A00458

October 13, 2022

ReNew Power: Building Scale in the Indian RE Sector

“At this juncture, we have been successful and if the momentum continues, we will match
up with the other older private sector players in 2-3 years in terms of EBITDA. Even
though we see immense opportunities in the renewable energy sector in India going
forward, we do recognize the need to diversify. More so when the electricity sector in India
is going through a transformation and is likely to offer opportunities not only in renewable
energy-based generation but also in distribution where the presence of private sector has
been limited and the public sector-dominated distribution has hardly been efficient. Broadly
speaking, we could choose to grow as a renewable energy-based generator in a growing
market like India or we could go global as a renewable energy developer and generator
with/without backward integration in manufacturing or we could look at the emerging
opportunities in the Indian electricity sector.”

Sumant Sinha, CEO, ReNew Power

In December 2020, Sumant Sinha, the founder CEO of ReNew Power, scheduled a team meeting
to discuss the future direction for the firm in the context of the expanding opportunities for
renewable energy-based (RE-based) electricity not only in India but also globally. He reflected on
the growth of ReNew Power with immense satisfaction, as the firm had become the largest RE
developer in India in nine years. From a humble beginning of wind energy-based generation
capacity of 25.2 megawatts (MW) in 2011–12, the company had increased its renewable-based
capacity to 5,000 MW by 2019. Exhibits 1a–1c show the growth in the generation capacity of the
Indian electricity sector, the share of renewable capacity, and the growth in the capacity of ReNew
Power. Contemplating the future, Sumant wondered whether ReNew Power should focus on the
Indian market alone or explore opportunities abroad in the growing renewable energy sector. He
wanted to brainstorm with his team on India’s emerging and increasingly competitive landscape
driven by the Indian government’s ambitious plans for RE-based capacity. Another aim of the
meeting was to explicitly articulate the sources of competitive advantage that had enabled
ReNew to grow and add value for its investors. Any future direction would have to leverage the
strengths of ReNew over its competitors. Until then, ReNew had not only attracted private equity
investors in its growth path but also achieved successively higher valuation, indicating the
confidence of outside investors in ReNew’s ability to add value. Some private equity investors
would be keen to see ReNew listed through an initial public offering (IPO), which had been
contemplated in 2018 but had been deferred due to market conditions.

Prepared by Professors Sobhesh Kumar Agarwalla and Ajay Pandey, Indian Institute of Management
Ahmedabad.
Cases of the Indian Institute of Management Ahmedabad are prepared as a basis for class discussion.
Cases are not designed to present illustrations of either correct or incorrect handling of administrative
problems.
© 2022 by Indian Institute of Management Ahmedabad.
This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 2 of 23 A00458

Background: ReNew Power and India’s Emerging Renewable Energy Sector

ReNew Power was incorporated in January 2011 by Sumant Sinha, a first-generation

entrepreneur and a former investment banker. By 2019, ReNew Power had become one of India’s
largest renewable energy independent power producers (IPPs) in terms of total energy-
generation capacity. Together with his wife, Vaishali, an accomplished former banker, Sumant
started the venture by creating a small team with a dream to become a significant player in the
emerging renewable energy sector in India. Sumant had previously been the chief operating
officer (COO) at Suzlon Energy, one of the world’s top original equipment manufacturers (OEMs)
for wind turbines. This experience instilled in him an interest in the renewables sector. It was
during his stint at Suzlon that the Indian government had started considering the development
and nurturing of renewables as a cleaner and sustainable alternative and had started backing the
wind energy sector. Sumant had always been passionate about climate-change solutions and the
need for businesses and governments to work together to leave behind a better and healthier
planet for future generations. He had quickly sensed a bright prospect for renewables, given the
growing urgency to act against climate change. He set up ReNew Power as a renewable energy
IPP. At that time, wind energy-based generation capacity was the focal point as it had acquired
grid-parity. 1 Solar energy-based generation was not yet competitive enough when compared
with conventional energy-based generation.

After commencing operations with a 25.2-MW wind project in Jasdan, Gujarat, the company grew
exponentially. It became the first renewable energy company in India (and 11th globally) to
exceed 7 gigawatts (GW) of installed capacity, with projects of approximately 4 GW either under
development or in the pipeline. By 2020, ReNew Power developed, built, owned and operated
utility-scale wind and solar energy projects and hydro projects, and distributed solar energy
projects that generated energy for commercial and industrial customers.

Entrepreneurial Journey of the Founder CEO

After graduating from Indian Institute of Technology (IIT) Delhi (a premier technology institution
in India) and Indian Institute of Management (IIM) Calcutta (a premier management institution
in India), Sumant started his career with Tata Administrative Services. After a two-year stint
there, he opted to pursue a post-graduate degree in International Affairs from the School of
International and Public Affairs (SIPA), Columbia University, with specialisation in international
banking and finance, on a Dean’s fellowship. After graduation, he entered investment banking
and spent the next 10 years working as an investment banker in the global financial hubs of New
York and London, with firms such as Citicorp and ING. In 2002, Sumant decided to return to
India and joined the Aditya Birla Group, a premier business group, as its chief financial officer
(CFO). He led some of the largest mergers and acquisitions (M&A) deals for the group, including
that of Novelis 2, and had the opportunity to work with multiple organisations within the group.
He helped expand the group from a leading domestic conglomerate to a global multinational. In
2007, he presented a case for setting up a retail business to the group and subsequently
implemented the plan. This implementation was his first entrepreneurial venture.

1
The cost of electricity from wind turbines was similar to that of electricity generated from conventional sources (or
the cost of electricity generated from generators on the grid).
2 Novelis was an aluminium company based in Atlanta, USA.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 3 of 23 A00458

Sensing an Opportunity in the Renewable Energy Sector

In 2008, Sumant joined Suzlon Energy Limited, a large wind-turbine manufacturer and developer
in India. His role at Suzlon was challenging as the company was experiencing a harsh business
environment. At approximately the same time, the world had started paying significant attention
to climate change and its potentially adverse impact on lives and livelihoods. The Kyoto Protocol,
aimed at the reduction of greenhouse gases, had come into effect in 2005, and the first
commitment period under the protocol began in 2008. Countries were under increasing pressure
to curb carbon emission levels and adopt a sustainable growth path. As nations started
committing to carbon reduction, RE began to emerge as a clear alternative. Despite this thrust,
the RE sector was still relatively nascent, particularly in India. There were few players, with no
established business model. Businesses had limited domain knowledge and understanding of
technology. ReNew entered this uncharted sector, requiring large capital. At that time, the Indian
RE sector was marked by a handful of turbine manufacturers serving a few high-net-worth clients
that were looking for tax benefits, and these manufacturers did not have a specific interest in the
electricity sector as a generator. Nonetheless, Sumant backed his instinct. He sensed large
opportunities in the RE sector in the not-so-distant future. Together with Vaishali, he decided to
focus on creating a core team and raising finances to turn their plans into action.

