RATING RATIONALE 2 February 2021 ​

ReNew Power Pvt Ltd (erstwhile ReNew Power Ltd) Brickwork Ratings reaffirms the rating for the Commercial Paper Issue amounting to ₹ 600 Crores of ReNew Power Pvt Ltd (erstwhile ReNew Power Ltd)

Particulars Amount ( Crs) Rating* ₹ Tenure Previous Instrument Previous Present Present (Jan 2019) BWR A1+ CP 600 600 Short Term BWR A1+ (Reaffirmation) Total 600 600 INR Six Hundred Crores Only *Please refer to BWR website www.brickworkratings.com/ for definition of the ratings ​ ​

Rating Action / Outlook Brickwork Ratings (BWR) reaffirms the rating for the Commercial Paper (CP) issue of ReNew Power Pvt Ltd (RPPL or the company). BWR has noted that as on date, there is no amount outstanding against the said instrument. The rating continues to draw strength from the resourceful promoters, consisting of various reputed investors with a demonstrated track record of infusing funds at regular intervals, experienced and professional management team, RPPL’s standing as a leading player in the segment, company’s established track record in commissioning significant capacities, long-term Power Purchase Agreements (PPAs) in place for operational capacities lending adequate revenue visibility, diversified geographical and off-taker profile with the majority offtake by central agencies such as the SECI and NTPC, maintenance of a DSRA in the range of one to two quarters of principal and interest payments in the SPVs and comfortable liquidity profile at both the standalone and group levels.

The rating, however, continues to remain constrained on account of the substantial amount of debt in the company’s books leading to a high gearing and moderate coverage indicators, continuous need to refinance debt with a significant amount falling due for repayment over the next two years, execution risk with respect to under-development assets with many of them getting delayed on account of the Covid-19 pandemic (the company has got extensions from the concerned authorities for all these projects and expects them to get completed within the extended timeline) and counterparty risk pertaining to PPAs with state discoms, coupled with a substantial amount piled up as receivables, particularly from AP discoms.

The successful realisation of pending receivables and timely refinancing of debt are key sensitivity factors, and BWR will continue to monitor the same.

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Key Rating Drivers

Credit Strengths: Resourceful Promoters with Demonstrated Track Record of Regular Equity Infusion: RPPL ​ has been attracting the interest of various reputed global investors since its inception, with Goldman Sachs’ investment arm GS Wyvern Holdings Limited (GSW) being the largest shareholder in the company. Other major investors include Abu Dhabi Investment Authority (ADIA), Jera Co. Inc (Jera), Canada Pension Plan Investment Board (CPPIB) and Global Environment Fund. Together, these investors account for more than 93% of the company’s shareholding. RPPL has successfully raised equity from promoters multiple times in the past. In FY20 also, the company raised compulsorily convertible preference shares amounting to USD 300 mio from promoters through a rights issue, and thus, need-based support from promoters is likely to continue in future as well for funding expansions and acquisitions and accordingly, has been taken into account while arriving at the rating.

Considerable Operational Portfolio: RPPL has been continuously adding capacities through both organic and inorganic modes of expansion. The group’s current operational capacity is at 5.5 GW, comprising both wind and solar. Wind power constitutes 60% of the total operational capacity, and the remaining 40% belongs to solar power. These assets are spread over multiple states, viz, , , , , , Uttar Pradesh, , , Delhi, and , with an operational track record of more than four years on average. The group is also looking at monetising some of its operational assets to free-up reserves for further expansion.

Consistent Increase in Revenue Generation: The company continues to add capacities every year, and this has also increased its revenue generation. The company’s operating income at the consolidated level increased by 75% in FY19 and 13% in FY20, YoY. Revenue is further expected to increase in FY21, with various projects achieving the COD. The company has already achieved nearly 50% of the projected turnover for FY21 in H1 FY21. Projects under implementation with a cumulative capacity of 3.7 GW (both wind and solar power) are likely to be commissioned over the next two years, and accordingly, the operating income will continue to grow.

