Thank you for standing by and welcome to the ReNew Energy’s Third Quarter Fiscal 2022 Earnings Call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to Mr. Nathan Judge. Please go ahead.

Thank you and good morning everyone. And thank you for joining us. On Thursday evening the company issued a press release announcing results for the first nine months and third quarter of fiscal 2022 ended December 31, 2021. A copy of the press release and the presentation are available on the Investor Relations section of ReNew’s website at www.renewpower.in. With me today are Sumant Sinha, Founder, Chairman, and CEO; and Kailash Vaswani, President of Finance and Interim CFO. Sumant will start the call by going through an overview of the company and recent key highlights. Kailash will then provide an update on the quarter and then we will wrap up the call with Sumant reiterating our adjusted FY22 EBITDA excluding the impact of weather, our forecast of $810 million. After this, we will open up the call for questions. Please note, our Safe Harbor Statements are contained within our press release, presentation materials, and available on our website. These statements are important and integral to all our remarks. There are risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements. So, we encourage you to review the press release we furnished in our Form 6-K and presentation on our website for a more complete description. Also contained in our press release, presentation materials, and annual report are certain non-IFRS measures that we reconcile to the most comparable IFRS measures, and these reconciliations are also available on our website, in the press release, presentation materials, and annual reports. It is now my pleasure to hand it over to Sumant.

Yeah, thank you Nathan and good morning to everybody on the call. Our company RNW has been publicly listed on NASDAQ for six months and a lot has happened since the last earnings call in November, that we are in excited to recap for you. We continue to believe that RNW is one of the most compelling investment opportunities in the renewable energy sector today. We realized that many investors are new to the story so I would like to provide a quick recap on Page 5. ReNew is one of the leading renewable energy companies in India and also one of the largest renewable energy companies globally. More than 70% of our portfolio is already operating and most of the assets that are in development have PPAs that are for 25 years with fixed tariffs providing predictability. Our portfolio is also balanced between solar and wind. Our scale and vertical integration differentiates us in multiple ways, including being more efficient and lower cost, having great access to cheaper capital, and investing for the future to retain our competitive edge in a young and rapidly evolving market whilst maintaining a higher EBITDA margins. We have a long track record of execution and have delivered equity IRRs of between 16% and 20% consistently over time. We are emphatic about capital discipline as evidenced by our recently announced share buyback. India is now one of the largest and fastest growing renewable energy markets globally. And is committed to increasing the installed capacity of renewable energy by over four fold to 2030. Renewable energy makes sense for the consumer as it is the lowest cost source of new electricity capacity in the country today. The Indian renewables market continues to mature and this is really playing to our strengths. On Page 6 we…

Thank you Sumant. Looking at Page 12 which provides highlights of the third fiscal quarter, we have 7.3 gigawatts operating as of today after the addition of 1.1 gigawatts this quarter. The 1.7 gigawatt addition this fiscal year was particularly commendable, given the challenges of COVID and supply chain disruptions. Our revenues are labelled total income under IFRS in the first nine months of fiscal 2022 rose 26% on the year, while our adjusted EBITDA increased by more than 27% and the cash flow to equity jumped almost 116%. Turning to Page 13 which provides a reconciliation of weather adjusted EBITDA to our reported results. Weather adjusted EBITDA in the first nine months of FY 2022 was $626 million or about 77% of our FY 2022 weather adjusted EBITDA guidance of $810 million which puts us on track to achieve our guidance. Weather improved from last year although it remains below normal levels and has had about $55 million negative impact in the first nine months of this fiscal year. We do expect our operating capacity will be around 8.2 gigawatt by year end although it is possible that commissioning of some small amount of capacity may slip into the early parts of April. We have recently find binding turn sheets for another 500 megawatts of acquisitions which will add to the above number. One of the frequent questions we get asked is about supply cost inflation which we've discussed on Page 14. The project cost for megawatts added during the first nine months of this fiscal year has very little impact or higher supply costs. Whilst there has been some increase in cost relative to budget for projects, we are delivering for the remainder of the year after considering the lower financing costs that we are realizing in the…

Yeah, thank you Kailash. I'm very happy to report that despite the uncertainty around supply chain issues and COVID, we do consider to be on track with our adjusted EBITDA guidance for this year. We do believe that we will achieve $810 million of EBITDA after excluding the negative impact of weather which we have said has been about $55 million so far to the first nine months of fiscal 2022. As it looks currently we also should be having 8.2 gigawatts operations by around April or May depending on when our acquisitions closed. Turning to Slide 17, we are also reiterating our guidance on a run rate EBITDA basis. Once our 10.2 gigawatts portfolio is completed over the next 18 months or so, we expect EBITDA will be at least $1.1 billion. We expect that we will have about $5.7 billion of net debt on our books, only 4.9 times debt to run rate EBITDA leverage ratio, once the 10.2 gigawatts is fully completed. We expect our cash flow to equity run rate to improve meaningfully as well to $400 million on an annualized basis once 10.2 gigawatts are operational. Importantly, our portfolio is fully equity funded. In fact, we do not need to issue any new shares to reach 18 gigawatt. And at 18 gigawatt, our cash flow generation should be sufficient to self fund 3.5 to 4 gigawatts of growth annually without raising any external. Now with this let me stop and we will of course be happy to take any questions. Thank you.

