Capex pace, receivables to drive ratings of Indian renewable holdcos: Fitch

Capex intensity and the pace of receivables collection from distribution companies will dictate ratings trajectory for Greenko Energy Holdings and ReNew Power, Fitch Ratings has said in a new report.

"We expect the operating portfolios of ReNew and Greenko to diverge in terms of scale, offtake and resource mix over the next two years as their approach to growth varies," it said.

ReNew and Greenko are leading renewable groups, each with more than 5 gigawatt operating capacities and together they account for around 11 per cent of India's total renewable installed capacity.

Both groups have developed sound operational expertise over the years with experience in operating multi-GWs of projects across multiple states.

Fitch expects both companies' net leverage (measured as net debt/EBITDA) to decline from the high single-digit levels seen in the early growth phase from 2015 to 2019.

However, the pace of deleveraging will vary and depend on the capex intensity and EBITDA generation from new capacity.

The positive outlook on ReNew's BB-minus rating reflects its deleveraging potential following the announcement that it will receive 610 million dollars from a primary equity sale as part of its public listing plans.

Greenko's BB ratings are underpinned by a consolidated portfolio of 5.1 GW of renewable power assets and supported by Greenko's proven access to funding and liquidity support due to strong shareholders, said Fitch.