The deal, expected to conclude in the next three-four months, will be funded from internal accrual and fresh fund that the company intends to raise in the proposed IPO. The company that has Rs 2,500 crore cash in the balance sheet is raising another Rs 2,700 crore from the IPO.
“ReNew Power is in advance negotiations with the promoters of these five companies that include Indian Energy (Mauritius), SREI Equipment Finance, and ES Energy among others,” said a person familiar with the development.
ReNew Power spokesperson declined to comment as the company has filed DRHP. The spokesperson of these companies couldn’t be reached. The company has filed draft herring prospectus for the proposed IPO with the Securities and Exchange Board of India on Tuesday.
Besides the fresh issue of about Rs 2,700 crore, other investors such as Goldman Sachs, Abu Dhabi Investment Authority (ADIA) and Global Environment Fund (GEF) are also selling part of their holdings in the proposed IPO. The combined size (fresh issue by the company and secondary sale by the existing shareholders) of the issue will be between Rs 6,000 crore and Rs 7,000 crore.
ReNew Power has a combined capacity of 5.6 GW that includes 3.7 GW of operational capacity and another 1.9 GW is in advanced stages of implementation. After the completion of acquisitions of five companies, the operational capacity of the company will increase to 4.3 GW.
Of the 560 MW, the company is acquiring about 480 MW in wind energy and balance would be in the solar space. “The company has already signed the initial documents. The due diligence has already started. The company is expecting to complete the transaction by September 2018 barring few exceptions,” said the person.
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