It’s a new week, and as the Editor of the FT, Roula Khalaf handpicks her favorite stories for the Editor’s Digest newsletter. This week, one story that stands out is the decision of India’s second-largest renewable energy company, ReNew, to depart from the Nasdaq following a substantial market value drop since its listing in 2021.
Here are some key points to consider about ReNew’s journey and the renewable energy industry in India:
- Founded in 2011, ReNew boasts a market capitalization exceeding $2.4 billion and over 10 gigawatts of renewable capacity, evenly distributed between wind and solar energy.
- Aligned with Adani Green Energy, ReNew is part of a group of companies with a vision to enhance India’s non-fossil fuel power generation capacity to 500 GW by 2030 amid the country’s reliance on coal for energy.
- Recent allegations of a bribery scheme involving Gautam Adani and others have cast a shadow over the renewable industry in India, raising concerns about ethical practices.
- ReNew is contemplating a buyout deal, offering $7.07 per share to shareholders through a consortium involving Masdar, the Canada Pension Plan Investment Board, and the Abu Dhabi Investment Authority.
Sumant Sinha, CEO of ReNew, has highlighted the undervaluation of renewable energy companies in the market, emphasizing the need for a shift towards green energy investments. Despite signing a significant electricity supply contract with Microsoft in India, ReNew’s listing on the Nasdaq has faced challenges, with potential impacts from global political changes on energy stocks.
A Mumbai-based energy analyst pointed out the limitations of the US listing for ReNew, citing low liquidity and high debt levels affecting profitability. With analysts downgrading ReNew due to revenue volatility and debt concerns, the company faces decisions on future listing and financial strategies.
In conclusion, ReNew’s journey reflects the complexities and opportunities in the renewable energy sector, prompting a reevaluation of investment approaches and market dynamics. As we witness the evolving landscape of energy transitions, it is crucial to support sustainable initiatives and ethical practices for a greener future.
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