Building the Team

As the RE sector did not have any established and sizeable firms as IPPs or developers, Sumant
focussed on building a core team of experienced professionals with a good understanding of the
sector. Some of Sumant’s former colleagues who shared his vision for the sector and passion for
entrepreneurship joined the team. Kailash Vaswani, an experienced finance professional who had
previously worked with Sumant at the Aditya Birla Group, was one of the first members of the
team; he immediately engaged in fundraising efforts. Soon, Balram Mehta (the COO of ReNew
Power as of December 2021), a wind and energy sector professional, joined the team. The team
grew to include professionals from various sectors, with expertise in finance and domain
expertise (primarily in the wind sector), such as Shanker Bhatia, Nikunj Kathuria, Ajith Pillai and
Iftekhar Ansari, all of whom were still working at ReNew in December 2021.

Initial Struggle for Funding

Sumant knew that in spite of his background in investment banking, it would be challenging to
convince investors to back the idea. The renewable energy sector was just emerging, and investors
were unsure of its potential. The projects were highly capital-intensive, and generators had to
grapple with myriad challenges on the ground. While the government signalled its intent to
encourage the sector, the policy certainty was unknown. Thus, the risk perception of this sector
was very high. However, Sumant did not give up; he decided to knock on multiple doors to
gather the requisite funds. He was convinced of the prospects of the sector and began to schedule
pitch meetings with several contacts, armed with a strategic business plan presentation.

The next phase was a gruelling one, consisting of multiple investor meetings in which Sumant
presented his business plan, with a target of raising USD 60 million for the pipeline of 100 MW.
The experience was a test of his perseverance and grit; although the response was not quite
favourable, he refused to give up. Sumant’s team met different types of investors across
geographies, leaving no stone unturned. Throughout this phase, Sumant had another critical

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 4 of 23 A00458

responsibility—to keep the team members’ morale high. He tried his best to ensure that they did
not become unduly anxious about ReNew’s ability to raise capital. Given the uncertainties related
to funding, it was difficult to retain people, especially those in leadership positions, and a couple
of employees quit, leading to a further increase in pressure. The investors needed to have the
confidence that Sumant was not alone in this mission and that he had an accomplished team that
believed in him and could translate plans into action. As Sumant and Kailash explored various
fundraising avenues, they continued to encounter the same barrier. Private equity (PE) firms
considered their idea to be at too early a stage—premature with regard to meeting their
investment criteria. ReNew Power had no revenues, no track record of projects executed, and no
proven capability to raise funds or execute projects; furthermore, the PE firms did not trust the
ability of the ReNew team to appropriately assess, implement and operate RE projects.
Meanwhile, venture capitalists (VCs) considered ReNew to be too big a proposition. VC firms
typically invest in an idea and not in (running) businesses, and had an average ticket size of USD
10 million—an amount that was paltry in comparison with the amount that ReNew needed.
Sumant’s “never say die” spirit and his ability to brush aside initial setbacks eventually paid off
as he finally struck a deal with Goldman Sachs (GS).

Initial Funding by Goldman Sachs (GS)

After a meeting between GS and ReNew, in which Sumant and Kailash presented their plans, the
GS team said that it was interested in the sector as GS was looking for an opportunity to enter the
Indian infrastructure space. However, it was keen on a bigger investment size. So, Sumant and
his team went back to the drawing board and returned with a more ambitious five-year plan,
targeting a capacity of 600 MW and seeking funding of USD 200 million. This result was the first
major victory for Sumant and ReNew as they managed to win the trust of a premier investor.

GS completed the due diligence process in approximately three months, and ReNew received the
funds in September 2011. The establishment of the GS–ReNew relationship could be attributed to
a few reasons. GS completed an investment in an RE business in the US at around the same time
and wanted to replicate its investment model in India. Just after the completion of the US deal,
GS evaluated ReNew’s investment decision, and the RE-sector expertise of GS helped in the
finalisation of the terms of the deal. Additionally, GS was interested in Sumant’s vision for the
company and the RE sector in India at large. Initially, GS kept a close eye on whether the team at
ReNew could raise finances, undertake robust wind assessment, execute the project on time and
seamlessly resolve various issues on the ground. As the team proved its competence on these
fronts over time, GS grew more confident in the abilities of the ReNew team. As the number of
available opportunities increased, ReNew Power later sought an additional capital of USD 90
million from GS, and the latter agreed to the investment.

Early Challenges in Building the Business

As it planned to become a sizeable developer, ReNew needed equity investment to efficiently

build assets and execute the construction and operation of RE capacity. Having secured an equity
commitment, it needed to build its procurement and project execution capability to be
competitive. Before the funding from GS, leading OEMs were unsure of whether ReNew would
be a long-term player. ReNew had to work hard to gradually build a relationship of trust and
mutual respect with leading global renewable energy players such as Suzlon, Gamesa, Enercon

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 5 of 23 A00458

and Vestas. Relationship-building became easier after ReNew received the funding from GS and
especially after ReNew established a track record in dealing with its suppliers and contractors.

Developing the Business

Maharashtra was one of the states where ReNew began its journey, as the state had favourable
policies for wind energy-based generators. However, ReNew had to contend with many local
issues in the state. ReNew began to receive offers for turnkey projects through Engineering,
Procurement and Construction (EPC) contracts in which the OEM would actually manage
everything. ReNew chose the in-house project execution model, wherein it would execute the
project after buying the required equipment and inputs within the first year of its operation. This
choice was unusual as firms typically required four to five years to gain the maturity needed for
developing projects independently. ReNew was able to accomplish such development as it had
invested in nurturing a skilled team that would execute the projects in Maharashtra. Another
factor that necessitated in-house development was the OEMs’ reluctance to offer the turnkey
model because of the complications associated with approvals, signing Power Purchase
Agreements (PPAs) and other local issues. After successfully building a capacity of 100 MW for
projects under self-development, the ReNew team’s confidence and reputation in project
execution capabilities improved significantly.

As a location for operations, Maharashtra posed many issues, such as the requirement for
multiple approvals, land acquisition complexities and the need for PPAs. Although this situation
was daunting for a new firm like ReNew, it handled the issues by facing and resolving them. The
efforts involved working in close coordination with the local authorities for smooth resolution of
problems, eliminating the need for third parties such as land aggregators and dealing directly
with farmers, and winning the confidence of farmers by paying fair compensation as per market
rates.

ReNew consciously chose to engage with multiple OEMs for wind turbines, bucking the trend of
IPPs typically being tied to a single OEM. ReNew took a different approach and decided not to
depend on a single OEM. This approach reduced the risk of failure of a particular OEM. ReNew
signed contracts with five OEMs to mitigate the risk from issues arising at the OEMs’ end. It also
consciously diversified the risk of relying on a particular geography or buyer. While working on
projects in Maharashtra, the company explored opportunities and potential in Rajasthan and
Madhya Pradesh (MP). As soon as Rajasthan and MP announced a favourable wind policy,
ReNew was ready to set up projects there.

In MP, ReNew tried a new hybrid model by taking over some of the OEMs’ responsibilities, such
as securing land and obtaining approvals to facilitate faster and efficient project execution. This
model was also successfully used at some of the sites in Andhra Pradesh (AP). ReNew steadily
expanded its footprint in Karnataka, a state with immense potential for the development of wind
energy-based projects. Karnataka also created a market for developing projects for private-sector
customers. Instead of signing agreements with public utilities, it signed PPAs with several third
parties, corporates and captive units to directly supply power to them. Some of the PPAs with
small factories and commercial establishments were at tariffs that were much higher than those
from the state-owned utilities.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 6 of 23 A00458

Within a year from its incorporation, ReNew commissioned its maiden 25.2-MW wind plant in
Jasdan, Gujarat, in 2012, with a turnkey model of project execution. The plant was inaugurated
by the then chief minister of Gujarat, Narendra Modi, and was the first tangible milestone for the
ReNew team, which acted as a confidence booster. However, the commissioning at Jasdan was
not without its share of drama. A few days before the commissioning, the state government had
announced that it would revisit the tariffs and PPA. It had taken several rounds of negotiations
to convince the state government to roll back this move, which, if pursued, could have thrown
ReNew’s original plans off track.

