Daily Brief India: ReNew Energy Global , Azure Power Global Ltd and more

We view ReNew Energy Global as “Medium Risk” on the LARA scale. The company is India’s largest renewable power producer (13.7 GW of total capacity and 8 GW of operating capacity at end-March 2023), and enjoys good access to capital. It benefits from stable cash flows and priority dispatch to the grid (e.g. solar), resulting in a robust business profile. The key risk is counterparty payments (DISCOMs). The merger with RMG Acquisition Corp II, a Nasdaq-listed SPAC, has increased ReNew’s transparency, reporting standards, checks and balances as well as cash proceeds to fund capex. The credit is weighed down by high leverage and the company’s aggressive expansion plan to triple its capacity by FYE 2024-25, with capex expected to surge 3-4x to USD 1.5-2.4 bn.

Our Credit Bias is “Stable”, due to the robust nature of the utilities business.

Controversies are “Immaterial”. The ESG Impact on Credit is “Moderately Positive” in our view, due to the nature of ReNew’s business (renewable energy). This should facilitate better access to capital, especially from ESG-minded institutional investors.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Central China Real Estate
2. Anton Oilfield
3. Seazen (Formerly Future Land)
4. Agung Podomoro Land
5. Hopson Development

and more…

Azure Power’s change of auditor, appointment of new CEO and CFO, and the company’s delisting are credit negative in our view. The company had previously informed onshore lenders that the audit of FY 2021-22 results was nearly completed, and that Azure might be able to avoid being delisted. However, auditor SR Batliboi & Co’s resignation does not bode well for the company. The new auditor and new management will take time to get up to speed on Azure and the results.