INOX GREEN ENERGY SERVICES LIMITED FILES DRHP WITH SEBI

INOX GREEN ENERGY SERVICES LIMITED FILES DRHP WITH SEBI

Inox Green Energy Services Limited (IGESL) is a major wind power operation and maintenance (“O&M”) service provider within India has filed DRHP with SEBI on 17th June 2022. The company plans to raise funds through initial public offering (IPO) aggregating up to Rs. 740 crore comprising of a fresh issue of equity shares aggregating up to Rs. 370 crore and offer for sale aggregating up to Rs. 370 crore. IGESL intend to utilise net proceed from the issue towards Repayment and/or pre-payment, in full or part, of certain borrowings availed by the company including redemption of Non-Convertible Debentures in full and balance amount for general corporate purpose.

Inox Green Energy Services is a subsidiary of Inox Wind Limited (“IWL”) which is listed on the National Stock Exchange of India Limited and BSE Limited and is part of the Inox GFL group of companies (“Inox GFL Group”).

IGESL is engaged in the business of providing long-term O&M services for wind farm projects, specifically the provision of O&M services for wind turbine generators (“WTGs”) and the common infrastructure facilities on the wind farm which support the evacuation of power from such WTGs.

Company has an established track record in the wind energy O&M industry of more than nine years due in large part to the synergistic relationship it share with its parent company, IWL (which commenced operations in the wind energy space in the financial year ended March 31, 2010). It enjoy synergistic benefits as a subsidiary of IWL, which is principally engaged in the business of manufacturing WTGs and providing turnkey solutions by supplying WTGs. It offers a variety of services including wind resource assessment, site acquisition, infrastructure development, EPC of WTGs and through it providing long-term O&M services for wind power projects.

Pursuant to an exclusivity agreement between IWL and the company, it provide exclusive O&M services for all WTGs sold by IWL through the entry of long-term O&M contracts between the WTG purchaser and the company for terms which typically range between five to 20 years. Due to this exclusivity agreement, IWL’s order book is an important indicator of future revenue and growth for the company.

As of March 31, 2022, its portfolio of O&M contracts (consisting of both comprehensive O&M contracts and common infrastructure O&M contracts) covered an aggregate of 2,750 MW of wind projects spread across eight wind-resource rich states in India with an average remaining project life of more than 20 years. Of the 2,750 MW capacity, 1,922 MW was attributable to its contracts for comprehensive O&M services and 828 MW was attributable to its common infrastructure O&M contracts. In general, its comprehensive O&M contracts cover the provision of O&M services to both WTGs installed on a wind farm and the common infrastructure facilities, such as electrical substations and transmission lines, which support the wind farm; its common infrastructure O&M contracts relate only to the provision of O&M services on the common infrastructure facilities.

The counterparties to O&M contracts feature a mix of leading independent power producers (“IPPs”) (approximately 71.27%), public sector undertakings (“PSUs”) (approximately 14.62%) and corporates (approximately 14.11%).

Due to its exclusivity agreement, IWL’s order book is an important indicator of future revenue and growth for the company. As of March 31, 2022, IWL had entered into binding contracts for the supply of 2 MW capacity WTGs with an aggregate capacity of 780 MW. Further, IWL had also received letters of intent, which are non-binding and which therefore may not lead to execution of any form of binding contract, for its new 3.3 MW capacity WTGs with an aggregate capacity of 524.7 MW. IWL’s order book included orders for WTGs with aggregate capacity of 1,304.7 MW. The order book includes executed binding contracts for WTGs for an aggregate capacity of 780 MW and signed letters of intent for an aggregate capacity of 524.7 MW which are non-binding and which therefore may not lead to execution of any form of binding contract.

As of March 31, 2022, its O&M services portfolio consisted of an aggregate 2,750 MW of wind farm capacity and 1,375 WTGs. This included a total capacity of 1,178 MW for various customers in Mahidad, Rojmal, Sadla, Savarkundla and Dayapar in Gujarat; a total capacity of 632 MW for various customers in Kukru, Nipaniya, Jaora and Lahori in Madhya Pradesh; a total capacity of 560 MW for various customers in Dangri, Rajasthan; and a total capacity of 196 MW for various customers in Vaspet, Bhendewade and South Budh in Maharashtra.