Building Operations and Asset Management Capability in Wind Energy

In the Indian wind energy sector, OEMs handled all aspects of the business as the turbines were
mostly owned by companies with other business interests. Most of the companies had invested
in the sector to avail tax and depreciation benefits, making the machines cost-free after two or
three years. As the owners had no expertise in running a wind farm, OEMs handled all the tasks—
from finding land, measuring wind, manufacturing and installing turbines, and signing PPAs to
handling the operations and maintenance (O&M). This complete package offered by OEMs
became the standard norm as the owner-clients received tax incentives and also earned revenues
from generation. Consequently, O&M did not receive due attention.

As a developer-operator, ReNew focussed on the efficiency of plants and ensured that the plants
performed according to wind availability. OEMs, however, charged a fixed time-based fee that
depended on the availability of machines. OEMs committed to only machine availability and not
generation, and therefore, they were not responsible if a machine ran at reduced power or if there
was a grid shutdown. Inefficiencies in machine operations, not attending to machines on time
and not following up to solve grid issues could contribute to losses in the range 5–7%.
Nevertheless, the OEMs continued to charge a fixed fee as these issues were outside the scope of
the engagement contract.

ReNew identified savings in O&M cost as a critical area and an important value-driver of the
business, and decided to build in-house capability. To achieve such savings, assets had to be
maintained in good condition, their condition had to be monitored and they had to be used based
on prevalent conditions. Given the inherent weaknesses in third-party O&M contracts, ReNew
built a skilled and experienced team to monitor asset conditions and track the output of the assets.
Once ReNew attained a critical volume of assets, it decided to proceed with in-house O&M as it
was important for controlling the operations. The company also sought to gradually bring the
assets whose O&M was initially outsourced under in-house O&M. The objective was to maximise
the efficiency of its assets and to keep them performing at acceptable standards for 20–25 years.
ReNew deployed teams to complement the O&M contractors and manage areas that were outside
the scope of the third-party O&M agreement.

To enhance asset efficiency, ReNew moved away from the time-based machine availability
concept and introduced a new metric—a first in the industry—termed Lost Production Factor
(LPF). LPF denotes the share of potential wind not harvested by turbines. LPF accounted for the
time lost during high-wind and low-wind season differently and, therefore, provided a better
measure of production loss (and, hence, revenue loss) than the traditional time-based availability
measure. ReNew used and set targets for LPF on its wind farms.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 7 of 23 A00458

Expanding Opportunities in the Indian RE Sector

When ReNew started its journey, the RE sector in India primarily consisted of wind energy-based
electricity generation. By 2010–11, India had an installed wind-based capacity of 16,084 MW.
Sumant reflected:

Wind-based energy generation by then had become proven technologically and

was only slightly more expensive relative to conventional fossil fuel-based energy.
Wind turbines had evolved technologically, and there were turbine manufacturers
such as Suzlon, Enercon whose machines we could rely on to deliver power for 25
years to build our business model. Solar at that stage was prohibitively expensive,
and very few large-scale plants were on the ground globally.

Anticipating a decrease in the cost of solar photovoltaic (PV) capacity, the Indian government
provided the next big push in 2010 in the form of the National Solar Mission, wherein it targeted
achieving 20 GW of solar capacity by 2022. Exhibits 2a and 2b provide the cost trajectory of solar
(PV) energy-based electricity generation. Until 2013, a subsidiary of NTPC Ltd, the largest
electricity generator owned by the government of India, organised capacity procurement. It acted
as an intermediary between the developers, who would set up the capacity, and the utilities,
which would buy electricity. The reverse auction process was used—the bidders had to bid at a
discount from the approved ceiling rate set by the central regulator. At that time, the price of solar
PV electricity generation was typically more than twice the price of conventional coal-based
generation capacity.

With a further fall in the cost of RE-based power, and particularly that of solar PV power, in
December 2014, the newly elected government in India decided to scale up the target for solar
capacity from the previous value of 20 GW to 100 GW. The targeted 100 GW included 60 GW
from utility-scale plants and the remainder from solar rooftop capacity. The government also
announced an ultra-mega solar power project scheme covering projects with a minimum capacity
of 500 MW. In addition, it mooted the idea of establishing at least 25 solar parks, which would be
developed by a state government, independently by a designated entity, or jointly with the Solar
Energy Corporation of India Limited (SECI), a solar energy company owned by the government
of India. The objective was to achieve scale at a single location (having solar energy potential) and
develop infrastructure (including connectivity to the grid) before inviting bids from generators 3.
These initiatives helped in widely expanding the opportunities in the sector for any solar energy-
based (solar PV energy-based) developer. Given these opportunities, it was natural for ReNew to
move into the field of solar energy.

ReNew Enters the Solar Energy Business

Sumant was clued in to the falling cost of solar PV technology and had noted that the bids had
decreased from INR 16–17/kilowatt hour (kWh) to INR 7–7.50/kWh in two to three years.

3
The bidders had to pay a pre-decided amount as the cost/lease rent of the land used and the cost of any other services
to the solar park developer. The bidding was a continuous reverse auction process: the bid started from a ceiling price,
and the bidders could continue to post lower prices until the bidding stopped and no one was willing to quote a lower
price.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 8 of 23 A00458

Applying Moore’s law, he anticipated a further fall in the effective cost/tariff of solar PV energy-
based electricity generation. He said:

Solar module cost had fallen from about USD 1/W to USD 0.6/W. The solar
energy-based generation was otherwise similar as a business, and we had been in
the electricity sector and had dealt with buyers, had seen and learned to manage
connectivity issues, regulators, and moreover, the construction and land
acquisition issues at the project stage were similar to what we had been doing for
wind energy-based generation. Having sensed the opportunity, we didn’t want to
be outflanked by the evolving solar-energy opportunity, and we sought approval
from our shareholders (GS) to pursue solar-based opportunities.

The shareholders were concerned because their investment in ReNew was based on its success in
and focus on wind energy-based generation. However, Sumant confidently argued that being a
developer, ReNew could add value as the businesses shared many commonalities, irrespective of
differences in technology, and it could quickly build the capabilities for solar technology. ReNew
made job offers to onboard talent from existing firms in the solar-energy space and managed to
recruit a few people. Finally, in 2013, an in-house team was created within ReNew to understand
the evolving solar sector, including the mode of project execution, market potential and supply
chain. To learn about supply chain and sourcing, the ReNew team visited China several times to
identify suppliers of solar panels/modules and decided to engage with top-tier manufacturers
even though smaller manufacturers were willing to offer lower prices. When the government
announced solar auctions, ReNew was well prepared and was among the earliest IPPs to win
solar capacity at an attractive tariff in an auction in 2014. By 2015, it had commissioned its first
utility-scale solar project. While ReNew had the largest wind portfolio in the country, its solar
business also ramped up significantly within a short span. It also diversified into distributed
solar—open access and rooftop solar, as these services became widespread.

