ReNew Energy Global, one of India’s leading renewable energy firms, is set to be taken private in a landmark $2.82 billion deal. According to filings submitted to the U.S. Securities and Exchange Commission (SEC), a consortium of major investors, including the Canada Pension Plan Investment Board (CPPIB), UAE-based Masdar, ReNew Chairman Sumant Sinha, and a unit of the Abu Dhabi Investment Authority, has made the offer to acquire the company at $7.07 per share.
The offer values ReNew Energy at a premium of 11.5% over its closing price of $6.34 on Nasdaq on December 10. Following the news, ReNew’s shares rose sharply by 17.7%, closing at $7.46 on December 11, which is 5.5% above the offer price.
Details of the Offer
The $2.82 billion valuation is based on ReNew’s outstanding 398.61 million diluted shares as of August 2024. The consortium, which collectively holds 64% of voting rights in the company, aims to provide shareholders with “immediate liquidity not available in public markets.”
ReNew Energy, India’s second-largest renewable energy producer after Adani Green, operates 10.3 gigawatts of solar, wind, hydro, and hybrid energy projects across the country. Despite its strong portfolio, ReNew’s stock had lost nearly 18% of its value in 2024 before the offer was announced, reflecting prolonged weakness in the company’s equity valuations.
Implications of the Deal
If approved, the privatization of ReNew Energy would result in its delisting from Nasdaq. While this move could reduce financial disclosures and restrict access to U.S. public equity markets, it is expected to significantly lower compliance and regulatory costs. This cost reduction could support ReNew’s ambitious expansion plans in India’s fast-growing renewable energy sector.
CreditSights, a Fitch Group unit, commented that the deal could unlock new funding opportunities for ReNew, particularly through Masdar, a UAE state-owned entity. “The introduction of a reputed UAE shareholder could open up more funding channels in the UAE and the Middle East,” the report noted.
The offer also marks a potential exit for Japan’s JERA, which owned 11.7% of ReNew’s Class A shares as of July. Meanwhile, Goldman Sachs, an early investor in ReNew, had already exited its stake after the company went public in 2021.
Strategic Shift
Masdar stated that the proposal aligns with its broader strategy to provide capital investments that support India’s energy transition efforts. By going private, ReNew may gain greater flexibility to implement its strategic objectives without the scrutiny of public markets.
The deal underscores the growing investor interest in India’s clean energy space, as the country works toward ambitious renewable energy goals to combat climate change.
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