NYSE-listed Azure Power, one of the country’s largest independent solar power producers with a solar portfolio of over 3GW spread across 23 states, has raised around $185 million primary capital through an equity offering, Inderpreet Wadhwa, CEO & Founder, Azure Power, said in an interview with BusinessLine.

The Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) has contributed $100 million (around ₹730 crore) to the company’s capital raising which increased the fund’s stake in the company to 40 per cent, CDPQ has announced last week. This is a second investment of the fund into the company: CDPQ had invested $140 million in 2016 before the company went public.

Apart from CDPQ, IFC Asset Management and Helion Venture Partners are among the company’s large shareholders.

Azure Power, founded by Wadhwa in 2008, has raised over $1.8 billion equity and debt so far, including last year’s $500 million green bonds issue, according to its CEO. The company is now well capitalised to complete projects in the pipeline with cumulative capacity of over 2 GW as well as bid for new projects, Wadhwa added.

Azure Power has a target to grow its operational portfolio to 5GW by 2020.

The company’s revenue for the quarter eneded June 30, 2018 stood at ₹242 crore, up 29 per cent from ₹187 crore during the corresponding period of the previous financial year.

Net income for the quarter was ₹2.9 crore as against ₹20 crore primarily due to foreign exchange losses due to the rupee’s depreciation against the dollar, the company said. It has issued a guidance for revenue growth of around 22 per cent to $143-151 million for FY18 from $118 million in Fy18.

According to Wadhwa, Azure Power will continue focussing on organic growth through competitive bidding and is not considering any acquisitions at the moment. The company is also planning to remain a pure solar energy developer going forward.

Long-term finance

When asked whether raising financing from the domestic sources has become an issue for the solar developers given that Indian banks have almost stopped lending to the infrastructure sector, Wadhwa said the power purchase agreements (PPAs) signed by solar power producers with off-takers, especially AAA-rated SECI or NTPC as well as some states, for example Gujarat, are safe contracts.

“Our first contract was signed with Punjab in 2009 for ₹17, 91 per unit and we’ve not had a single payment issue for the said contract for almost 10 years now,” Wadhwa said.

He noted, however, that India does not have enough long-term capital to fund project development at a scale that would help the country achieve the target of 100 GW of solar energy set by the government in next four years.

“You don’t have enough infrastructure finance companies focused on solar (sector) in India, and banks often have asset liability mismatch as we are talking about 25 year-long PPAs, so they rather provide short-term financing,” he said adding that for long-term financing the developers have to look for funding outside India.

Transparent market

According to Wadhwa, India remains one of the most attractive destinations for solar energy despite industry players’ and investors’ concerns over some of the latest government policies and regulations, including imposition of the safeguard duty on the PV modules imported from China and Malaysia or proposed capping of solar tariff

“In the end of the day we are working in a developing country, and the requirements are quite high from investors, as they should be. I think by and large India has done a fantastic job of being open, transparent and competitive market for solar,” Wadhwa said.

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