The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Jan 7 (Reuters Breakingviews) - ReNew Energy Global’s RNW.O bid to go private may yet heat up. A consortium that owns 64% in the New York-traded Indian clean-energy producer is offering an 11% premium to the undisturbed stock price to buy the rest of the shares it doesn't hold. While there is no word yet on a subsequent listing in Mumbai, the prospect of one will be front of mind for current investors.

India’s second-largest green energy firm by capacity, ReNew listed in 2021 on Nasdaq via a special purpose acquisition company, paving the way for longtime backer Goldman Sachs GS.N to exit two years later. The share price performance has underwhelmed. ReNew is trading at a 32% discount to the price at which it went public: founder and CEO Sumant Sinha grumbled in an interview last year about public markets valuing renewable groups poorly.

Sinha has joined forces with fellow investors Canada Pension Plan Investment Board and a unit of Abu Dhabi Investment Authority, along with the United Arab Emirates-based Masdar, which currently doesn't own ReNew stock, to make an offer of $7.07 per share, implying a market capitalisation of $2.82 billion, per Breakingviews calculations. Adding on net debt, ReNew’s enterprise is worth nearly $10 billion, or 11 times its forecast adjusted EBITDA for the year ending March 2025.

If Sinha follows through on his stated plan to consider moving the listing, Renew could probably secure a much higher valuation in India. Applying larger peer Adani Green Energy’s ADNA.NS multiple of 21 times EBITDA for the year to March 2025 to ReNew would value its debt and equity at more than $18 billion.

Prospective sellers will find that comparison hard to shake off. An India listing makes sense because the country is home to a chunk of ReNew’s operations. Meanwhile, renewable power suppliers, once unloved locally, are sharing the spoils of rich domestic equity valuations. State-backed NTPC Green Energy NTPG.NS enjoyed one of the most successful debuts in 2024: the stock jumped 14% on its first day of trade in November.

ReNew’s U.S. shareholders may yet press the consortium for a bigger payout. To succeed, the offer will need the support of 75% of voting shareholders by size of holdings and also a majority of shareholders by number. That leaves some room for a bumpy transition.

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CONTEXT NEWS

A consortium of shareholders in Nasdaq-listed clean power producer ReNew Energy Global made a non-binding offer on Dec. 10 to take the company private.

The group is comprised of Canada Pension Plan Investment Board, Abu Dhabi Investment Authority, and ReNew Chair Sumant Sinha, who control a combined 64% of shareholder votes in the company, along with the United Arab Emirates-based Masdar, which joins the consortium as a new investor.

The offer price of $7.07 for each share represents an 11.5% premium to the last traded price and values ReNew at $2.82 billion, according to Reuters calculations.

(Editing by Una Galani and Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/shritama.bose@thomsonreuters.com))