Key Financings: Major debt and equity moves

October 15, 2024

Over the past year, notable fundraising efforts have emerged in the form of commercial loans and green bond issuances, primarily focused on renewables. This surge in investment, supported by a favourable policy framework and multilateral finance agreements, has facilitated large-scale projects. Substantial loan arrangements have bolstered this growth. Additionally, mergers and acquisitions (M&As) have strengthened market consolidation. Together, these strategies have established India as a priority market for global investors and a key player in the global renewable energy landscape.

Power Line explores the key financing developments over the past 12 months, tracking capital flows and examining how investors are exploring risks in India’s power sector.

Major loan agreements

India’s power sector has secured significant loan agreements to support critical energy projects and drive the shift towards renewable energy. These loans, spanning both domestic and international sources, have been crucial for funding renewable energy projects.

  • In July 2024, Adani Green Energy Limited (AGEL) secured $400 million in financing from a consortium of international lenders for its solar power projects, totalling 750 MW, under construction in Rajasthan and Gujarat. The debt facility has been provided by lenders such as Cooperative Rabobank U.A., DBS Bank, Intesa Sanpaolo S.p.A., MUFG Bank and Sumitomo Mitsui Banking Corporation.
  • In June 2024, NTPC Renewable Energy Limited (NTPC REL) signed an unsecured green term loan agreement for Rs 35 billion with the Punjab National Bank. The loan has a 15-year tenor with annual repayment, and will be used for capital expenditure on any ongoing/new projects of NTPC REL.
  • In June 2024, REC Limited availed a green loan of JPY 31.96 billion to finance eligible green projects in India. This green facility is a first-of-its-kind collaboration between an Indian government entity and Deutsche Bank AG, GIFT City branch. This sets a benchmark in the Indian public sector landscape for similar green financing transactions, highlighting a growing commitment towards sustainable financing.
  • In June 2024, Power Finance Corporation Limited and REC Limited signed an agreement with Chenab Valley Power Project Private Limited for a term loan of Rs 18.69 billion each. As per the agreement, the loan will be used to develop and construct the greenfield Kiru hydroelectric project (4×156 MW) on the Chenab river in Kishtwar, Jammu & Kashmir.
  • In May 2024, ReNew signed an MoU with Société Générale to support the financing and development of ReNew’s various strategic energy transition projects both in India and globally. Under the MoU, which references up to $1 billion of support over the next three years, primarily including debt financing and advisory solutions, both parties will leverage their respective expertise to strengthen the collaboration on utility-scale energy projects including solar, wind, complex renewables, green hydrogen, energy storage and solar module manufacturing.
  • In April 2024, Avaada Energy secured a loan of Rs 11.9 billion from the State Bank of India for a new solar venture in Gujarat. The financing, structured as a 20-year project loan, will support the development of a 400 MWp utility-scale solar PV power project in  Surendranagar district, Gujarat.
  • In April 2024, REC Limited availed a green loan of JPY 60.536 billion to finance eligible green projects in India. The loan is 80 per cent guaranteed by the Italian export credit agency SACE, under their innovative Push Strategy programme. The green loan involved participation from banks across Asia, the US and Europe, namely, Crédit Agricole Corporate and Investment Bank (CIB), Bank of America, Citibank, KfW IPEX-Bank and Sumitomo Mitsui Banking Corporation as mandated lead arrangers. Crédit Agricole CIB will act as the export credit agency coordinator, green loan coordinator, documentation bank and facility agent.
  • In March 2024, BluPine Energy secured financing worth Rs 12.6 billion from Standard Chartered Bank and Tata Capital Limited for its upcoming wind project in Gujarat. The project has a capacity of 198 MW and is projected to generate approximately 65 GWh of wind energy annually. The electricity generated from the plant will be supplied to GUVNL under a 25-year PPA from the scheduled commercial operation date.
  • In January 2024, Serentica Renewables Private Limited secured external commercial borrowings totalling Rs 35 billion for the company’s round-the-clock renewable energy project. The transaction involves collaboration with a consortium of six prominent banks, including international players Rabobank, MUFG Bank and Société Générale, alongside Indian lenders YES Bank, Export-Import Bank of India and India Infrastructure Finance Company.
  • In December 2023, REC Limited signed a Euro 200 million loan agreement with Germany’s KfW bank to enhance the distribution segment. This agreement marks REC’s sixth line of credit under the Indo-German Development Cooperation Project.
  • In November 2023, Radiance Renewables secured a green loan of approximately $90 million for a 150 MW AC commercial and industrial solar project, located in Maharashtra. For this, the company has already signed a power supply agreement with a global data centre player to deliver solar power to consumers’ data centres in the state for a period of 25 years. The project will be completed in two stages, the first of which will be 50 MW AC and is close to completion.

