Virescent’s Renewable Energy InvIT Raises ₹6.5 Billion via Domestic Bond Issuance

The proceeds will be used to fund its immediate acquisition-related debt requirements

February 7, 2022


Virescent Renewable Energy Trust (VRET), a renewable energy infrastructure investment trust (InvIT) by Virescent Infrastructure, raised ₹6.5 billion (~$87 million) through domestic bond issuance across 7.33-year (₹1.5 billion (~$20 million)) and 10-year (₹5 billion (~$67 million)) tranches.

The average quarterly coupon of the bonds is 7.93%, fully fixed for the entire tenor. VRET, backed by KKR, a leading global investment firm, will use the bond proceeds to fund its immediate acquisition-related debt requirements while expanding its portfolio from the existing 450 MWp of operational solar projects.

VRET maintains this transaction is the largest single series issuance of ₹5 billion (~$67 million) in a 10-year tenor by a renewable energy company.

CRISIL and India Ratings have assigned the bonds a ‘AAA Stable’ rating.

“This bond issuance is a significant achievement in VRET’s journey, demonstrating our debt raising capabilities to achieve competitive pricing and longer maturity profiles. With VRET being a recently established entity in September 2021 and only five months into our journey, we are pleased to have issued such long tenor bonds and attracted marquee institutional lenders such as the government-backed India Infrastructure Finance Company Limited as well as the NIIF promoted Aseem Infrastructure Finance Limited,” said Sanjay Grewal, CEO, Virescent Infrastructure.

In the recent union budget announcement, the government announced the issuance of sovereign green bonds to help push renewable energy projects. The new initiative is expected to encourage more renewable energy companies to issue green bonds in the domestic market at competitive pricing.

In November, VRET had raised a total of ₹21.5 billion through listed non-convertible debentures and long-term debt financing. VRET had also secured ₹10 billion (~$134.41 million) in its maiden issuance across 3, 5, and 7 year-tranches. The proceeds were expected to help refinance existing debt at the special purpose vehicle level and fund future acquisitions.

Virescent had tied up an additional ₹10 billion (~134.41 million) in long-term financing from L&T Finance to ensure a complete debt tie-up of its near-term acquisition pipeline.