Indian Bourses Get Their Largest Solar Energy Listing So Far
Last month, Indian stock markets witnessed the listing of shares of one of the largest renewable energy developers in the country. This listing did not come through an initial public offering, but rather through a de-merger of the renewable energy developer from its parent entity. The company is now tied with Suzlon Energy as the largest pure renewable energy entity listed at Indian bourses, in terms of market capitalization.
On June 18th, 2018, Adani Green Energy Limited (AGEL) became the first largest pure solar power developer in India to be listed on Indian stock markets. The company was formed following a de-merger from its parent Adani Enterprises — a conglomerate with interests in several infrastructure-related markets. For every 1000 shares of Adani Enterprises held, a shareholder received 761 equity shares. 
According to India Ratings & Research, AGEL had an installed renewable energy capacity of 1,768 megawatts in January 2018, including 1,708 megawatts of solar and 60 megawatts of wind energy capacity. The company also had 420 megawatts of solar and wind energy capacity at various stages of development.
A few other companies listed at Indian bourses may have more solar power capacity under operation or development, but AGEL is a purely renewable energy development company. NTPC Limited, for example, may have several times the solar power capacity under development than AGEL, but the former is a predominantly thermal power generation company.
Being part of a large industrial conglomerate helped AGEL grow to such a scale by the time of listing. The company operates India’s largest solar power project — 648 megawatts — in the state of Tamil Nadu. Despite its substantial capacity size the company has not been as aggressive as some of its competitors, some of whom are also planning IPOs in the near future.
“In line with its investment philosophy and return expectations, AGEL has refrained from bidding aggressively for solar power projects over the last one year. Hence, it has no new major capacity currently in its pipeline. Although the current portfolio would be operational in FY19, the construction risk may begin to build again in case the group builds up a new project pipeline,” Vivek Jain, Director — India Ratings and Research said in an analyst report earlier this year.
The revenue stream for the company seems healthy for the moment as the entire capacity is linked to 25-year power purchase agreements. Around half of this capacity is tied to ‘tied to moderate-to-high credit risk counter-parties.’ The company is also expected to look for acquisitions and expansion into new markets in the future.
“Ind-Ra believes that small solar projects could come up for consolidation in the near to medium term and AGEL may evaluate inorganic growth opportunities. AGEL is also evaluating options for investments in foreign geographies, though no firm plans have been formed,” Jain added.
Suzlon Energy, perhaps one of the first pure renewable energy companies in India to be listed at national bourses, is a sort of benchmark against which all new renewable energy companies listed are measured, albeit Suzlon Energy itself has nearly lost its entire valuation due to debt-related issues over the years.
At the end of trading hours on June 29th, 2018, AGEL had a market capitalization of Rs 40.47 billion ($591 million), while Suzlon Energy had a market capitalization of Rs 39.90 billion ($583 million).
AGEL’s competitors — ReNew Power Ventures Limited and Acme Solar — are also planning IPOs in the near future. ReNew Power claims to be the largest renewable energy developer in India with a portfolio of around 5.8 gigawatts and has the ability to displace AGEL as the largest pure renewable energy company listed at Indian stock exchanges.
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