Multilateral finance deals

Multilateral finance deals have been crucial in advancing India’s power sector, with the Asian Development Bank (ADB) and World Bank being among the key contributors. ADB has supported several projects, including solar power expansions, infrastructure modernisation and climate-resilient systems installations, while the World Bank has focused on low-carbon energy development and renewable capacity growth.

  • In August 2024, Fourth Partner Energy Private Limited (FPEL) secured funding worth $275 million from the International Finance Corporation (IFC), ADB and the German Investment and Development Company (DEG). This investment is expected to fund FPEL’s business expansion including 3.5 GW of renewable energy assets by 2026. IFC has invested $125 million, ADB $100 million and DEG the remaining $50 million.
  • In July 2024, ADB approved $240.5 million in loans to finance rooftop solar systems in India, aiming to expand energy access using renewable energy. The financing will be made available to State Bank of India (SBI) and the National Bank for Agriculture and Rural Development (NABARD) for providing loans to developers and end-users throughout the country to install rooftop solar systems. ADB will provide SBI with $90.5 million from its Clean Technology Fund (CTF), while NABARD will receive $150 million, comprising $80 million from ADB’s ordinary capital resources and $70 million from the CTF.
  • In July 2024, ADB and the ENGIE group signed a long-term local currency loan agreement to construct and operate a 400 MW solar PV power plant in Surendranagar, Gujarat. ADB was the mandated lead arranger for the entire loan totalling Rs 14.6 billion, with ADB and the Asian Infrastructure Investment Bank (AIIB) providing Rs 7.3 billion each.
  • In May 2024, ADB approved a $148.5 million loan to help strengthen, modernise and climate-proof the distribution system to enhance the reliability, quality and resilience of electricity supply in Sikkim, India. The project will enhance Sikkim’s power distribution system by upgrading it with approximately 770 km of climate-resilient medium voltage underground and/or covered conductors.
  • In January 2024, AIIB invested around $58.4 million in infrastructure investment trust (InvIT) Sustainable Energy Infra Trust (SEIT). The InvIT has eight operating solar power generation assets of 1.54 GW peak total capacity, located across India. SEIT is co-sponsored by Mahindra Susten Private Limited, the dedicated renewable energy platform of one of the largest Indian multinational conglomerates (the Mahindra Group) and the Ontario Teachers’ Pension Plan, a leading global institutional investor.
  • In December 2023, ADB approved a $250 million policy-based loan designed to enhance the financial sustainability of India’s power sector and facilitate the transition towards renewable energy. This funding aims to support the country in achieving its climate change mitigation targets and reduce barriers to the growth of commercial financing for clean
    energy initiatives.
  • In December 2023, ReNew Energy Global Plc signed an MoU with ADB for funding of $5.3 billion. The MoU outlines potential investments in renewable energy projects, manufacturing, carbon offset initiatives and green hydrogen.
  • In December 2023, ADB approved a $200 million loan to strengthen the power supply in Uttarakhand, with the goal of improving quality, efficiency and reliability. The initiative primarily focuses on the modernisation of power infrastructure in Dehradun, incorporating an advanced, climate-resilient underground cable system covering 537 km, along with 354 ring main units and 99 compact substations.

