‘Our equity returns have improved due to lower module costs’

Defending ₹12,800 Crore Valuation Amid Cooling Market

Indian company valuation stands at approximately ₹12,800 crore. To justify this figure in a cooling market, consider the company's 15-year journey, where it has raised about ₹4,000 crore in cumulative equity.

Long-Term Value Creation

• Post-money valuation of ₹12,800 crore represents about three times value creation.
• This is a result of long-term compounding, not short-cycle build-up.
• The value reflects the company's 6-GW platform, long-duration contracted assets and improving project returns.

Partial Monetisation of Shares

The company will sell shares worth about ₹382 crore.

• This sale will go towards repaying a personal loan taken earlier to buy back shares.
• It's balance-sheet housekeeping, not cashing out.

Business Model Insulation from Sector Volatility

The company operates exclusively in the commercial and industrial renewable segment.

• Weighted average PPA tenure is about 23 years.
• Most corporates prefer long-term contracts due to renewable generation being capital-intensive and non-core for them.
• This gives the company strong revenue visibility and predictable cash flows.

Current Operating Platform and Financials

The company is a 6-GW platform, with about 2.8 GW operational as of September-end and 3.2 GW contracted and under execution over the next 24 months.

• EBITDA reported was ₹1,000 crore last fiscal and ₹635 crore in the first half of the current fiscal.
• EBITDA CAGR over the past three years has been about 58 per cent.

Tariff Trends and Returns

Tariffs are on a downward trend, but equity returns have improved due to lower module costs and other factors.

• Weighted average dispatch tariff was around ₹4.3 per unit historically.
• For projects under construction, the tariff is about ₹3.61 per unit.
• Equity payback for projects commissioned in the past three years is around 2.5 years, compared with a historical average of 3.4 years.

Growth Opportunities

Corporates account for nearly half of India's electricity consumption, but only 7 per cent of that demand is currently met through bilateral renewable arrangements.

• Data centres and AI-driven infrastructure are emerging as strong demand drivers.
• The structural opportunity remains intact despite near-term valuation resets.