Inox Green Energy to raise upto Rs 1,000 crore through preferential allotment, warrants

Estimated read time 10 min read
Inox GreenEnergy Services, which provides operation and maintenance (O&M) services to wind power operators, plans to raise Rs 800-1,000 crore through a combination of preferential allotment and warrant issuance to fund future acquisitions, according to multiple sources familiar with the matter. The company is aggressively looking at O&M assets of 10 GW capacity that are currently managed by inactive or financially stressed entities.

A formal announcement of the fundraising is expected in the next few days. An email sent to Inox Green did not elicit a response at the time of press.

Inox Green plans to issue preferential allotments and warrants totalling Rs 500-600 crore to four-five global and local investors, including a London-based fund among others. The remaining funds will be raised through warrants issued to the company’s promoters. The promoter group led by Devansh Jain held 55% stake through Inox Wind as of March 2024. The move is aimed at increasing the promoter’s stake to instil greater confidence among long-term investors regarding the company’s business prospects.

The company is currently in advanced negotiations with a few O&M firms and several independent power producers to secure contracts for managing their operational assets, a move that could potentially double its installed capacity within the next year. Inox Green Services is India’s only listed pure-play company focused on renewable O&M services, managing 3.2 GW of assets.

As of now, Inox Green Services holds a market value of Rs 4,160 crore, and its stock has appreciated by approximately 41% over the last six months. The primary objective of the proposed fundraising is to acquire companies, which will accelerate Inox Green Services’ target capacity to 6 GW by FY26. During a post-earnings conference call in March 2024, the company mentioned exploring various opportunities and indicated that disclosures would be made at an appropriate time. Over the long term, it aims to reach a capacity of 10 GW within the next three-four years.Inox Green generates Rs 8 lakh in revenue for every 1 MW of O&M services provided, indicating that a cumulative O&M services contract for 5 GW could potentially yield revenues of Rs 400 crore. The O&M business operates on an asset-light model and is capable of achieving over 50% EBITDA margin under steady-state conditions. In FY24, Inox Green Services achieved 96% machine availability for its managed assets. Under O&M contracts, the company undertakes maintenance of wind turbines, generators, and common infrastructure over periods ranging from 5 to 20 years. Inox Green’s revenue rose 10% year-on-year to Rs 261.1 crore in FY24 compared with Rs 237 crore and operating profit increased by 32% to Rs 128.7 crore. It reported a net profit of Rs 29 crore compared with a loss of Rs 46 crore in the previous year.

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