In the solar energy segment, ReNew focussed on ensuring control over the quality of
panels/modules supplied by the manufacturers. Sumant reflected:

We knew from our experience that as much as 5% of the panels could be below
par in case they are not checked adequately. To ensure quality, we supplied Bill of
Materials (BoM) to the manufacturers who allowed an audit of their
manufacturing lines by our in-house team. The same team was also present at the
plants when the manufacturing for our order was scheduled. Finally, we sent the
samples to Germany for testing instead of relying on local labs. For quality-
checking expertise, we had to hire a few people previously working with local
manufacturers who had some experience in manufacturing from the compact disc
(CD) industry. We rejected the dispatch if the sample failed the test even if it had
been on high seas.

Another major difference between the solar and wind businesses was with regard to land
acquisition—for a solar plant, the land to be acquired was a compact, large-sized tract, whereas
for a wind energy plant, it was dispersed. For a successful bid in solar energy, ReNew had to
acquire large tracts, and it had to develop the capability of dealing with owners and the state
government to quickly complete the acquisition process. These requirements were challenging
because land acquisition rules differed across states. ReNew developed the needed expertise over

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 9 of 23 A00458

time and managed land acquisition by itself. To leverage this expertise, the ReNew team decided
to bid for projects in which land had to be acquired by the developer rather than bidding
aggressively for capacity creation at solar parks, where the government provided the land.

Economics of RE-based Electricity Generation

In the case of RE projects, the buyers (typically, the public utilities for electricity, which supply
electricity to end consumers) procured capacity based on competitive bidding, with a long-term
(20–25 years) PPA. The bid was for the electricity to be supplied by the bidder, quoted on a per-
kWh basis. The lowest bidder was awarded the right to set up capacity as a developer-generator.
Like any other bidder, ReNew needed to estimate the cost of purchase/lease rental of land, the
capital cost of setting up the capacity (driven mainly by the cost of equipment such as solar
modules or wind turbines), the capacity utilisation factor (based on location, climatic conditions
and availability of equipment), O&M costs, and the working capital requirement in the form of
receivables and stores and spares. Of these, the land cost was expected to be similar for all bidders
as the bid was for setting up a plant at a pre-decided location or at a solar park that had already
been developed. Each developer was expected to bid its tariff to earn more than the acceptable
desired return (hurdle rate), and the tariff had to be competitive for the bid to be successful.
ReNew had to develop its business to remain competitive and effective in the RE business by
using land efficiently; achieving a reduction in the cost of equipment procurement and
construction of the plant, in O&M costs, and in the cost of capital; and increasing the capacity
utilisation factor (CUF)/plant load factor (PLF).

Responding to the Change in Procurement Policy for the Wind-based Energy Sector

Until 2016, the procurement and use of wind-based energy by public utilities were based on pre-
notified feed-in tariffs, i.e., regulator-specified tariffs were used to procure wind-based energy.
In 2017, as the price of RE-based electricity decreased in competitive procurement, the
government decided that wind energy-based generation would also be procured through a
competitive auction. The first wind auction took place in February 2017. ReNew was well
positioned to adapt to this change as it had built competitive advantages in all the value-drivers
of the business. It had abundant data on the wind potential of the entire country, mapped into
zones. It had detailed information on wind sites, their potential and wind measurement. It was
also relatively well-informed about land availability and possible PLFs at different locations.

Over the years, ReNew had become a preferred partner for leading OEMs, and they wanted to
work with ReNew at preferential rates. ReNew also paid considerable attention to the bidding
process at auctions and prepared well in advance. It did the spadework such as blocking
connectivity in anticipation of inter-state power transmission and assessment/preparation on the
site.

Leveraging Technology to Stay Ahead

ReNew strived to be abreast of and implement technological advances in the RE sector. It

promoted a culture of innovation in which employees were encouraged to challenge the status
quo and strive for continuous improvement. In-house teams worked on emerging technologies
such as floating solar, storage and hydrogen. ReNew also positioned itself as a thought leader in
the sector by leading discussions and supporting research on emerging technologies that could

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 10 of 23 A00458

take the clean-energy sector to the next level. For example, ReNew established a collaboration
with IIT Delhi to support research in clean energy and the environment on the latter’s campus.
ReNew established a centre of excellence to develop state-of-the-art solutions and technologies
for sustainable and climate-compatible growth.

In addition, ReNew established a modern facility called ReNew Power Diagnostic Centre (RPDC)
at its headquarters in Gurgaon. At this facility, predictive maintenance of assets could be
performed through real-time monitoring of data, data analytics and generation of custom alerts.
The objective was to maximise yield from assets and increase their reliability over their life cycle.
ReNew also tested and implemented several technologies—robotic module cleaning and drone-
based thermal imaging—that led to high machine availability of wind turbines. The use of the
latest and efficient solar modules and trackers for solar projects helped increase the yield of solar
assets.

In September 2019, ReNew undertook a new initiative called ReD (ReNew Digital) and partnered
with McKinsey to achieve digital transformation. The objective was to generate cost-savings and
increase revenues by using digital technologies to improve the operational or process efficiency.
These initiatives helped ReNew to reduce O&M costs and increase the output from solar and
wind plants. For example, wind turbines yielded more than 5% additional output because of
quicker loss identification and rectifications. Similarly, solar units were able to generate higher
output because of a reduction in the loss of output caused by shadowing and soiling of panels.
Early detection of problems in the units led to less unplanned maintenance, increased efficiency
of O&M personnel, lower lead time for spares and, consequently, the requirement for a smaller
inventory of spares. ReNew expected similar gains in financial processes as a result of the use of
technology for aggregating and analysing financial data generated within the firm.

Acquisition of Climate Connect in April 2020; ReNew Prepares for a Digital Future

By mid-2020, ReNew had acquired Climate Connect, a young artificial intelligence, digital
analytics and machine learning software start-up specialising in the power sector. Climate
Connect was expected to add value as load forecasting was becoming commonplace and could
not be a source of competitive advantage in the future. With its AI/ML capabilities, Climate
Connect could keep ReNew ahead of its competitors. Further, the Climate Connect team was
expected to contribute to ReNew Power’s ongoing digital transformation programme that had
been launched earlier.

