ReNew Energy Global Plc (RNW) Earnings Call Transcript & Summary

Hello. This is the Chorus Call conference operator. Welcome, and thank you for joining the ReNew update conference call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Anunay Shahi, Senior Vice President and Investor Relations of ReNew. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us today. You would have seen yesterday our 6-K published in response to the consortium's 13D filings. A copy of the 6-K is available in the Investor Relations section on ReNew's website at www.renew.com. With me today are Sumant Sinha, Founder, Chairman and CEO of ReNew; Kailash Vaswani, our CFO; and Manoj Singh, our Lead Independent Director and Head of the Special Committee. Following a short set of prepared remarks, we will open the call for questions. I will now hand over to Kailash Vaswani.

Thanks Anunay. As you will have seen from CPP and ADIA's 13D filings yesterday, Masdar has withdrawn from the consortium and therefore, the remaining consortium members will not be pursuing the transaction further. As such, all discussions regarding the proposed transaction has been terminated. We are naturally disappointed that Masdar chose to withdraw from the consortium after such a long process, taken roughly a year from the process becoming public in December 2024. As noted in the previous updates given through the process, due diligence was complete and negotiations on the transaction agreement was substantially progressed. We would have also -- we would also note after the consortium's 13D filings on October 10, 2025, that each of the consortium members had been given regular updates to their internal committees, and they were working towards announcing a binding transaction. We were informed over the weekend that Masdar had withdrawn from the consortium. At that time and as per the consortium's 13D filings, no rationale for Masdar's withdrawn was given. Nonetheless, we note that Sumant and our major shareholders, CPPIB and ADIA have reaffirmed their confidence in the business and its prospects. As indicated in the company's 6-K, the Board remains committed to delivering value for all shareholders and the company is actively evaluating options for realizing value from their various parts of its businesses. I will now hand over to Sumant for his remarks.

Yes. Thank you, Kailash, and thank you to everyone for joining the call today. While I do share the disappointment with Masdar's withdrawal from the consortium, I should also say that as a CEO of the company, I continue to remain very excited about the growth prospects of ReNew and the various value enhancement opportunities within the company. I do want to highlight as well that this announcement does not have any impact on the business. It is important to note that the transaction was a potential purchase of shares by the consortium from the non-consortium shareholders. ReNew's portfolio remains fully funded through a combination of internal cash flows and capital recycling and our liquidity position remains robust as of today with more than $1 billion of cash available to us. I also wanted to emphasize that CPPIB, ADIA and I continue to remain absolutely committed to ReNew. Our business continues to grow meaningfully, and we have also reaffirmed our megawatt and EBITDA guidance for the year. And I'm also excited by the long-term growth prospects of ReNew. In addition, our leverage also continues to decline. We have been also delivering PAT in successive quarters. Our continued emphasis will be to deliver and enhance shareholder value. We have various parts of our business which has matured significantly and weak scale over the last few years. We will provide further updates on our growth prospects in our next earnings call. We are open to receiving feedback from all of you, and we'll be happy to engage with you to understand how we can create long-term shareholder value. With that, we would be happy to take any questions. Anunay, over to you. Thank you.

Thank you, Sumant. The first question we have is from Justin Clare at ROTH Capital Partners.

Can you hear me, okay?

Yes.

Okay, perfect. Yes, I guess, I was wondering first, if you could share any additional context or insight into the potential reason Masdar decided to withdraw from the consortium. Were there any particular unresolved issues between Masdar and the special committee that could have potentially resulted in the exit.

Manoj, would you like to take that?

Sure. I'd be happy to. Good morning, greetings to all of you. So first of all, maybe just probably perhaps many of you will have similar questions. I'll provide a slightly expanded response, if it's okay with you. As Kailash said, and all of you know, this whole process has lasted well into a year, 12 months or maybe a little bit longer. And there has been a lot of intense exchange of information, negotiations, discussions, et cetera. Over the course of this time, the price has moved 3 or 4x, as you all are well aware. And also very, very extensive and comprehensive due diligence, operational, financial, of the management team, the assets deployed, the assets yet to be deployed. Perhaps the most significant due diligence that this company has been subjected to. And there were no issues that came out of their due diligence that were not resolved or that were of any concern. So over the course of this and the special committee and me specifically, was in regular touch with Masdar's representative. And the -- at the time of the nonbinding offer, which I believe was in mid-October, basically, the only thing that was remaining was essentially finalization of documentation and this was directly represented to me and to us by them. And also the internal approvals for the other consortium members, which, as Kailash alluded, has progressed pretty well and was at its final stages. So there were really no open issues. There were no differences of any nature that would have resulted in the outcome that we heard over the weekend. The final series of activities were certain items in the transaction agreement. None of them were deal breakers actually to maybe use some of the precise works that Masdar was using. So all of that is progressing pretty well. And so this was, as we have represented, it was disappointing and perhaps I think would be another word.