Equity moves

India’s equity market has seen robust activity across the renewable energy and infrastructure sectors. Several key players have successfully raised substantial capital through a variety of fundraising mechanisms, including initial public offerings (IPOs), qualified institutional placements (QIPs) and preferential issues. This reflects growing investor confidence in the long-term potential of renewable energy, infrastructure development and sustainable growth.

  • In September 2024, IGREL Renewables Limited, the renewables platform of the INOXGFL Group, raised Rs 3 billion in equity capital. Additionally, IGREL Renewables has secured PPAs with group companies and other major commercial and industrial customers for over 600 MW of capacity. This equity capital raise is expected to result in a single-digit dilution of ownership for the company.
  • In September 2024, IREDA received approval from the Department of Investment and Public Asset Management to raise approximately Rs 45 billion through a fresh equity issue. The funds will be raised through a QIP, with the Indian government planning to reduce its shareholding in IREDA by up to 7 per cent after the issue, potentially in one or more stages.
  • In September 2024, NGEL filed draft documents for an IPO valued at Rs 100 billion. In this IPO, NGEL will issue only new shares, with no existing shareholders selling their stakes.
  • In September 2024, Waaree Energies Limited received final approval from the Securities and Exchange Board of India (SEBI) to raise funds through an IPO. The company plans to raise
    Rs 30 billion through a fresh issue with a face value of Rs 10 per equity share and an offer for sale of up to 3.2 million equity shares, each with a face value of Rs 10.
  • In September 2024, ACME Solar Holdings Limited applied for an IPO to raise Rs 30 billion to support its renewable energy growth. The company plans to use about half of the funds to pay off its debts. In its draft red herring prospectus submitted to SEBI, ACME Solar stated that the IPO will have a face value of Rs 2 per equity share. The offering will include a new issue of shares worth up to Rs 20 billion, while shares worth Rs 10 billion will be sold by its promoter group, ACME Cleantech Solutions Private Limited.
  • In August 2024, Continuum Green Energy Private Limited raised Rs 12.56 billion in new equity from Just Climate. The fund will help Continuum deploy wind-solar hybrid energy generation and storage projects.
  • In August 2024, the India Grid Trust (IndiGrid) initiated a preferential share issue priced at Rs 136.43 per share to raise approximately Rs 6.95 billion. This follows the successful completion of an offer for sale by its sponsor, KKR. The OFS, intended to reduce KKR’s stake from 21.17 per cent to 3.85 per cent, was ooversubscribed by nearly two times.
  • In June 2024, Adani Energy Solutions Limited’s (AESL) board of directors approved a fundraising of up to Rs 125 billion. The company will raise funds via the issuance of shares or other securities through QIPs or any other permissible mode.
  • In June 2024, Inox Green Energy Services’ board of directors approved a proposal to raise up to Rs 10.5 billion through the issuance of equities and convertible warrants via a preferential issue. As part of this plan, the company aims to issue over 28.9 million equity shares at Rs 138 each, which includes a premium of Rs 128 per share, totalling Rs 40 million, to non-promoter entities.
  • In April 2024, JSW Energy Limited concluded its QIP, raising Rs 50 billion through the sale of shares to institutional investors. Among the investors, the Abu Dhabi Investment Authority, Blackrock, GQC, Nomura and Wellington were notably involved. The funds will be instrumental in advancing its growth initiatives, strengthening its financial position and supporting its ambitious expansion plans.
  • In March 2024, AGEL raised Rs 23.38 billion through a private placement of warrants to Ardour Investment Holding Limited. Upon conversion and exercise of the warrants into equity shares, the warrant holder will hold a 3.83 per cent equity stake in the company, on a fully diluted basis. In a separate development, AGEL has concluded funding for the $750 million, 4.37 per cent notes due on September 9, 2024 (Holdco notes). The funds, amounting to $1,125 million, were received through preferential allotment to AGEL’s promoters.
  • In February 2024, Gensol Engineering Limited raised Rs 9 billion in equity capital through warrants convertible into equity shares on a preferential basis. The equity fundraise attracted participation from both international and domestic investors, including foreign portfolio investors such as Elara India Opportunity Fund Limited, Aries Opportunities Fund
    Limited and Tano Investment Opportunities Fund.
  • In December 2023, Sterling and Wilson Renewable Energy Limited completed a fundraising of Rs 15 billion through the QIP route. The Securities Issuance Committee of the Board of Directors at its meeting approved the issue and allotment of 43,227,665 equity shares with a face value of Re 1 each to eligible qualified institutional buyers at an issue price of Rs 347 per equity share (including a premium of Rs 346 per equity share).
  • In December 2023, IndiGrid secured Rs 6.7 billion through a SEBI-compliant institutional placement (IP) process. Over 90 per cent of the additional units were allocated to insurance companies, mutual funds, pension funds and domestic institutions. Axis Capital Limited, Ambit Private Limited, HSBC Securities and Capital Markets (India) Private Limited and SBI Capital Markets Limited acted as the book running lead managers for this placement.
  • Mergers and acquisitions

