Sterling and Wilson Renewable Energy Limited Welcomes Reliance As Promoter

2021 AGM of RIL, Mukesh Ambani

In a formal confirmation of its deal with Reliance New Energy Solar (RNESL), Sterling and Wilson Renewable Energy Limited (SWREL) has announced the completion of transactions that enables the Reliance group to join as promoter group. This has happened after the Reliance group paid the balance Rs 1583 crore for the buyout of 25.90 percent of the firm. That takes its effective stake to just over 40 percent. The changes are effective December 30, 2021. The firm had posted total revenues of Rs 3330 crore on standalone basis in 2020-21, and a Rs 111 crore loss.

Earlier last week, Sterling and Wilson Renewable Energy Limited (SWREL) also approved the allotment of 2.93 crore equity shares for Rs 1099 crore to RNESL, completing he first phase of the transaction. The open offer from Reliance, and the initial purchase, have both been competed at a price of Rs 375 per share.

For SWREL, the entry of Reliance marks an end to a key chapter in its journey, especially as a listed firm on the stock exchanges. The firm, which had priced its IPO (Initial Public Offer) at Rs 780, has been beset by issues since its listing, due to adverse market conditions that impacted its promoters ability to repay loans taken from the firm, and subsequently, even earnings performance, which has been lumpy and inconsistent, to say the least. On the positive side, it did its reputation as a premier solar EPC no harm with some major wins across the globe, notably  in the middle east and Australia.

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It has also ventured into newer areas, be it waste to energy plants, data centers, or solar O&M in a bigger way. Its vast experience is considered a vital cog in the Reliance gambit to dominate the solar supply chain, from manufacturing to development.

Next For SWREL

As of now, no major changes have been indicated in the management of SWREL. Thus, even as the firm is expected to benefit from the liquidity and lower financing costs that Reliance brings, it will continue to build a global portfolio of projects. A higher share of Indian projects is also on the cards, as India ramps up to meet higher renewable energy targets of its own.

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SWREL is also expected to play a role in establishing the massive captive requirements of the Reliance group, as it seeks to meet its own net zero target by 2035.