Started in 2011, ReNew Power Limited is Delhi based largest renewable energy IPP in India in terms of total energy generation capacity (as per CRISIL Report). As of the date of this DRHP, company had a total capacity of approximately 5.85 GW, comprising 3.92 GW of operational capacity, 1.66 GW of capacity under development and 0.27 GW of wind power capacity awarded in April 2018 in the fourth SECI wind power auctions. They develop, build, own and operate utility scale wind and solar energy projects as well as distributed solar energy projects that generate energy for commercial and industrial customers. Company's first project which had a capacity of 25.20 MW and is located in Jasdan, Gujarat. They increased their operational capacity from 545.76 MW as of March 31, 2015 to 986.90 MW as of March 31, 2016 and became the first Indian renewable energy IPP to exceed 1 GW of operational capacity in April 2016. They then doubled their operational capacity to 1.99 GW as of March 31, 2017 and again nearly doubled it to 3.92 GW as of March 31, 2018. To achieve this kind of capacity expansion, company has done several acquisitions like on November 15, 2017, they acquired KCT and its portfolio of 103.10 MW of wind energy projects. On March 28, 2018, they acquired Ostro Energy and its portfolio of 1,108.10 MW of wind and solar energy projects. Company's utility scale wind and solar energy projects were spread over eight states across India with no single state accounting for more than 26.81% of the total utility scale wind and solar energy operational capacity as of March 31, 2018. Company's portfolio as a whole provides a diversified balance of wind and solar projects. Their off takers include a mix of public utilities and private companies with no single off taker accounting for more than 17.74% of their total capacity as of March 31, 2018. RPL sells electricity, including RECs, primarily to central government agencies, public utilities and private industrial and commercial consumers. Their projects benefit from long-term PPAs ranging from 10 to 25 years, thereby enhancing the off take security and long-term visibility of the revenues. As of March 31, 2018, company employed 568 full-time employees. As per financial performance, ICFL has posted total income/net profits of Rs. 396.91 cr. / Rs. 112.13 cr. (FY14), Rs. 528.06 cr. / Rs. 149.04 cr. (FY15), Rs. 644.05 cr. / Rs. 191.64 cr. (FY16) and Rs. 719.92 cr. / Rs. 210.80 cr. (FY17). For upto Q3 of FY18, it has reported net profit of Rs. 164.08 cr. on total revenue of Rs. 585.95 cr. So company has posted consistent growth over last couple of years. ICFL has posted an average EPS of Rs. 25.53 and average RoNW of 11.62% for last three fiscals. Issue is priced at a P/BV of 2.17 as per NAV of 263.96 on 31.12.17. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 24. As per RHP, industry average P/E ratio is 28.66 and listed peers comparison shown in above table. So issue looks fully priced. On BRLM's front, five merchant bankers associated with this issue and have handled 58 public issues in the past three years. When we take recent 10 IPOs of each BRLM then out of those 6 issues opened below their offer price and 4 opened at par on listing dates. As per financials, company's growth is consistent and very good, RoNW is 11.62% for last three fiscals and issue is priced at P/E of around 24 as per latest earnings. Company is an NBFC with principal lines of business, namely corporate lending, SME lending, vehicle financing and housing financing. Last two business segments (Vehicle Finance & Housing Finance) are started in recent past and it may give further boost to company's growth, but increasing bond yields and FD rates may put pressure on margins. So we give "SUBSCRIBE FOR LONG TERM" rating to this IPO.
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