Several M&A deals occurred in the past 12 months, majorly in the generation and transmission sector. These acquisitions were led by Adani Power Limited and Reliance Industries Limited. The renewable sector also saw a number of such deals.

  • In September 2024, a consortium of Adani Power and Dickey Alternative Investment Trust acquired Coastal Energen Private Limited (CEPL) for Rs 33.31 billion. CEPL has been combined with Moxie Power Generation Limited, a special purpose vehicle (SPV). Adani Power holds a 49 per cent stake in the project. The financial creditors will receive Rs 33.3 billion in cash as an upfront payment and operational creditors will receive Rs 46.4 million.
  • In August 2024, Adani Power announced its decision to acquire Reliance Powers’ MW Butibori TPP. The plant is operated by Vidarbha Industries Power Limited, a division of Reliance Power. The final sale value will be between Rs 24 billion and Rs 30 billion.
  • In August 2024, Tata Power proposed to acquire a 40 per cent stake in Khorlochhu Hydro Power Limited for approximately Rs 8.3 billion to set up a 600 MW hydro project in Bhutan. Tata Power has partnered with Druk Green Power Corporation Limited to develop the project at a total investment of Rs 69 billion.
  • In August 2024, Suzlon Energy Limited’s board approved the acquisition of a 76 per cent stake in Renom Energy Services Private Limited for Rs 6.6 billion in two tranches from the Sanjay Ghodawat Group. The first tranche involves purchasing a 51 per cent stake for Rs 4 billion, while the second tranche, set to take place within 18 months from the acquisition of the first tranche, involves acquiring an additional 25 per cent stake for Rs 2.6 billion.
  • In July 2024, Reliance Industries acquired a 26 per cent stake in Adani Power’s   Mahan TPP located in Madhya Pradesh. The companies signed a 20-year PPA for 500 MW of capacity. Reliance Industries invested Rs 500 million for a 26 per cent stake in Mahan Energen Limited’s TPP. The plant was a wholly owned subsidiary of Adani Power. Mahan Energen allotted 50 million equity shares with a face value of Rs 10 each to Reliance Industries at par.
  • In May 2024, AESL acquired a 100 per cent stake in Essar Transco Limited after obtaining requisite regulatory and other approvals for an enterprise value of Rs 19 billion. The acquisition includes a fully operational 400 kV interstate transmission line spanning 673 ckt km, linking Mahan in Madhya Pradesh to the Sipat pooling substation in Chhattisgarh.
  • In May 2024, Adani Electricity Mumbai Limited (AEML) signed an agreement to acquire a 100 per cent stake in Pointleap Projects Private Limited (PPPL) for a consideration of Rs 131.5 million. AEML executed the share purchase agreement with Windson Projects LLP for acquiring 100 per cent equity shares of PPPL.
  • In May 2024, CESC Limited, through its subsidiary Purvah Green Power Private Limited, entered into an SPA to acquire 100 per cent of the share capital (on a fully diluted basis) of Bhadla 3 SKP Green Ventures Private Limited from SKP Green Ventures Private Limited. Purvah has completed the acquisition of 10,000 equity shares, valued at Rs 10 each, representing 100 per cent of the issued and paid-up share capital (determined on a fully diluted basis) of Bhadla 3 SKP Green Ventures, for a total sale consideration of Rs 38.4 million.
  • In May 2024, the Competition Commission of India approved the acquisition of additional shares in Sikkim Urja Limited by Greenko Energies Private Limited. Greenko Energies is a limited liability company incorporated in India and is a wholly-owned (indirectly) subsidiary of Greenko Mauritius. Sikkim Urja is an SPV, incorporated for the implementation of the 1,200 MW (6×200 MW) hydropower project in north Sikkim.
  • In March 2024, BluPine Energy broadened its renewable energy portfolio through the acquisition of 369 MW of solar power assets from the ACME Group. The agreement encompasses 14 solar projects under SPVs situated in Uttarakhand, Punjab and Karnataka.
  • In March 2024, JSW Renewable Energy (Coated) Limited signed a business transfer agreement with Reliance Power to acquire the 45 MW Vashpet wind project as a going concern on a slump sale basis. The purchase consideration for the transaction is Rs 1.32 billion, adjusted for the net working capital as of the closing date.
  • In February 2024, IndiGrid acquired the 300 MW ReNew Solar Urja Private Limited solar project from ReNew, for a total enterprise value of Rs 15.5 billion. The purchase was funded through equity, internal accruals and debt. It is expected to add Rs 800 million to IndiGrid’s net cash flow. The project involves a 25-year PPA with SECI at a fixed tariff of Rs 2.71 per unit.
  • In February 2024, Sembcorp Industries completed the acquisition of 100 per cent of the share capital in two SPVs belonging to Leap Green Energy Private Limited. This acquisition, carried out by Sembcorp’s wholly owned subsidiary Green Infra Wind Energy Limited, encompasses 228 MW of operational wind assets situated across Madhya Pradesh, Maharashtra and Rajasthan.
  • In October 2023, AESL completed its acquisition of the entire equity shares of Sangod Transmission Service Limited from Rajasthan Rajya Vidyut Prasaran Nigam Limited. The project includes the implementation of the transmission project RAJ/PPP-11, featuring a 2×400/220 kV, 500 MVA grid substation in Sangod, in addition to a 220/132 kV 160 MVA transformer and the associated transmission line.