Okay. Got it. And then -- so I guess just with the current transaction off the table, wondering if you talk through other potential strategic options that the Board might be considering and we did see a pretty meaningful decline in the share price after the announcement yesterday. So wondering how the Board and management might be thinking about priorities for capital allocation and the potential for share repurchases?

I'll let Sumant provide an expanded response. But just first of all, this has just happened, as you know. And I'll say 2 or 3 things. Like any prudent and forward looking Board, we have been prepared for any eventuality. So we have always had a plan if this were not happen. And now what the Board needs to do is to come together and basically work on developing and executing that plan. And the leadership team will be in a position to share more of that in the ensuing weeks and months. But as Sumant indicated, we feel very confident that the business continues the way it is. The operations are fine, the projects that are underway are funded and we will have a plan to raise additional capital over the ensuing years. I'll let Sumant expand on that question.

Yes. Manoj. Look, Justin, I think that as Manoj said, we've always ensured that whatever we do we always have a plan B in place. So first of all, of course, this event has just happened very recently. So we need a little bit of time to rethink and think through exactly how we want to proceed. And the Board is convening I think, pretty soon to have those discussions. And I think arising from those Board meetings will then be the best plan of action going forward. But it is important to note that whatever projects we have signed PPAs for, all projects that are well in hand from an execution standpoint. Our operational performance continues to be robust. We are meeting all of our deliverables for the year, and we do not envisage any issues with raising any sort of funding for the pipeline that we have currently, as I said, between the cash on hand, the cash that we generate and also the capital recycling program that we are doing. So I think for the immediate term, we are perfectly fine. I don't anticipate any issues. Nevertheless, I think we will continue to evaluate all potential alternatives, of course, into the future as well. And that's something we'll debate. And as I said earlier, in the next earnings call, we hope to provide you all with a clearer guidance about the future course of action that we will be looking to undertake. And there are various options that we have. Our business has grown quite substantially over the course of the time that we were listed, and we have several degrees of freedom that we can actually act upon. I would also say that we are conscious about obviously what happened yesterday in the market. But I think we have to manage our share price for the long term. I think yesterday's reaction was obviously expected to sudden announcement that happened. And we hope that over time, investors are able to see through and see the true value of the business and that then begins to reflect in a share price again.

Next question is from Puneet Gulati from HSBC.

My first question is, is there a room for the rest of the shareholders to put in an offer ex of Masdar or is that completely off the table?

Manoj, can you take that?

The question was, is there a rule for other shareholders to put an offer? Is that what you're asking?

Yes. So ex of Masdar the remaining consortium, can they still make an offer? Or is that completely off the table now? No longer in discussion or proposed?

Look, this has happened over the weekend. There is no such a discussion that's underway. Obviously, the 2 major shareholders have a significant holding and then they're in working in conjunction with the Board we're going to discuss more specifically what the options are. But there is no discussion at the moment on any other contemplated offer or discussions with any other party.

And Masdar backing out despite taking almost a year, is there no obligation to ask for a reason for this back out?

We certainly would like to have a reason. I think it's entirely up to the party to respond in the way they would like. Every organization has its own processes on governance, which we are respectful of. I think the thing that you all ought to know is that the special committee wanted to make sure that they had in writing what the reason was for this deal being called off. And what you saw in the 6-K filing is exactly what we heard. So at this point, I don't have anything else to share with you. If that's all they want to share, then that's all I can -- I can at the moment. Maybe over time, we'll find out more, but there's nothing else to report at the moment. But then, again, I want to just emphasize that there was -- the due diligence was complete. There were 4 changes to the offer. There was a nonbinding offer with very specific indication that the only thing required was documentation and certain internal approvals. So other than that, I don't know anything else. We don't know anything else about [indiscernible].

Next question is from Nikhil Nigania of Bernstein.

Most of my questions are answered. One question I had is we had a standstill agreement with CPPIB. Is that still in place? Or is that no longer valid and they can buy shares without Board approval?

So Nikhil, maybe I can take that, Nikhil, we'll get back to you on that separately. We'll have to check.

Okay, understood. And the second and last question I have is we have a bond maturing in the coming 6 months, which is sort of a holdco bond asset backed as we call it. The refinancing of that, everything is on track. Nothing changes with regard to that.

Yes, Nikhil, nothing changes with regard to that. That bond is still some time away. And as we've indicated in the previous earnings call also, we are solutions which are absolutely in place to address that whichever way.

