Goldman exits ReNew, CPPIB becomes new majority owner in the company

Goldman Sachs, which entered the Indian renewable energy (RE) space with a Rs 1,000-crore investment in erstwhile ReNew Power back in 2011, has now exited the company in order to comply with US state securities regulations. The rules restrict the ownership of securities beyond 10 years in a company.

On March 3, CPPIB bought Goldman’s shares for $268 million and now owns 76 million Class-A shares, one Class-D share and 118 million Class-C shares in ReNew. Class-A shares offer voting rights. The shares were priced at $4.8 each.

Sumant Sinha promoted the solar and wind energy company, which was one of the first RE firms to get private equity funding in a nascent sector. The company would now be majorly owned by Canadian Pension Plan Investment Board (CPPIB), with a 51.6 per stake in ReNew Energy Global Plc.

During the past decade, the company grew to touch 7 Gw of RE capacity and got listed on Nasdaq. ReNew took the special purpose acquisition company (SPAC) route to be listed on Nasdaq last August. RMG Acquisition Corp II, the US-based blank cheque company, aided the SPAC listing of ReNew. Post this, Goldman was aiming to exit the firm, which it eventually did by paring its stake in phases.

In February, Goldman Sachs sold 18 million Class-A shares and 3.4 million Class-C shares of the company at $6.50 each to CPPIB for $139 million. CPPIB first invested in ReNew by purchasing the equity shares held by ADB for a total consideration of Rs 918 crore and invested another Rs 1,608.9 crore in 2018. As of September 2022, CPPIB had about $21.1 billion invested in India, making it one of the largest institutional investors in the country.

The $268-million deal comes at a time when ReNew Power rebranded itself as ReNew to convert itself from a pure-play renewable Independent Power Producer to an end-to-end provider of solutions across green energy. Through this, the company wanted to mark its presence in green hydrogen, energy storage and carbon markets too.

The move became quite evident, when it signed a memorandum of understanding with the Andhra Pradesh government for two projects worth about Rs 97,500 crore. According to government sources, the Andhra projects focus on new areas in which the company wants to mark its presence, including green hydrogen and battery storage.