Revenue Visibility due to Assured Offtake: The entire operational capacity of the group has been tied-up in long-term PPAs. RPPL has a diversified base of off-takers with a mix of central agencies such as the SECI, NTPC and PTC, and various state level discoms acting as customers. The weighted average tariff for operational solar power plants is Rs. 4.51/kWh and wind power plants is Rs. 4.65/kWh. More than 80% PPAs have a longer tenure of 20+ years, providing adequate revenue visibility for the future.

Credit Risks: Debt-Funded Capex Impacting Gearing with Significant Maturities over Next Three Years: RPPL had Rs. 33143.20 Crs in debt as on 30 September 2020 at the consolidated level, with significant maturities over the next three years. The company has expanded considerably over the last few years both by way of own developments and acquisitions, leading to significant debt. Although the company has raised significant equity as well from promoters during the said period, the adjusted gearing remained high, at 4.12x as of 30 September 2020. Masala www.brickworkratings.com Page 2 of 10 ​ ​ ​ bonds with an outstanding amount of Rs. 3180 Crs are falling due in February 2022, which the company plans to refinance with a longer tenured instrument in the coming months. In addition, substantial amounts of ECBs and NCDs are falling due in FY23 and FY24, which will again require multiple rounds of refinancing. The timely refinancing of these instruments is a key rating sensitivity, and developments in this regard will be monitored by BWR.

Counterparty Risk and Receivables Issue: In solar assets, the overall share of stressed ​ discoms such as AP, Telangana and Tamil Nadu is relatively lower, at 13%. In the case of wind assets, AP itself has a share of 16% in the total capacity. A conflict has been on among renewable energy IPPs and AP discoms for a long time with respect to the renegotiation of tariffs agreed upon in the PPAs. Based on the High Court’s direction, AP discoms have been making payments at a base tariff of Rs. 2.44-2.45/kWh December 2019 onwards, which will continue till a decision is taken on the matter. Due to disruptions caused by Covid-19 pandemic, no further hearings in the matter happened during the last one year, and there is still no clarity on the outcome of the same. This has led to a substantial rise in the group’s receivables. In addition, many other discoms have also delayed payments to the company due to the impact of the pandemic on their realisations. While the company continues to receive some payments towards the past dues, the receivables remain high, and a continuous rise in the same may put pressure on the group’s liquidity, going forward, which may impact the rating as well. RPPL, however, is confident that it will be able to realise the past dues over the next few months.

Analytical Approach And Applicable Rating Criteria To arrive at the rating, BWR has analysed the consolidated financial statements of the company due to the management, and operational and financial linkages of these SPVs with RPPL. The list of entities consolidated is given in the annexure.

Please refer to the applicable criteria at the end.

Rating Sensitivities

Positive: The successful refinancing of debt maturing over the next three years and an ​ ​ improvement in the capital structure by way of further equity infusion from promoters Negative: The rating can be revised downwards if there is a further deterioration in the ​ payment cycle of counterparties, impacting the group’s liquidity position.

Liquidity Position: Adequate The company has a comfortable liquidity position with unencumbered cash and cash equivalents amounting to 724.70 Crs at the standalone level and Rs. 2029.40 Crs at the consolidated level as on 31 December 2020. In addition, the SPVs have been maintaining a DSRA in the range of one to two quarters of their debt obligations, in line with the terms of their respective debt, providing adequate coverage for the group’s repayment obligations. The group is in the process of refinancing masala bonds due in February 2022, and the current level of cash generation is more than adequate to meet the balance debt obligations for the year. However, the continuous rise in the receivables is a risk factor that can impact the liquidity position, going forward, and thus, needs to be looked at.

