INOX Green Energy Services, a subsidiary of INOX Wind and part of the INOX GFL group of companies, is set to launch its three-day initial public offering (IPO) on November 11. The wind power operation and maintenance (O&M) service provider proposes to raise ₹740 crore via issue, which comprises a fresh issue and an offer for sale of ₹370 crore each. The shares of the company are expected to be listed on the domestic stock exchange – the BSE and the NSE - on November 23.
The price band for the issue, which closes on November 15, has been fixed at ₹61-₹65 per equity share. Bids can be made for a minimum of 230 equity shares and in multiples of 230 stocks thereafter. This means a retail investor can apply for up to 13 lots or 2,990 shares, for a value of not more than ₹1,94,350.
The company intends to use capital proceeds from the fresh issue of equity shares for repayment of certain borrowings availed by the company, including redemption of non-convertible debentures (NCDs) in full, and general corporate purposes.
As per the shareholding pattern submitted with SEBI, the promoter, INOX Wind, owns 93.84% shares in Inox Green Energy Services. Post IPO, Inox Wind aims to become debt-free following fund infusion by promoters. According to the prospectus filed with the SEBI, as of June 2022, the company had a gross debt of ₹1,717.8 crore and cash balance of ₹222 crore, and a net debt of ₹1,494.8 crore on its books.
Speaking to Fortune India, Devansh Jain, the third generation entrepreneur of the Inox Group, says the key investment thesis behind INOX Green Energy is that it is backed by one the largest corporate houses in the country, INOX Group, and also INOX Wind, one of the leading wind energy solutions provider. The government’s strong push to the renewable energy sector, which is one of the cheapest sources of power, also augurs well for the company.
On increasing competition in the Indian wind energy industry, Jain, 35, the founder and executive director of INOX Wind, says that there is massive organic and inorganic growth opportunity available in the renewable market for O&M service providers. “India aims to achieve a target of establishing 500 GW of renewable energy capacity by 2030, and we are presently at 150 GW. So, this means we are looking to create 350 GW of renewable energy in the next 8 years, which amounts to 45 GW per annum.”
On post-listing plans, Jain says the entity aims to become asset-light by reducing its debt through primary fundraising. “The company has sold three special purpose vehicles (SPV) to the Adani Group and one to Torrent Power and plans to sell one more in the next couple of months,” he said.
Recently, INOX Green Energy Services (IGESL) sold its entire 100% shareholding in three SPV - Wind One Renergy Ltd, Wind Three Renergy Ltd, and Wind Five Renergy Ltd to Adani Green Energy, a part of the Adani Group. Besides, it also offloaded equity shareholding in Wind Two Renergy Private Limited to Torrent Power Limited, a part of the Torrent Group. However, IGESL will continue to provide long term operations and maintenance services for these projects.
Formed in 2012, IGESL is engaged in the business of providing long-term O&M services for wind projects, specifically the provision of O&M services for wind turbine generators (WTGs) and the common infrastructure facilities such as pooling stations and transmission lines, which support power evacuation from such WTGs.
As of June 30, 2022, INOX Green’s O&M services portfolio consisted of an aggregate 2,792 MW of wind farm capacity and 1,396 WTGs. Its portfolio of O&M contracts (consisting of both comprehensive O&M contracts and common infrastructure O&M contracts) covered an aggregate of 2,792 MW of wind projects spread across eight wind-resource rich states in India with an average remaining project life of more than 20 years. The counterparties to its O&M contracts feature a mix of independent power producers (72%), public sector undertakings (14%) and corporates (14%), as on June 30, 2022.
Edelweiss Financial Services Limited, DAM Capital Advisors Limited, Equirus Capital Private Limited, IDBI Capital Markets & Securities Limited, and Systematix Corporate Services Limited are the Book Running Lead Managers to the offer.