raised funds several times through combination of equity allotment as well as through debt. At various stages, the founder in pursuit of expansion, diluted their equity to global investors and scaled up the company. Today, the founder owns only 6.9% equity stake in ReNew.

Snapshot of Equity & Debt Raised by the ReNew in past:

Financial YearFund TypeAmount(in $ million)
2012Equity60
2013Equity150
2014Equity110
2015Equity70
2016Equity196
2017Equity286
Bonds475
2018Equity247
2019USD Bonds435
2020Right Issue (Equity)300
USD Bonds840
2021USD Bonds325
Total3494

Its shareholders include:

Name of the ShareholderEquity % in the CompanyShareholder Since
Founders6.9%Inception
Goldman Sachs48.6%2011
CPPIB (Canada Pension Plan Investment Board)16.2%2018
ADIA (Abu Dhabi Investment Authority)15.9%2016
JERA (JERA Power RN B.V)9.1%2017
Global Environment Fund3.3%2014

Apart from equity shares, ReNew has also issued Compulsorily Convertible Preference Shares (CCPS) to some of its investors.

What is SPAC and brief description of RMG II

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