Strengthening the Team and Building the Culture

Realising that people were the most valuable asset for the business, Sumant and Vaishali had
invested in building a strong organisational culture and a winning team. From the early days
when the company was young, they focussed on employee engagement through various
initiatives. They ensured that employees across functions and locations remained connected and
aligned to a common set of missions and values. ReNew employees valued working for a
company that contributed to a better planet and were sensitive to the needs of those around them
who were less fortunate. This thinking promoted a culture of “giving back” and became a strong
binding force for employees at ReNew.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 11 of 23 A00458

Over time, ReNew sought to build a result- and outcome-oriented culture, in which employees
were encouraged to take full ownership and responsibility of tasks assigned to them. A
collaborative style of working was promoted, and silos were discouraged. Employees were
empowered to make decisions at their level without being afraid of failure and were encouraged
to think out of the box, innovate and challenge the status quo. There was a conscious emphasis
on transparency and trust, for which several internal communication channels were established.
At regular intervals, the chief managing director (CMD) and other members of the management
committee interacted with various groups of employees, disseminating critical information and
addressing their concerns. Considerable focus was given to capability building and skill
development. Numerous training programmes provided employees with opportunities to
upgrade their skills and take on new challenges. ReNew periodically launched initiatives to
strengthen its processes and systems in order to pursue organisational excellence. High-
performers and those who demonstrated the organisational values were recognised and
rewarded to create internal role models. “ReNewers Day,” an annual event spread over two days
was organised. More than 1,000 employees from all over India gathered to celebrate the
achievements of the past year; it was also an occasion to inform them about the organisation’s
new priorities. During the event, various business functions shared updates on their key
activities. The CMD addressed the employees and shared his assessment of the past year,
including successes and failures, and assessment of the year ahead.

ReNew sought to create a culture that would help the company build a successful business and
become a good corporate citizen. ReNewers were encouraged to adopt sustainable lifestyles and
conduct their business in a sustainable manner through judicious use of water, energy and power.
All projects were subjected to a rigorous environmental impact assessment before final approval.

Growth from 2015 to 2019

ReNew witnessed a phenomenal growth in assets, doubling its operational capacity for three
consecutive years from 2015 to 2018. Sumant and his team believed that several factors were
responsible for this growth. Sumant thought that the team had been swift to seize emerging
opportunities and had built the capacity to do so confidently. In his own words:

First, is the speed with which decisions are taken at ReNew. Once we see a good
opportunity and if the commercials are making sense, there was no dragging our
feet, and we quickly sought approval from Goldman Sachs to move ahead with
the project. We are also quite agile in our operations, which helps us react and
respond quickly to new opportunities. Secondly, we had equity already lined up
with us compared to other IPPs who had to look around for funding after winning
a project, and only after securing finances could they sign the PPA. Equity was
already parked with us, so that helped us get project finance quicker. The third
factor was our team’s expertise and rich experience in wind projects. Our team
was well versed in wind technology and had a thorough knowledge of most of the
sites and their potential, thus enabling us to wrap up due diligence much quicker
than others. Another key factor was the excellent working relationship with
OEMs; we worked with them as partners. We followed a practical approach. Even
for turnkey projects where our role would traditionally be only to give the money
and supervise, we chipped in to help OEMs with project execution as well. We

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 12 of 23 A00458

were taking practical and speedy calls; we were not adamant about technical
specifications but were fine with workable solutions.

According to the team, another factor that gave ReNew an edge over the competition was the
groundwork that the team had carried out in every state before the announcement of a policy.
For example, in the feed-in tariffs era, the state regulatory commission used to set a fixed tariff.
Later, the states typically announced a policy indicating the planned addition of wind energy-
based capacity over the next two to three years. To get a head start, ReNew carried out site studies,
blocked land, performed wind measurements and waited for the policy. As soon as a policy was
announced, ReNew was ready to sign the PPA and develop the project. Its competitors would
start due diligence only after the policy announcement, which reduced the time available to them
for executing a project.

ReNew thought that the qualified professionals in its team were a clear differentiator relative to
its competitors. The team had acquired experience in structuring the most complex bids over
time. They had also been considerably aware of and successful in round-the-clock and peak-
power auctions when the buyers had sought such procurement in the recent past. The team was
confident that it could respond to future bids that were expected to be more innovative than the
plain-vanilla capacity tenders of the past.

Financing Growth

Right from its inception, ReNew targeted and achieved a very high growth rate. To achieve this
growth rate, a continuous injection of equity and debt was required. After receiving initial
funding from GS, ReNew was successful in obtaining PE investments from the Asian
Development Bank (ADB), the Global Environment Fund (GEF), the Abu Dhabi Investment
Authority (ADIA), the Canadian Pension Plan Investment Board (CPPIB) and Japan’s Energy for
a New Era (JERA) at a successively higher valuation.

ReNew worked with a target debt-to-total-capital ratio of approximately 75–80%. It decided to

use project finance for each of its projects. Therefore, debt had to be frequently mobilised to
support growth. Initially, ReNew relied on sector-focussed lenders such as PTC India Financial
Services Limited (PTC Finance), Indian Renewable Energy Development Agency Limited
(IREDA), L&T Infrastructure Finance Company Limited (L&T Infra) and banks such as the State
Bank of India (SBI). By 2020, ReNew had used different borrowing channels, mainly based on
cost and availability. It had used India Infrastructure Finance Company Limited (IIFCL)
guarantees (partial) to mobilise debt through bonds, borrowed from mutual funds through credit
risk funds, obtained credit lines from Overseas Private Investment Corporation (OPIC) and used
external commercial borrowings (appropriately hedged) to borrow from overseas investors.

Growing Organically and Inorganically

With rapid growth in the Indian RE sector (see Exhibit 1a for capacity growth and Exhibits 3a and
3b for the Indian government’s target for 2022 and projections for 2030, respectively), many
opportunities were available, and accordingly, ReNew began to focus on solar energy-based
generation projects as well. However, the expanding opportunities also brought in new
competitors and intense competition (see Exhibit 4 for the financial performance of ReNew Power
and Exhibit 5 for information on leading players in wind and solar PV energy generation). Despite

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 13 of 23 A00458

being cautious about bidding aggressively in its efforts to grow, ReNew faced increasing
competition in the sector as bidding became very aggressive by 2017–18. If the tariff quote became
aggressive and returns seemed below the hurdle rate, ReNew refrained from bidding in most of
these cases. “It was tempting to bid aggressively to build the size but we were never aggressive
beyond the price point below which we were not certain of adding value to our shareholders,”
reflected Sumant.

To continue to grow and acquire scale and sizeable market share, ReNew explored the possibility
of acquiring existing assets if they were valued attractively rather than building new assets that
offered lower returns. Its search for fairly valued assets led to the acquisition of Ostro Energy
with a capacity of 1,108.10 MW for approximately INR 100 billion during 2017–18, thus raising
ReNew’s capacity to 3.92 GW by the end of that fiscal year. ReNew realised that it was bidding
for projects at 8× the EBITDA, whereas the assets of Ostro were available at a much lower
multiple. At that time, ReNew had been raising new equity at a slightly higher multiple than the
one at which it was bidding; therefore, the acquisition was value-accretive for the existing
shareholders.

Challenges and Opportunities Ahead

In 2020, the RE-based electricity generation sector was plagued by the financial difficulties of
distribution companies (discoms), which purchased power generated from IPPs such as ReNew
(see Exhibit 6). When discoms fail to pay dues to IPPs, a liquidity crunch occurs throughout the
value chain. IPPs are unable to discharge their debt obligations and unable to make fresh
investments, resulting in a negative signal to investors. Frequent run-ins with state governments
occur, and they need to be tactfully managed. Land acquisition laws in several states cause
aggravating delays in project commissioning. There have been instances of policy reversals, with
newly elected governments threatening to annul PPAs and tariffs negotiated by previous
administrations. Sometimes, states may resort to power curtailment, because of which an IPP’s
calculations could go haywire; numerous rounds of discussions are then required—with the state
government to find a lasting solution, and with investors to allay their concerns.

