Renew to raise up to $400 million through corporate bonds

Diamond II Ltd, a unit of Renew Energy, has hired Barclays, Deutsche Bank, HSBC, JP Morgan, Standard Chartered Bank and BNP Paribas as joint global coordinators, said Kedar Upadhyay, group chief financial officer of Renew.

The renewable energy firm will now hold roadshows for the bonds, its sale backed by corporate guarantees.

The bonds have been certified by the Climate Bond Initiative, a non-profit organization promoting investment in climate change solutions, and are in accordance with the International Capital Market Association’s (ICMA) Green Bond Principles, a set of guidelines which ensures that the bonds are used for environmentally sustainable projects.

A guaranteed bond provides an additional assurance that in the event of an issuer’s default due to factors such as insolvency, a third party will meet the interest and principal payments. This arrangement enables the issuing company to pay lower interest rates than non-guaranteed bonds. During FY23, ReNew paid over $1 billion to its offshore bondholders. In the last financial year, the Nasdaq-listed firm refinanced $525 million of bonds in domestic markets ahead of March 2024 maturity, as well as repaid $300 million from its internal cash reserves.

ReNew has a clean energy portfolio of 13.4 gigawatts (GW) on a gross basis as of September 30, 2022. The fundraising plan coincides with ReNew’s plans to broaden its operations within the renewable energy sector. This February, it underwent a rebranding from ReNew Power to ReNew, reflecting its evolution from a pure-play renewables firm into an all-inclusive provider of clean energy, green hydrogen, energy storage and decarbonization solutions to the carbon markets .

Last month, the Canada Pension Plan Investment Board (CPPIB) agreed to buy Goldman Sachs’ stake for $268.6 million, making the Canadian pension fund the majority shareholder in ReNew. The transaction was at a per share price of $4.8. ReNew also plans to sell minority stakes in its commercial and industrial projects for approximately $300 million as part of its capital recycling strategy.