Hero Future Energies & Azure Power Aims to Accumulate $1 billion from Bond Sale

Hero Future Energies and Azure Power has announced that they are gearing up to realize $1 billion by vending bonds to foreign investors over the next few weeks in separate offerings. The Delhi-based green power competitors are looking to mop up $500 million each and have selected investment banks to underwrite the offerings.

Hero Future Energies, led by Rahul Munjal, a nephew of Pawan Munjal, is stimulating a plan that was cancelled for two years. For Azure Power, it is the second such offering, after it raised $500 million two years ago.

The Munjal-led company raised $125 million from World Bank arm IFC in January 2017 and is in dialogue with a consortium of investors to raise $200 million in equity funding.

Hero is working with three global investment banks for the latest bond sale, while Azure has selected HSBC, JPMorgan, Credit Suisse and Barclays. The two companies have a mixture of wind and solar generation projects, however Azure leads in terms of installed capacity of rooftop solar plants.

Canadian pension fund, La Caisse de Dépôt et Placement du Québec (CDPQ), owns 40% in Azure Power and is one of its prevalent institutional backers.

The top two renewable energy companies by generation capacity — Renew Power and Greenko — have mutually raised nearly $2 billion from bond sale to overseas investors over the past two years. Renew Power lately concluded a $375-million sale of green bonds.

“Indian issuers were neglected by international bond investors last year due to anticipation of higher interest rates in the US, leading to drying up of dollar bond issuances,” an executive with a global investment bank said. “But that has changed as interest rates in the US haven’t risen as expected.”