The next question is from Prapti Gupta of Alliance Bernstein.

Yes. I have only 2 questions. The first one is, given that we were so close to the transaction, and I'm also aware of the growth plans of the company. I'm sure there will be more longer-term plans of maybe raising money after you go private through your existing shareholders. So I was wondering a bit too early, but if anything, impacts on your growth strategy on your commitments to your annual 2 to 3 gigawatts of capacity add on an annual basis. And how does the company look to look to fund from an equity perspective. And this also relates to my -- to the external credit rating agencies, which -- and one of them, which has a negative outlook. So just on the funding and on the growth strategy, if you could elaborate a bit more on that. And the second question is that with this Masdar's exit, should we -- I mean just to get a bearish case scenario, any changes in the overall shareholding pattern that we can expect at the sponsor level for ReNew, the majority shareholders?

So I can take that. Yes, sure. So Prapti, basically, as far as our growth plans are concerned, and Sumant also mentioned that I can go pretty much [Technical Difficulty] with a capacity, which is a [Technical Difficulty] and every year, whatever capital we need for that, actually comes from internal accruals and partially comes from our capital recycling program in which, again, we have 2, 3 options for which we recycle capital. And that is something which we will continue to do as we go forward. [Technical Difficulty] As I can repeat that. Is it clear now? my line.

Yes, it is better. Maybe you can repeat that, Kailash.

Yes, sure. So basically, I was saying that Prapti as far as growth is concerned, that is likely to continue unabated the way it goes. So every year, whatever requirement we have for equity and debt, the equity portion is that we need some more internal accruals, huge expenses, capital recycling to do. So that is likely to continue as we go forward. As far as the other strategy which we are pursuing is deleveraging. So I think that is also something where we will continue to allocate capital towards reducing some of holdco debt. So I think in both those areas, we will continue to make the progress that we've been making. And I'll just add that even when this transaction was announced a year ago, there wasn't any primary infusion, which was in [indiscernible]. So to that extent, in any case, we were drawing up all our plans and continuing on a deleveraging basis, our own internal situation, which was business as usual as we call it, not really relying on any capital infusion which was [indiscernible]. So from that point of view, also, really nothing changes for even because of this transaction [indiscernible].

So let me just add to that. in terms of a little bit yes. Sorry. Can I say that a little bit unclear. So look, the reality is that whichever path we pursue, there are many things that we would have planned to do in whichever path we tend to go forward now, right? Had we done the take private, had that happened? Obviously, we would have had plans to do various things subsequent to that. Regardless of that, whether that deal happens or not, it's not happening now. Even currently, we have many different plans that we can pursue for any fundraising and so on that we are looking at. So I don't think that there's any fundamental difference. I mean this is an important point that there's no fundamental difference between the pathway that the company would have followed in the context of a take private versus the pathway that we will follow without the take private. I think there -- obviously, there will be differences between being a public company and being a private company. But I don't think that there's going to be a fundamental change to our rollout plans that we have talked about in the past. And as I said earlier, we feel that we are fairly well funded for executing against all the pipeline that we have and that we might get in the future. And keep in mind that we also have a very healthy new solar manufacturing business. That has also been doing well. And as you know, we have revised the guidance up for that in the last call. So I think that is something that is also going to help us meet our aspirations going forward.

I don't think we have any further questions. Thank you, everyone, for joining at short notice.

Anunay, can I just make a quick comment, Manoj here. Just -- just a quick -- more of an observation for all of you as a Board member representing my colleagues on the Board that we have spent a lot of time looking at this transaction in the last 12 months. And something like this is also an opportunity for a lot of introspection. And I think one of the things I do want to emphasize, which is very important, we believe, as a Board, is that we continue to have full confidence in Sumant and the ReNew team. And in a business where a market which is growing very rapidly and where execution is very important, having one of the best teams in the business in the Board's view is the biggest differentiator. And that hasn't changed. And what we are going to do is go back to work and execute on our plan B, C, whatever, however you want to think about it, and we'll be back to you with what are some of the aspects of our strategy that will deliver -- continue to deliver long-term shareholder value. So that's the charge over the next 30 to 90 days. And I know that Sumant and the team will be communicating with you on a regular basis as that develops.

Yes. And look, let me add one more thing also that over the last many months, our communication had become a little bit specific to the deal and, of course, just through tactical earnings results and so on. I think you should expect to hear more from us as we think through our plans and get back to you with what those plans are. And we continue to stay very focused on delivering on what we have promised and on making sure that we deliver value. Thank you.

Thanks, Manoj and Sumant. With that, we've come to the end of this call. And as Manoj and Sumant mentioned, we'll certainly be in touch for future updates as well. Thank you, everyone, for joining today.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.