ReNew looks at optimising cost, shifts 20 employees to partner KPMG India

ReNew entered Indian bond market in 2015 with three issuances of Rs 400 cr, Rs 280 cr and Rs 451 cr
India’s largest renewable energy company ReNew Power is looking at optimising cost by shifting some employees to its outsourcing partner KPMG India.

 

The company, in an emailed reply, said only 20 employees from the accounts department have been shifted to its outsourcing partner for “process optimisation”.

 

ReNew currently holds the largest portfolio of wind and solar power capacity of 5,600 Mw in the country.

 

“Only about 20 employees from one vertical in the accounts department are moving to our outsourcing partner and this move was part of a process optimisation effort to bring in better efficiency in the function,” said the company’s spokesperson.

 

The company did not confirm KPMG’s name.

 

A spokesperson of KPMG, in an emailed reply, said, “As a policy, we do not comment on client or company specific matters.”

 

Insiders, however, said the cost optimisation measures could include asking some employees to look for alternative employment. ReNew Power, however, denied this. “ReNew is not planning to reduce its employee strength. On the contrary, we expect our staff strength to go up by 20 per cent by end of this year, from the current 1,000 employees to about 1,200,” said the company.

 

Recently, ReNew started conducting operations and management of its wind units itself, as turbine companies are failing to complete contracts due to the financial stress, said a company executive.

 

It is being learnt from several sources that the company’s majority stakeholder Goldman Sachs was planning to exit by selling its 48.62 per cent stake through an initial public offer (IPO). ReNew’s spokesperson, however, said Goldman continues to be invested in the company and it recently subscribed to the rights issue and paid $100 million. ReNew raised $300 million last month through a rights issue. 

 

ReNew has US-based Global Environment Fund (GEF), ADIA and JERA as other investors. ReNew had also raised around $475 million from the international market and Rs 3,175 crore in masala bond issues in 2017.

 

It entered the Indian bond market in 2015 with three issuances of Rs 400 crore, Rs 280 crore and Rs 451 crore. The following year, it raised another Rs 1,000 crore through three issuances.

 

ReNew Power planned an IPO last year to raise Rs 2,600 crore from the market. The company, however, did not come out with the issue despite a regulatory approval in place. “Goldman was banking on a successful exit from ReNew after the company made an expensive purchase of assets belonging to Ostro Energy,” said a person in the know.

 

Market experts said the deal was overvalued, given the current tepid market. ReNew took over Actis PE-backed Ostro Energy with a total asset size of 5,600 Mw to increase its portfolio ahead of the IPO for Rs 10,800 crore.

 

Business Standard reported in February 2019 that Norwegian state-owned petrochemical major Equinor was looking to pick a substantial stake in ReNew Power earlier this year. The talks remain inconclusive. The company had not responded on it then. ReNew’s 700 Mw wind and solar power capacities (including Ostro Energy assets) in Andhra Pradesh stand at risk, owing to the blanket cancellation of agreements by the state government with all renewable power companies.

 

ReNew Power reported a profit of Rs 860 crore during 2017-18, up by 6 per cent from year before. The company’s income increased 22 per cent to Rs 5,795 crore in 2017-18, revealed the audited standalone results.