Azure Power Global Limited, leading independent renewable power producer in India, announced issuance of a dollar green bond of US$414,000,000, through its wholly owned subsidiary, Azure Power Energy Ltd (the “Bond”). The Bond, maturing in 2026, will be issued at a coupon of 3.575%, i.e., lowest ever coupon in the high-yield segment for any business out of India and lower by 27.5 bps from the lowest offering from any Indian renewable energy company till date.
The order book saw bids in excess of USD 2 billion, with more than 60% of the issuance placed with US and European investors, thereby demonstrating, global recognition of credit and operational strength of the Group. The transaction also underscores Group’s continued ability to raise debt capital at a lower cost compared to its peers, leading to significant improvement in the overall return profile of the Group.
The Bond has been certified by Climate Bonds Initiative as a Green Bond and is the third solar Green Bond offered by Azure Power Group after issuances in 2017 and 2019. The Company will primarily use the proceeds to refinance it’s existing 5.50% US$500,000,000 Green Bond issued in 2017 and due in 2022, and is expected to reduce debt cost by over 200 basis points in hedged INR terms for its 611 MW operational solar projects portfolio offered under the bond.
The Bond has a tenor of 5 years with amortisation and waterfall structures built in and is a leverage-positive transaction for the Group, demonstrating Group’s strong focus on creditor interests along with value accretive approach in business conduct.
Speaking on this momentous occasion, Mr. Ranjit Gupta, Chief Executive Officer & Managing Director, Azure Power said, “This is truly a remarkable transaction for the Indian Renewable Energy sector in the global markets, being the lowest ever coupon in the high-yield segment for business out of India, and a landmark for Azure Power Group in its journey of over 13 years in this space. With this 3rd Green Bond from the Group, primarily to refinance our 1st Green Bond issued in 2017, we have completed one full cycle of our successful engagement with global debt capital market investors. We are grateful for our global and domestic investors’ continuous support and faith posed in us as the world class, credit and corporate governance focused renewable power group in India.”
Barclays, HSBC, Standard Chartered Bank, Credit Suisse and MUFG were the Joint Global Coordinators and Bookrunners for the transaction along with Jefferies, Roth Capital Partners, Société Générale and ICICI Bank as the Joint Bookrunners.