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Goldman Sachs’ ReNew Power stake sale to be biggest IPO exit by a PE firm in India

Goldman Sachs could fetch Rs. 4,000-4,500 crore in the stake sale via the ReNew Power IPO

Goldman Sachs Group Inc.’s planned $600 million stake sale in ReNew Power Ventures Pvt. Ltd will mark the biggest exit for a private equity fund through an initial share sale in India.

ReNew Power, which filed its draft share sale documents on 8 May, is expected to sell shares worth around Rs. 7,500-8,000 crore in the IPO.

“The IPO is largely an offer for sale, which again is largely Goldman Sachs looking to offload a large chunk of its shareholding,” a person aware of the company’s IPO plans said on condition of anonymity. “The secondary share sale could fetch them (Goldman) around Rs. 4,000-4,500 crore (approximately $600-650 million).”

The size of the share sale could change depending on market conditions and investor demand at the time of the actual launch of the ReNew Power IPO, the person said.

The ReNew Power IPO involves a primary fundraising of Rs. 2,600 crore and a secondary share sale of 94 million shares. Goldman Sachs alone is selling 79.78 million shares, the ReNew IPO prospectus shows.

“As we are in the quiet period for this IPO, we are unable to comment,” a spokesperson for Goldman Sachs said in an email response.

“Our Company has filed an offer document (‘Draft Red Herring Prospectus’, or ‘DRHP’) with the Securities Exchange Board of India (SEBI) in respect to an Initial Public Offering (IPO) of its Equity Shares. The offer comprises a primary issue of Rs. 26,000 million and an offer for sale of 94,377,109 equity shares by GEF SACEF INDIA, Green Rock B 2014 Limited and GS Wyvern Holdings Limited. We have no further comments at this stage,” said a spokesperson for Renew Power in an email response.

The Indian primary market has been buoyant in the past three years because of private equity-backed IPOs. In the past three years, 97 companies have raised Rs 1.25 trillion through IPOs, according to data from primary market tracker Prime Database.

The other major IPO exits witnessed in the Indian primary markets include ChrysCapital’s Rs 1,347 crore exit from Eris Lifesciences Ltd, Actis’s Rs 910 crore exit from Endurance Technologies Ltd and IFC’s Rs 810 crore exit from Bandhan Bank Ltd.

“The Indian primary markets have been evolving and over the last three years, have become more and more comfortable with PE-backed IPOs, PE investors selling shares to exit via an IPO, and IPOs which are entirely or largely secondary share sales,” a second person said, also requesting anonymity.

ReNew Power also counts sovereign wealth fund Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, Japan’s Jera Inc. and Global Environment Fund among its investors.

Its investors, over several tranches, have invested a total of Rs 6,696.5 crore in the company since 2011.

ReNew Power was founded in 2011 by Sumant Sinha, a former chief operating officer at wind turbine maker Suzlon Energy Ltd.

As of the date of the draft prospectus, ReNew Power’s portfolio of assets stood at approximately 5.85 gigawatts (GW), comprising 3.92GW of operational capacity, 1.66GW of capacity under development and 0.27GW of wind power capacity awarded in April 2018 in the fourth Solar Energy Corp. of India wind power auctions.

Source: Livemint