Strategically, ReNew, a developer in the renewable energy space in India, saw huge opportunities
for growth, given the government’s ambitious plans to increase the proportion of clean energy in
the electricity sector. Furthermore, the electricity sector itself was undergoing transformation,
with the distribution/supply business slated to be open for the private sector. The move towards
market-based economic dispatch (MBED) 4 rather than self-scheduling of dispatch based on long-
term contracts was expected to benefit renewable generation as it would be treated as “must-
run” 5 capacity.

Going forward, ReNew could geographically diversify its RE business or straddle the sectoral
value-chain by entering the distribution business as in the case of some electric utilities of Europe,
which had invested in renewable energy-based generation capacity. Another option that ReNew

4
Under the MBED system, the power requirement of all the states would be met through a central pool. The MBED
system would establish the lowest and uniform power price throughout the country by ensuring that the cheapest
generating resources across the country were dispatched to meet the overall system demand. As the variable cost of
renewable generation was the lowest, this RE generation capacity would have priority over the other plants based on
non-renewables.
5 A must-run power plant is one that must supply electricity to the grid under all circumstances.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 14 of 23 A00458

considered was an entry into the wind-turbine or solar-module manufacturing business. While
building capacity for developing and manufacturing wind turbines and solar modules was likely
to suffer from scale disadvantage unless ReNew could become a global supplier, it did have the
benefit of minimising reliance on imports and the associated supply disruptions. The equipment
and solar modules imported from China could become an issue in the future owing to a
deterioration in the India–China relationship on account of trade imbalance (India had been
running trade-deficit with China) and/or security considerations (the border between India and
China had been a matter of dispute for more than five decades, and one war had been fought
between the two countries in 1962).

If ReNew Power entered the distribution business, it would have to develop customer-facing
operational competencies afresh. Although it already had experience in dealing with stakeholders
such as state governments, regulators and ground-level government functionaries, it had not
been in customer-facing businesses, unlike some of its competitors such as Torrent Power (which
managed Ahmedabad-Gandhinagar and Surat licence areas, and Agra, Bhiwandi, and a few other
areas as a franchisee), Tata Power (which had a distribution licence in Mumbai and New Delhi,
and operated as a franchisee in Ajmer, a city in Rajasthan) or Calcutta Electric Supply Corporation
(CESC) (which managed the licence area of Kolkata (formerly known as Calcutta) and a few other
areas as a franchisee). However, given the inefficiencies in the existing public-sector distribution
and the lack of a takeover threat (ReNew was unlisted and even other companies had a large
shareholder called promoter), any new entrant was expected to have the time to develop the
required competencies for efficient distribution/supply of electricity.

ReNew could also limit itself to the transmission sector in which it could use its project execution
capabilities to construct and make available transmission lines and substations to the
transmission system as a transmission licensee. The transmission sub-sector has been open for
private-sector participation on the basis of competitive bidding, wherein the lowest annuity
bidder gets the licence to build the lines and maintain it over 25–35 years at its cost.

Sumant wanted his team to deliberate and decide on the future course for ReNew. With regard
to funding, ReNew could release some of its capital by selling its operating assets or placing them
in Infrastructure Investment Trusts (InvITs). Its shareholders had been supportive so far and
ReNew believed that if it could convince them about its strategy, they would be willing to commit
additional capital. ReNew also had plans for an IPO listing, which would give it further flexibility
in raising capital.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 15 of 23 A00458

Exhibit 1a: Growth in RE Generation in India (in MW)

Source 2014–15 2015–16 2016–17 2017–18 2018–19 2019–20

Large hydro 129,244 121,377 122,313 126,134 135,040 155,970
Small hydro 8,060 8,355 7,673 5,056 8,703 9,366
Solar 4,600 7,450 12,086 25,871 39,268 50,103
Wind 28,214 28,604 46,011 52,666 62,036 64,639
Biomass 14,944 16,681 14,159 15,252 16,325 13,843
Other 414 269 213 358 425 366
Total 191,025 187,158 204,182 227,973 261,797 294,288
Total utility power 1,105,446 1,168,359 1,236,392 1,302,904 1,371,517 1,385,114
% Renewable power 17.28 16.02 16.52 17.50 19.1 21.25

Source: Compiled by the authors, from multiple reports published by the Central Electricity Authority, Government of
India

Exhibit 1b: Growth in Installed RE Capacity in India (in MW)

Source: Growth in Electricity Sector in India 1947-2020, Central Electricity Authority, Government of India

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 16 of 23 A00458

Exhibit 1c: Growth in Installed RE Capacity of ReNew

Wind Capacity (GW) Solar Capacity (GW)

10.2 GW

5.4 GW
4.6 GW
3.9 GW
4.8 GW

2.0 GW
1.0 GW
0.4 GW 0.5 GW
0.03 GW 0.1 GW

FY 12 FY 14 FY 16 FY 18 FY 20 Total (FY23E)

Source: Company documents

Exhibit 2a: Historical Summary of Energy Information Administration’s Levelized Cost of Energy
(EIA’s LCOE) projections (2010–2020)

Estimate in Conventional Natural gas combined Nuclear Wind Solar

$/MWh coal cycle advanced

in the for Conventional Advanced Onshore Offshore PV CSP

year the
year

2010 2016 100.4 83.1 79.3 119.0 149.3 191.1 396.1 256.6
2011 2016 95.1 65.1 62.2 114.0 96.1 243.7 211.0 312.2
2012 2017 97.7 66.1 63.1 111.4 96.0 NA 152.4 242.0
2013 2018 100.1 67.1 65.6 108.4 86.6 221.5 144.3 261.5
2014 2019 95.6 66.3 64.4 96.1 80.3 204.1 130.0 243.1
2015 2020 95.1 75.2 72.6 95.2 73.6 196.9 125.3 239.7
2016 2022 NB 58.1 57.2 102.8 64.5 158.1 84.7 235.9
2017 2022 NB 58.6 53.8 96.2 55.8 NB 73.7 NB
2018 2022 NB 48.3 48.1 90.1 48.0 124.6 59.1 NB
2019 2023 NB 40.8 40.2 NB 42.8 117.9 48.8 NB
2020 2025 NB 36.61 36.61 NB 34.10 115.04 32.80 NA
Nominal NB −56% −54% NB −77% -40% −92% NB
change
2010–2020

Note: Projected LCOE values are adjusted for inflation and calculated on constant dollars based on two years prior
to the release year of the estimate. Estimates given without any subsidies. Transmission costs for non-dispatchable
sources are on average much higher. NB = “Not built” (No capacity additions are expected); NA= “Not applicable”

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 17 of 23 A00458

Source: US Energy Information Administration (March 2022). Levelized costs of new generation resources in the
Annual Energy Outlook 2010-2018 and 2021, as cited in Cost of electricity by source. (n.d.). In Wikipedia. Retrieved
March 24, 2021, from https://en.wikipedia.org/wiki/Levelized_cost_of_electricity

Exhibit 2b: Historical Price Trend of Silicon PV Cells

Source: Bloomberg, New Energy Finance, as cited in the Economist, Nov 21, 2012. Retrieved March 24, 2021, from
https://www.economist.com/news/2012/11/21/sunny-uplands

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 18 of 23 A00458

Exhibit 3a: Installed Grid Interactive RE Capacity✳ as on September 30, 2020, in India

