NASDAQ-listed ReNew Power will exit the rooftop solar business by selling its portfolio of 117 megawatts (mw) to Fourth Partner Energy for an enterprise value of Rs 672 crore, the Sumant Sinha-led company said on January 27.
The company said that the sale of business is a part of the company’s increased focus on projects with higher-return and large scale opportunities.
“Strong capital discipline is a core value for ReNew. This sale illustrates the value that can be released through sale of assets and enhances our ability to capitalize on higher-return opportunities in the near term,” Sumant Sinha, chairman and chief executive officer of ReNew Power, was quoted as saying in the press release.Fourth Partner is an investee company of TPG and Norfund.
After the sale, ReNew Power’s run-rate-adjusted earnings before interest, tax, depreciation and amortisation will reduce by Rs 70-72 crore.
ReNew Power said the company aims to create greater shareholder value through capital reallocation into higher-return opportunities and by being more efficient by focusing more on large utility-scale projects. This will allow the company to fully leverage its competitive advantages of scale, strong asset management, digital analytics, and financing innovation.
As of December 31, ReNew had a total capacity of approximately 10.3 gigawatts (GW) of renewable energy projects across India, including commissioned and committed projects. The company has earlier given guidance of 8.2 GW of operational capacity by financial year 2021-22 as against around 6,315 mw now.India has revised its clean energy target and it now aims to build 500 GW of renewable energy capacity by 2030.