India’s largest renewable energy firm ReNew Power disclosed it would go public through an $8 billion merger with a blank-check firm in the biggest deal in the fast-growing clean energy sector in the country.
The deal will be financed with cash proceeds of $1.2 billion, including $855 million in investments from serial blank-check dealmaker Chamath Palihapitiya, funds managed by BlackRock and Sylebra Capital.
Founded in 2011, ReNew Power counts Goldman Sachs and Canada Pension Plan Investment Board (CPPIB) among its prominent investors. It owns and operates solar energy projects for more than 150 commercial and industrial customers across India.
It is among a wave of clean-energy firms poised to benefit from the country’s push into renewable energy.
India, the world’s third-largest emitter of greenhouse gases, wants to raise its renewable energy capacity to 500 gigawatts (GW), or 40% of total capacity, by 2030.
ReNew Power’s total operational clean energy capacity is currently over 5 gigawatts (GW) and it has an aggregate capacity of about 10 GW. It also counts Abu Dhabi Investment Authority, Global Environment Fund and JERA Co Inc – a consortium of two of the biggest Japanese utilities – as investors.
Goldman Sachs and Morgan Stanley are serving as financial advisers to ReNew, with Morgan Stanley also acting as a joint placement agent to the blank check company RMG Acquisition Corporation II on the PIPE deal.
RMG Acquisition’s shares jumped about 14% in New York before the start of regular trading. The combined entity is expected to be listed on the Nasdaq under the ticker symbol “RNW”.
SPACs like RMG raise money through an initial public offering (IPO) to merge with a privately held company that then becomes publicly traded.
Palihapitiya, a former Facebook executive, also led the PIPE (private investment in public equity) round at SoftBank-backed robotics firm Berkshire Grey, which earlier on Wednesday agreed to go public through a merger with a blank-check firm.