Bond issuance

It was a big year for the power sector in the bond market. Key market players issued bonds within the past 12 months for refinancing and raising funds. Bond issuances were led by Adani Enterprises and Power Grid Corporation of India Limited (Powergrid). Green bonds were also issued.

  • In August 2024, Adani Enterprises Limited launched a public issue of secured, rated, listed, redeemable, non-convertible debentures (NCDs) valued at Rs 1,000 each, aiming to raise Rs 4 billion. The company also included a greenshoe option, allowing for an oversubscription of up to Rs 4 billion, bringing the total potential issue size to Rs 8 billion.
  • In June 2024, Kalpataru Projects International Limited raised Rs 3 billion through the issuance of NCDs on a private placement basis. The NCDs will be listed on the wholesale debt market segment of Bombay Stock Exchange Limited. The company has allotted 30,000 NCDs with a face value of Rs 100,000.
  • In March 2024, Powergrid’s board approved a proposal aimed at raising up to Rs 12 billion through bond issuance. The Committee of Directors for Bonds has approved the issuance of unsecured, non-convertible, non-cumulative, redeemable, taxable Powergrid bonds – LXXVI (76th) issue. The base size of the issue is Rs 4 billion, with an additional greenshoe option of Rs 8 billion.
  • In January 2024, REC Limited raised JPY 61.1 billion by issuing green bonds under its $10 billion Global Medium Term Notes Programme. Proceeds from the issue of the bonds will be used to finance eligible green projects in accordance with the company’s green finance framework. These bonds have tenors of five years, 5.25 years and 10 years, issued at yields of 1.76 per cent, 1.79 per cent and 2.2 per cent respectively.
  • In December 2023, Powergrid’s board approved raising Rs 22 billion in the third tranche of bonds, designated as “Unsecured, Non-convertible, Non-cumulative, Redeemable, Taxable POWERGRID Bonds – LXXV (75th) Issue”.