Sumant Sinha, Chairman and Managing Director of ReNew Power, will prefer to be cautious before his company taps the capital markets.

Sinha’s company has been in the news as it has been planning an IPO for some time now. “It is not that it has been in the offing for a long time. We planned for an IPO in 2018. By the time we got approvals, the markets had turned and bankers advised against going to the market, so we did not. Since then, for one reason or the other, the market has not been in a good enough shape for an IPO,” he told BusinessLine .

“The lead time to get an IPO is six months.There is no point in doing it unless the markets are healthy and remain healthy. But the growing appetite for ESG-focussed investments has meant that there is a growing investor interest in companies like ours,” he said.

The company has been successful in its bond issue. “The bond launched on Tuesday was a massive success. For a $325-million issuance, we got demand which was in excess of $2 billion. We tightened the issuance by around 0.5 per cent. This was possible because of the huge demand and interest in investing in renewable energy companies,” he said adding “We have had four bonds outstanding before this, so debt investors know us.”

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Cost factors

As regards the company’s portfolio, which today has an ensemble of wind and solar, Sinha said: “The growth in the future is more on the solar side, given its cost dynamics. Definitely our portfolio over time is going to become more solar heavy.”

Commenting on the current government policy on solar, he said: “I think the present solar policy is perfectly fine. There are a couple of things with respect to solar manufacturing as the government is trying to prevent imports from China under the Aatmanirbhar Bharat programme. It is just that the whole industry has been importing solar modules so far. Therefore, the transition process has to be worked out carefully. The government is trying to make sure that it is as smooth as possible.”

The cost of domestic manufacturing will be a little bit higher to begin with, he said, adding: “But over time, it will get better. Frankly, solar has become so cheap now that even if solar tariffs go up by 40- 50 paisa on account of domestic manufacturing, it is a cost that can be absorbed by the industry.”

Solar plans

On Renew Power’s plan to enter the solar manufacturing business, he said: “We have expressed our intent for the same and are doing a lot of preparatory work. We are waiting for the government to come out with a clear policy on customs duty and protection of the domestic market, which is expected in a few months’ time.”

As regards his 24x7 tender and what sort of a technology mix he has zeroed in on, Sinha said, “It is in the very early stages and we are looking at a mix of wind and solar, and some storage. The exact numbers will depend on the location and profile of wind and solar at those locations, which we are finalising at this point. Once we have finalised, we would be informing Solar Energy Corporation of India about it.”

On how comfortable he is with the current tariff levels and if he thought it could be lower, Sinha said: “We are quite comfortable at the current tariff levels; we would not be bidding at tariff levels we are not comfortable with. The tariffs are evolving constantly with the technologies. As the cost of technologies goes down, the tariff levels also tend to follow, if everything else remains the same.”