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Company Profile ReNew Power Private Limited (RPPL, erstwhile ReNew Power Ltd & ReNew Power Ventures Pvt Ltd) is ’s largest Independent Power Producer (IPP) in the renewable energy space. RPPL was incorporated in 2011 by Mr. Sumant Sinha in New Delhi. The company has been building up capacities ever since and presently, has a portfolio of 5.5 GW capacity of operational assets. Wind power constitutes 60% of the operational assets, and the remaining 40% comes from solar power. Apart from this, RPPL has wind power assets under implementation with a capacity of 899.30 MW and solar power assets under implementation with a capacity of 2.79 GW.

Key Financial Indicators - Consolidated

Particulars Units FY19 (A) FY20 (A) Revenue from Operations Rs. Crs 4314.40 4841.50 EBITDA Rs. Crs 3735.50 4030.80 PAT Rs. Crs 103.00 -502.60 Adjusted Debt Rs. Crs 26678.40 33084.20 Adjusted Debt/TNW Times 3.10 3.92 Note: All financials have been reclassified as per BWR standards. The company has reported net loss on account of various non-cash adjustments. Adjusted figures are calculated after taking CCPS as part of the equity.

Key Covenants Of The Instrument/Facility Rated: NA

Non-cooperation With Previous Rating Agency If Any: NA

Rating History

Facility Current Rating Rating History

Amount Fund Based Tenure Rating 2020 2019 2018 (₹ Crs) Short CP Issue 600 BWR A1+ BWR A1+ BWR A1+ NA Term

Total 600 INR Six Hundred Crores Only

Complexity Levels Of The Instruments

For more information, visit www.brickworkratings.com/download/ComplexityLevels.pdf ​

Hyperlink/Reference To Applicable Criteria

● General Criteria ● Approach to Financial Ratios ● Infrastructure Sector ● Commercial Paper

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Analytical Contacts

Aakriti Sharma Vipula Sharma Assistant Manager - Ratings Director– Ratings Board: +91 11 2341 2232 Ext: 111 Board: +91 80 4040 9940 [email protected] [email protected]

1-860-425-2742 [email protected]

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ReNew Power Pvt Ltd Annexure I - List of Entities Consolidated

% Holding as on March 31, S. No. Name of Company 2020 1 ReNew Wind Energy (Rajasthan) Pvt Ltd 100% 2 ReNew Wind Energy (Welturi) Pvt Ltd 100% 3 ReNew Wind Energy (Devgarh) Pvt Ltd 100% 4 ReNew Wind Energy (Karnataka) Pvt Ltd 64% 5 ReNew Wind Energy (AP) Pvt Ltd 66% 6 ReNew Wind Energy (Rajkot) Pvt Ltd 100% 7 ReNew Wind Energy (Jath) Ltd 100% 8 ReNew Wind Energy Delhi Pvt Ltd 100% 9 ReNew Wind Energy (Shivpur) Pvt Ltd 100% 10 ReNew Wind Energy (Jadeswar) Pvt Ltd 100% 11 ReNew Wind Energy (Varekarwadi) Pvt Ltd 100% 12 ReNew Wind Energy (MP) Pvt Ltd 100% 13 ReNew Wind Energy (AP3) Pvt Ltd 100% 14 ReNew Wind Energy (MP Two) Pvt Ltd 100% 15 ReNew Wind Energy (Rajasthan One) Pvt Ltd 100% 16 ReNew Wind Energy (Sipla) Pvt Ltd 100% 17 ReNew Wind Energy (Jamb) Pvt Ltd 100% 18 ReNew Wind Energy (Orissa) Pvt Ltd 100% 19 ReNew Wind Energy (TN) Pvt Ltd 100% 20 ReNew Wind Energy (Rajasthan 2) Pvt Ltd 100% 21 ReNew Wind Energy (AP2) Pvt Ltd 100% 22 ReNew Wind Energy (Karnataka Two) Pvt Ltd 100% 23 ReNew Wind Energy (Vaspet 5) Pvt Ltd 100% 24 ReNew Wind Energy (Jath Three) Pvt Ltd 100% 25 ReNew Wind Energy (AP4) Pvt Ltd 100% 26 ReNew Wind Energy (MP One) Pvt Ltd 100% 27 ReNew Wind Energy (Karnataka Five) Pvt Ltd 100% 28 ReNew Wind Energy (Rajasthan 3) Pvt Ltd 100% 29 Narmada Wind Energy Pvt Ltd 100% 30 Abaha Wind Energy Developers Pvt Ltd 100% 31 Helios Infratech Pvt Ltd 100% 32 Shruti Power Projects Pvt Ltd 100% 33 Molagavalli ReNewable Pvt Ltd 100% 34 ReNew Vayu Urja Pvt Ltd 100% 35 Kanak ReNewables Ltd 100% 36 Rajat ReNewables Ltd 100% 37 Ostro Jaisalmer Pvt Ltd 100% 38 Ostro ReNewables Pvt Ltd 100% www.brickworkratings.com Page 7 of 10 ​ ​ ​