Source Total installed 2022 target

capacity (MW) (MW)
Wind power 38,124.15 60,000
Solar power 36,050.74 100,000
Biomass power (biomass & gasification and bagasse cogeneration) 10,145.92 *10,000
Waste-to-power 168.64
Small hydropower 4,739.97 5,000
TOTAL 89,229.42 175,000
*Corresponds to the target for “bio-power,” which includes biomass power and waste-to-power generation
✳The total installed capacity as on September 30, 2020, was 370,106.46 MW.
Source: Compiled by the authors from various sources

Exhibit 3b: Installed Capacity as on March 31, 2020, in India, and Optimal Capacity Mix Forecast
for March 31, 2030

31.3.2020 31.3.2030
Fuel type
MW % MW %
Hydro* 50,382 13.6 73,445 8.8
Coal + Lignite 205,135 55.4 266,827 32.1
Gas 24,955 6.8 24,350 2.9
Diesel 510 0.1 - 0.0
Nuclear 6,780 1.8 16,880 2.0
Solar 34,628 9.4 300,000 36.1
Wind 37,694 10.2 140,000 16.9
Biomass 10,023 2.7 10,000 1.2
Total 370,106 100.0% 831,502 100.0%
*including small hydro of 5,000 MW and hydro imports from Bhutan
Source: The data for 2020 were obtained from the Central Electricity Authority publication titled “All India Installed
Capacity as on 31.3.2020”. The data for 2030 were obtained from “Draft Report on Optimal Generation capacity mix
for 2029-30” by the Central Electricity Authority.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 19 of 23 A00458

Exhibit 4: Abridged Consolidated Financial Statement

(A) Consolidated Profit and Loss Account (for the year ending March 31)
(Values in INR million)

Description 2019 2018 2017 2016 2015 2014

Net Sales 43,144 24,617 13,073 6,136 4,366 2,910
Expenditure:
Power Generation & Distribution Cost 81 522 4 17
Employee Cost 1,008 796 512 163 478 84
Operating Expenses 2,667 1,600 968 482 325 14
General and Administration Expenses 1,799 1,535 741 344 256 156
Selling and Distribution Expenses 8 47 8 7 2 1
Miscellaneous Expenses 727 228 170 57 22 65
Total Expenditure 6,290 4,728 2,403 1,054 1,099 320
Operating Profit (Excl. OI) 36,854 19,889 10,670 5,082 3,267 2,590
Other Income 4,758 3,178 2,434 1,274 951 320
Operating Profit 41,612 23,067 13,104 6,356 4,217 2,910
Interest 26,811 15,102 8,258 4,433 2,947 1,765
PBDT 14,801 7,965 4,845 1,923 1,270 1,145
Depreciation 12,459 7,124 3,828 2,085 1,593 1,002
Profit Before Taxation & Exceptional Items 2,342 841 1,018 –161 –322 144
Exceptional Income / Expenses 1,171
Profit Before Tax 2,342 841 1,018 1,010 –322 144
Provision for Tax 1,273 321 508 97 94 125
Profit After Tax 1,069 520 509 913 –417 19
Minority Interest –39.00 –171.12 –96.71 0.88 –14.00
Share of Associate –230.00 –220.00
Consolidated Net Profit 800.00 300.00 338.24 816.44 –415.65 4.94
Adjusted EPS 2.11 0.80 1.00 3.13 -2.06 0.03
Source: Ace Equity

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 20 of 23 A00458

(B) Consolidated Balance Sheet (as on March 31) (Values in INR million)

DESCRIPTION 2019 2018 2017 2016 2015 2014

Share Capital 3,799 3,772 3,384 2,608 2,016 1,696
Share Warrants 0 0 536 0 0 0
Total Reserves 68,908 67,493 49,796 32,280 19,810 15,966
Shareholder’s Funds 72,707 71,265 53,715 34,888 21,826 17,662
Minority Interest 3,628 3,414 3,126 1,665 25 25
Long-Term Borrowings
Secured Loans 2,48,189 2,08,650 55,015 51,775 28,512 20,066
Unsecured Loans 5,596 638 47,431 128 147
Deferred Tax Assets / Liabilities 4,293 4,384 –983 –580 –411 0
Other Long-Term Liabilities 3,826 2,561 980 600 417
Long-Term Provisions 72 47 25 12 7 4
Total Non-Current Liabilities 2,61,976 2,16,280 1,02,467 51,936 28,525 20,217
Current Liabilities
Trade Payables 3,029 2,735 2,396 330 219 196
Other Current Liabilities 34,159 30,974 21,563 12,654 7,114 2,735
Short-Term Borrowings 20,657 19,365 16,576 4,881 1,943 496
Short-Term Provisions 214 212 79 21 5 3
Total Current Liabilities 58,059 53,286 40,614 17,887 9,281 3,430
Equity and Liabilities 3,96,370 3,44,245 1,99,923 1,06,376 59,657 41,335
Non-Current Assets
Gross Block 3,28,759 2,87,627 1,34,955 64,017 35,745 29,432
Less: Accumulated Depreciation 25,462 13,024 5,911 2,085 2,766 1,171
Net Block 3,03,297 2,74,603 1,29,044 61,933 32,979 28,261
Capital Work in Progress 16,273 7,444 19,095 13,371 7,884 3,236
Intangible Assets under Development 6 1,424 12
Non-Current Investments 897 1,643
Long-Term Loans & Advances 18,856 5,623 9,178 9,790 6,125 1,009
Other Non-Current Assets 3,624 4,278 1,215 2,710 1,069 539
Total Non-Current Assets 3,42,953 2,95,015 1,58,532 87,804 48,069 33,045
Current Assets, Loans & Advances
Current Investments 9,269 6
Inventories 719 153 14 67
Sundry Debtors 19,276 6,701 4,841 3,200 734 518
Cash and Bank 25,500 24,236 31,646 13,539 10,046 6,271
Other Current Assets 3,371 4,792 871 1,449 687 1,403
Short-Term Loans and Advances 4,551 4,079 4,012 385 120 29
Total Current Assets 53,417 49,230 41,390 18,572 11,587 8,290
Assets 3,96,370 3,44,245 1,99,923 1,06,376 59,657 41,335
Adjusted Book Value per Share (INR) 191.38 188.93 157.17 133.75 108.25 104.13
Source: Ace Equity

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 21 of 23 A00458

(C) Consolidated Cash Flow Statement for the Year Ending March 31
(Values in INR million)

