Newsmaker: Meet ReNew Power's Sumant Sinha, the green power player

The purchase of Ostro Energy strengthens his beliefs in the universal benefits of renewable energy

On the website of ReNew Power where introductions to the company’s directors are listed, there is a Read More link to sumantsinha.com. “I'm the founder, chairman and CEO of ReNew Power, India's leading clean energy company. I'm a firm believer that renewable energy is no longer only about energy security and climate change, but also an opportunity that will provide economic advantages, propel local economies, and create more jobs for all,” it says.

That’s Sumant Sinha for those who are unfamiliar with the players in the sector and can hardly count five companies in the sector, despite the fact that there has been a proliferation of green energy producers in the country over the past few years. To that world, Sinha is a corporate name that readily comes to the mind whenever renewable energy is discussed. The fact that he has now created the biggest renewable power generator in the country with a capacity of 5,600 Mw adds to his powering presence in the sector. The competitors to Sinha’s ReNew Power are not companies like his own, but Tata Power Renewables and Mahindra Susten which are part of big corporate groups. At the other end of this spectrum are smaller players backed by sovereign and pension funds, private equity ventures and other investors. In between, there are companies like SoftBank and Bharti Enterprises-backed SB Cleantech that are making steady moves towards accumulating green megawatts.

Part of the reason for his fame in the sector, however, is also his pedigree. Sinha bears a remarkable physical resemblance to his father Yashwant Sinha, the BJP leader who had been minister of finance and external affairs in the Vajpayee government, but now has fallen out with the Modi-Amit Shah combine and is trying to forge his own political alliances. Unlike the senior Sinha, who perhaps is a more strident version of his younger self (perhaps owing to his age), Sumant Sinha comes across as an understated technocrat for whom green energy is a single-point agenda. Manu Srivastava, principal secretary, renewable energy, in the Madhya Pradesh government, one batch junior to Sinha from Delhi’s Indian Institute of Technology, describes Sinha as a “serious” green energy player who is in the sector not for mere monetisation but for “long-term”. “We need more people like him,” he added. Sinha’s family clout (Sumant’s brother Jayant is Union minister of state for civil aviation) never figured in their interactions as a government official and a company head. “It never feels that he comes from a political family," says Srivastava.

Illustration: Ajay Mohanty

Fifty two-year-old Sinha found his bearings in green energy at Tulsi Tanti’s Suzlon, the country’s largest wind equipment and EPC player. The two-year stint there was his last in corporate assignments. Prior to that, he worked as an investment banker with Citi and ING Barings in the US and the UK after graduating from Columbia University’s School of International and Public Affairs in 1992. He moved to India in 2002 to become the group chief financial officer of the Aditya Birla group. In five years, he became the founder CEO of Aditya Birla Retail. This stint, however, lasted only a year. In 2008, he joined Suzlon as the chief operating officer when it was India’s largest wind energy company.

He founded ReNew Power in 2011. The company has raised funding from Goldman Sachs, Abu Dhabi Investment Authority, Asian Development Bank, and Global Environment Fund. The April 2 announcement buying Ostro Energy in an estimated $1.55 billion (Rs 100 billion) deal came along with Canada Pension Plan Investment Board investing an additional $247 million in ReNew. The deal structured in 60:40 equity debt ratio with the company open for debt refinancing in the future is the largest deal in the sector after Tata Power Renewables acquired Welspun Energy for around Rs 90 billion in 2016.

The renewable energy scenario, however, isn’t about scales right now. To any player in the sector, it is the sustainability of tariffs and power purchase agreements, rather than sustainability of the environment alone, that is the bigger concern at this juncture. So, ReNew has been cautious about its bids and consciously maintained a low profile in last year’s bidding rounds that saw solar tariffs as low as Rs 2.44 a unit (kilowatt per hour) and wind at Rs 2.43. Sinha for now should be concentrating on streamlining of Ostro’s projects. Actis PE fund-backed Ostro Energy has a total capacity of more than 1,100 Mw, of which 850 Mw has been commissioned. The solar and wind projects are spread across Andhra Pradesh, Karnataka, Telangana, Rajasthan, Madhya Pradesh and Gujarat.

But then, the astute finance professional in Sinha is also looking out for correct timing to list his company. An initial public offer (IPO) of ReNew has been much talked about but yet to see light of the day. Perhaps, capacity accretion through inorganic growth could help him get better valuations for his company. It is, however, unlikely that the company may go in for major acquisitions on the lines of Ostro. Rather, stability in regulations, demand and pricing is likely to be the precursors for an IPO.