39 Ostro Urja Wind Pvt Ltd 100% 40 Ostro Dakshin Power Pvt Ltd 76% 41 Ostro Raj Wind Pvt Ltd 100% 42 Ostro Rann Wind Pvt Ltd 100% 43 Ostro Dhar Wind Pvt Ltd 100% 44 Ostro Bhesada Wind Pvt Ltd 100% 45 Ostro Alpha Wind Pvt Ltd 100% 46 Ostro Kannada Power Pvt Ltd 100% 47 Ostro Andhra Wind Pvt Ltd 100% 48 Ostro AP Wind Pvt Ltd 100% 49 Ostro Madhya Wind Pvt Ltd 100% 50 Ostro Kutch Wind Pvt Ltd 100% 51 Ostro Energy Pvt Ltd 100% 52 Badoni Power Pvt Ltd 100% 53 AVP Powerinfra Pvt Ltd 100% 54 Ostro Anantapur Pvt Ltd 79% 55 Ostro Mahawind Power Pvt Ltd 100% 56 Pugalur ReNewable Pvt Ltd 100% 57 Bidwal ReNewable Pvt Ltd 100% 58 Zemira ReNewable Energy Ltd 100% 59 ReNew Solar Power Pvt Ltd 100% 60 ReNew Solar Energy Pvt Ltd 100% 61 ReNew Solar Energy (Rajasthan) Pvt Ltd 100% 62 ReNew Solar Energy (TN) Pvt Ltd 100% 63 ReNew Solar Energy (Karnataka) Pvt Ltd 100% 64 ReNew Akshay Urja Ltd 56% 65 ReNew Solar Energy (Telangana) Pvt Ltd 51% 66 ReNew Saur Urja Pvt Ltd 100% 67 ReNew Clean Energy Pvt Ltd 100% 68 ReNew Solar Services Pvt Ltd 100% 69 ReNew Agni Power Pvt Ltd 100% 70 ReNew Mega Solar Power Pvt Ltd 51% 71 ReNew Saur Shakti Pvt Ltd 100% 72 ReNew Solar Energy (Jharkhand One) Pvt Ltd 100% 73 ReNew Power Services Pvt Ltd 100% 74 ReNew Solar Energy (Jharkhand Three) Pvt Ltd 51% 75 ReNew Solar Energy (Jharkhand Four) Pvt Ltd 100% 76 ReNew Solar Energy (Jharkhand Five) Pvt Ltd 100% 77 ReNew Solar Energy (Karnataka Two) Pvt Ltd 100% 78 ReNew Wind Energy (Karnataka 3) Pvt Ltd 100% 79 ReNew Wind Energy (MP Four) Pvt Ltd 100% 80 ReNew Wind Energy (MP Three) Pvt Ltd 100% 81 ReNew Wind Energy (Rajasthan Four) Pvt Ltd 100% 82 ReNew Wind Energy (Maharashtra) Pvt Ltd 100% www.brickworkratings.com Page 8 of 10 ​ ​ ​

