India’s second-largest renewable energy company, ReNew Energy Global, is set to be taken private in a $2.82 billion deal, filings with the U.S. Securities and Exchange Commission (SEC) reveal. The proposal comes from a consortium comprising major shareholders, including the Canada Pension Plan Investment Board (CPPIB), Masdar, ReNew Chairman Sumant Sinha, and a unit of the Abu Dhabi Investment Authority (ADIA).
The group has collectively offered to purchase shares at $7.07 each, an 11.5% premium over the stock’s closing price of $6.34 on December 10. However, shares surged 17.7% to $7.46 on the Nasdaq after the announcement, exceeding the offer price by 5.5%.
If finalized, the privatization will provide “immediate liquidity” to ReNew’s shareholders, according to the consortium’s letter to the company’s independent directors. The move could also reduce regulatory and compliance costs, supporting the company’s ambitious expansion plans.
CreditSights, a unit of Fitch Group, highlighted the benefits and drawbacks:
- The privatization could limit disclosures and restrict access to U.S. equity markets.
- It introduces Masdar, a reputed UAE state-owned shareholder, potentially unlocking new funding channels in the UAE and Middle East.
ReNew, which operates 10.3 gigawatts of renewable energy projects across India, has seen its stock lose nearly 18% of its value this year prior to the offer.
Shareholder Impacts and Strategic Implications
The deal represents a strategic shift for ReNew:
- Japan’s JERA, which held an 11.7% stake as of July, may exit if the proposal is approved.
- Goldman Sachs, an early investor, had already divested its stake when ReNew went public in 2021.
The delisting could align ReNew’s business model with its long-term growth strategy while reducing its reliance on U.S. markets. According to Masdar, the proposal will bolster capital investment to accelerate India’s energy transition.