Description 2019 2018 2017 2016 2015 2014

Profit Before Tax 2,303 841 1,018 1,010 –322 144
Adjustment 38,786 21,348 11,466 5,884 4,762 2,486
Depreciation 12,459 7,124 3,828 2,084 1,593 1,002
Interest Expenses 25,912 14,418 7,640 4,201 2,930 1,754
Profit/Loss on Sale of Fixed Assets 197 53 0
Profit/Loss on Sale of Investments –272 –278
Interest Income –1,393 –1,152 –1,027 –831 –627 –290
Provision & Written Off 523 281 96
Provision for Doubtful Debts &
Advances 1 6
Other Adjustments 1,359 896 1,025 335 867 21
Changes in Working Capital –10,936 –1,160 –2,686 –2,855 –941 –1,700
Trade & Other Receivables –8,748 –39 –1,639 –2,466 –215 –423
Inventories –565 –140 –14 66 –11
Loans & Advances –56 –1,000 –3,735 –643 436 –1,242
Trade & Other Payables –1,564 –300 2,851 122 –383 –24
(Inc) / Dec in Other Non-Current
Assets –19 319 –176 132 –845
Inc / (Dec) in Other Non-Current
Liabilities 16 27
Cash Flow after Changes in Working
Capital 30,153 21,029 9,798 4,040 3,499 930
Tax Paid –1,905 –1,118 –804 –484 –45 –165
Cash From Operating Activities 28,248 19,911 8,994 3,556 3,453 764
Cash Flow from Investing Activities
Purchase of Fixed Assets –61,117 –52,297 –67,839 –34,647 –11,938 –11,937
Purchase of Investment –2,622 –10,161 –14,205 –126
Sale of Investment 9,540 7,983 4,693 528
Investment in Subsidiaries –1,243
Interest Received 1,246 1,009 1,183 640 625 270
Other Investment Activities –941 –43,128 –1,459
Cash from Investing Activities –53,894 –1,04,577 –59,917 –43,520 –10,912 –13,126
Cash from Financing Activities
Increase / (Decrease) in Loan Funds 61,234 9,472
Proceeds from Long-Term
Borrowings 1,09,135 90,781 46,066 8,021
Repayment of Long-Term
Borrowings –62,134 –23,061 –22,393
Short-Term Loans 283 2,308 2,938 2,629
Proceeds from Issue of Equity 560 16,053 19,877 13,204 4,194 6,551
Interest Paid –26,493 –14,641 –6,695 –4,092 –3,208 –1,746
Other Financial Activities 496 1 14 –94
Cash from Financing Activities 21,847 71,441 74,430 35,722 11,635 14,183
Net Cash Inflow / Outflow –3,799 –13,225 23,508 –4,243 4,177 1,821
Opening Cash & Cash Equivalents
(CCE) 13,914 27,139 3,631 7,874 3,697
CCE on Amalgamation / Takeover /
Merger 1,876
Closing Cash & Cash Equivalent 10,115 13,914 27,139 3,631 7,874 3,697
Source: Ace Equity

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 22 of 23 A00458

Exhibit 5: Leading Private Developers of Solar and Wind Capacity in India as on June 30, 2020

Solar PV Wind
Developer Capacity (MW) Developer Capacity (MW)
ACME Solar 2,900 ReNew Power 2,957
ReNew Power 2,352 Greenko Energy 2,318
Adani Green 2,198 Sembcorp 1,730
Greenko Energy 2,175 Mytrah Energy 1,350*
Azure Power 1,809 Tata Power 932
Tata Power 1,704 CLP 925

*Projects awarded by SECI and NTPC in 2018 were assumed to not have reached commissioning due to
land acquisition issues.

ACME Solar: ACME Solar was India’s largest solar IPP, with a portfolio of solar power projects of more
than 5,500 MW overall, of which 2,900 MW capacity was operational, and 2,600 MW capacity was under
development. ACME was part of a Delhi-based group that had started business in 2003 and was led by a
first-generation entrepreneur. It entered the solar PV business in 2011 and had a presence in 12 Indian
states—Uttarakhand, Gujarat, Chhattisgarh, Telangana, Karnataka, Punjab, Bihar, Uttar Pradesh, Odisha,
MP, Rajasthan and AP. It had also been working on lithium-based energy storage solutions for a few years
and had developed the capabilities to manufacture lithium batteries from the cell level.

Adani Green: Adani Green was part of a business group that had been founded in 1988 by Mr Gautam
Adani, and that had evolved to become one of India’s largest family business groups and a leading
infrastructure and utility conglomerate. By 2020, the Adani Group had interests in power generation and
distribution, coal mining, trading, ports and airport operations, logistics, and gas distribution. The group
also owned India’s largest commercial port and the largest single-location, private-sector thermal IPP.
Adani Green was incorporated in 2015 to take over the solar and wind projects being developed by the
other group companies. In addition to the operational projects mentioned above, it had more than 9,000
MW capacity under development. In the electricity sector, it had an interest in distribution in Mumbai and
more than 10,000 MW of fossil fuel-based generation capacity in addition to being a transmission licensee
for a few lines. The website of Adani Green outlined its goal of having more than 25,000 MW of RE capacity
by 2025. The company had the capacity to manufacture/assemble solar modules of up to 2,000
MW/annum.

Tata Power: Tata Power was an integrated player in the Indian electricity sector and was part of one of
the top business groups in India—the House of Tatas. The business group had a presence in automobiles,
steel, chemicals, consumer goods, hotels and IT services. Tata Power started as a conventional generator
(thermal and hydro) with production facility close to Mumbai more than 100 years ago, with a licence for
distribution in Mumbai. It entered the customer-oriented distribution and supply business by winning one
of the three areas opened up for privatisation by the Delhi government. Later, it started retail supply in the
Mumbai area. It also won the competitively bid coastal imported coal project in Mundra, which had run into
financial difficulties because of changes in the coal export price in the Indonesian legislation.

Greenko Energy: Greenko was a PE-funded Hyderabad-based company, founded in 2006. The long-
term strategy of Greenko was to build or acquire low-emission, low-waste, integrated bio-energy
complexes to support India’s energy demand and security while adding value to the mandatory European
Emission Trading Scheme (EU ETS). Initially, the company focussed on consolidating biomass power
assets, but it quickly saw the potential of other renewable energy sources such as hydro and wind power.
The company also initiated Integrated Renewable Energy Storage Projects in the states of AP, MP and
Karnataka.

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.
 23 of 23 A00458

Exhibit 6: State of Financial Health of Electricity Distribution Companies in India

2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19

Discom Loss on
Subsidy Received Basis
(INR billion) 716.21 682.57 569.39 486.19 387.45 335.94 613.60
Subsidy Received (INR
billion) 361.00 367.58 455.84 745.15 789.38 889.19 986.53
Gap (ACS−ARR) on
Subsidy Received
Basis# (INR/KWh) 0.84 0.78 0.58 0.48 0.37 0.30 0.52
Accumulated Losses as
per Balance Sheet (INR
billion) 2,537.00 3,063.17 3,585.81 4,139.33 4,117.53 4,408.26 4,886.86
Total Outstanding Debt
(INR billion) 3,042.28 3,650.66 4,038.16 4,219.78 4,169.57 4,547.73 4,784.52

AT&C losses (%) 25.48 22.62 25.72 23.96 23.50 22.33 22.01
Outstanding Dues (as
on last month of FY) by
Discoms (INR billion) NA NA NA NA 317.04 420.63 666.52
#ACS: Average Cost of Supply; ARR: Average Realisable Revenue

Source: Garg, V., & Shah, K. (2020, August 1). The curious case of India’s discoms. Institute for Energy Economics
and Financial Analysis. Retrieved December 15, 2021, from https://ieefa.org/resources/curious-case-indias-discoms

This document is authorized for use only in Prof. Manjari Singh and Prof. M. P. Ram Mohan's Senior Management Programme (SMP) Batch - 12 at Indian Institute of Management -
Ahmedabad from Oct 2024 to Dec 2024.