83 ReNew Wind Energy (Karnataka 4) Pvt Ltd 100% 84 Bhumi Prakash Pvt Ltd 100% 85 Tarun Kiran Bhoomi Pvt Ltd 100% 86 ReNew Wind Energy (AP Five) Pvt Ltd 100% 87 Symphony Vyapaar Pvt Ltd 100% 88 Lexicon Vanijya Pvt Ltd 100% 89 Star Solar Power Pvt Ltd 100% 90 Sungold Energy Pvt Ltd 100% 91 ReNew Wind Energy (Budh 3) Pvt Ltd 100% 92 ReNew Wind Energy (TN 2) Pvt Ltd 100% 93 ReNew Distributed Solar Services Pvt Ltd 100% 94 ReNew Distributed Solar Energy Pvt Ltd 100% 95 ReNew Distributed Solar Power Pvt Ltd 100% 96 ReNew Surya Mitra Pvt Ltd 1% 97 ReNew Surya Prakash Pvt Ltd 100% 98 ReNew Saur Vidyut Pvt Ltd 100% 99 ReNew Energy Services Pvt Ltd 100% 100 ReNew Solar Sun Flame Pvt Ltd 100% 101 ReNew Solar Daylight Energy Pvt Ltd 100% 102 Prathamesh Solarfarms Ltd 100% 103 Heramba ReNewables Ltd 75% 104 Aalok Solarfarms Ltd 75% 105 Abha Solarfarms Ltd 75% 106 Shreyas Solarfarms Ltd 75% 107 Vivasvat Solar Energy Pvt Ltd 100% 108 Nokor Solar Energy Pvt Ltd 100% 109 Akhilagya Solar Energy Pvt Ltd 100% 110 Abha Sunlight Pvt Ltd 100% 111 Izra Solar Energy Pvt Ltd 100% 112 Nokor Bhoomi Pvt Ltd 100% 113 Zorya Solar Energy Pvt Ltd 100% 114 ReNew Transmission Ventures Pvt Ltd 100% 115 Adyah Solar Energy Pvt Ltd 100% 116 ReNew Power Singapore Pte Ltd 100% 117 ReNew Americas Inc 100% 118 Auxo Solar Energy Pvt Ltd 100% 119 ReNew Foundation 100% 120 ReNew Power International Ltd 100% 121 Zorya Distributed Power Services Pvt Ltd 100% 122 ReNew Cleantech Pvt Ltd 100% 123 ReNew Sun Ability Pvt Ltd 100% 124 Renew Mega Light Pvt Ltd 100% 125 Renew Sun Waves Pvt Ltd 100% 126 Auxo Sunlight Pvt Ltd 100% www.brickworkratings.com Page 9 of 10 ​ ​ ​

127 Renew Sun Energy Pvt Ltd 100% 128 Renew Sun Bright Pvt Ltd 100% 129 Renew Sun Flash Pvt Ltd 100% 130 ReNew Services Pvt Ltd 100% 131 ReNew Sun Power Pvt Ltd 100% 132 ReNew Mega Urja Pvt Ltd 100% 133 ReNew Mega Spark Pvt Ltd 100% 134 ReNew Mega Green Pvt Ltd 100% 135 ReNew Green Energy Pvt Ltd 100% 136 ReNew Green Power Pvt Ltd 100% 137 Greenyana Sunstream Pvt Ltd 100% 138 Renew Vyoman Pvt Ltd 100% 139 Renew Vyoman Energy Pvt Ltd 100% 140 Renew Vyan Shakti Pvt Ltd 100% 141 Shekhawati Solar Park Pvt Ltd 100% 142 Renew Green Solutions Pvt Ltd 100% 143 Renew Surya Roshni Pvt Ltd 100% 144 Renew Solar Urja Pvt Ltd 100% 145 Renew Surya Ojas Pvt Ltd 100% 146 Renew Surya Vihaan Pvt Ltd 100%

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