Thank you. [Operator Instructions]. Our first question comes from Julien Dumoulin-Smith from Bank of America. Please go ahead.

Hey this is actually Kody Clark on for Julien. Thanks for taking my question. So first, can you give us some additional color on the year and 2022 operating portfolio guidance of 8.2 gigawatts. We have 500 megawatts in acquisition coming down the pipe, maybe they slip a month or two in the remaining 300 megawatts. Is it organic or there are additional…?

No, it is organic. So we will be commissioning another approximately about 300 to 400 megawatts between now and the end of the financial year. And then the balance as we said is the acquisition.

Got it. In confidence in the adjusted EBITDA guidance is not really impacted because these are small contributions to the full year guidance anyways?

That's right, that's right.

Okay, and then just to follow-up around valuations for renewables projects, just wondering if you can talk through kind of the strategy of potentially selling minority stakes in assets. It seems like it could be accretive to be able to redeploy the capital into new growth projects or even further support the buyback that somewhere shares are trading, just curious if you have any thoughts there?

Yes, so you are absolutely right. I think currently we see sales in the fall. Assets in India and the private market at about anything from 9 to 10 times. And so there is an opportunity, and we saw that in the sale of our rooftop portfolio which is a 9.5 times. So our view is that we should be for the quality of assets that we have, we should be able to get those kinds of multiples going forward. And frankly, there are a number of people who -- financial investors and others who would like to acquire these assets from us and be in partnership with us. So that is something we can certainly look at doing and recycle our capital and sort of increase the velocity of our capital a little bit. Historically, we have not done that, but I think it's something that we are now looking at doing more of as we go forward. And of course, with the capital that we can get freed up, we can then deploy that into other high return projects or use that for the buyback that we've already announced. So those are obviously uses of that capital. And so that's really what we are looking at, at this point of time. And of course, what that also means is that for the capital that we would have invested in those projects, the IRR on those then obviously tends to go up quite substantially because we have been able to sell minority stakes at much lower than equity IRRs for those projects. So it's actually a fairly positive thing for us to do. It allows us to increase the returns equity on invested capital and allows us to recycle capital at a faster pace and deploy it into whichever areas we feel are giving us the best returns.

Okay, understood that's helpful. And just one last one if I can, just around weather impact, it continued to be a drag in the third quarter and just wondering if you have any updated thoughts on maybe reevaluating the wind resource baseline across your portfolio at year-end?

Yeah, we will certainly look at doing that. As you know, we had not a great year the year prior. And then of course, this year has also not been good. Of course, the years before that were by and large in line with the long-term forecast, but I think having had two years of subpar performance, we will I think over the course of this current year, we will look at relooking at the long-term forecast. We'll hire an external agency to help us do that. We'll probably wait for this current high wind season over the course of the middle of this year to get done so that we have a little bit more data. And I think then we'll reexamine and see whether there is any merit or reason for us to look at changing any of our forecasts. And if there is, of course, we'll be let you all know. But we will do a considered thoughtful exercise on that.

Okay, got it. Thanks so much for the time. Appreciate it.

Thank you. [Operator Instructions]. Our next question comes from Justin Clare from ROTH Capital Partners. Please go ahead.

Hi everyone, thanks for taking the questions here. So, first off on fiscal year 2023, just wondering if you could give us an update on how you're thinking about portfolio growth as we move into next year, if you could share how many megawatts you might add for wind or for solar next year and then how much could come from in-house development versus acquisitions? And then maybe also how you're thinking about the potential for new auctions next year and whether you could win in new auctions and then also add those assets over the next year?

Yeah Nathan, do you want to talk about guidance for next year?

Yeah, hi Justin. So when you look at our expectations for next year, we have essentially going to be bringing on roughly about 18, well, 10.3 gigawatts over the next 18 months from our current level. That does not include the 500 megawatts of binding term sheet acquisitions that we've just announced. So as we look at it today, right now we're expecting that to come on kind of mid-summer of next year. And then we're also continuing to evaluate the M&A market. Clearly, M&A markets are dependent upon valuation and obviously, our share price is at a level that we view positively relative to that market. So we still continue to think there's plenty of opportunity and we'll make that commitment to capital where the highest return is. Sumant, do you want to talk about the outlook for the market?

Yeah, look I think the outlook for the market is extremely positive still. As you all know there was a backlog of PPAs that SEKI [ph] had to still get done. A lot of that backlog is now being cleared in light of new demand that is coming in from the utilities. As we saw over the course of the COVID impacted year, the power demand growth was actually flat more or less. But in the current year -- current financial year, we've seen power demand growth at about 5% to 6%, and the expectation is that that will continue over the course of the next year as India's GDP continues to stay robust between this year and next year. And as that demand is getting manifest, clearly the utilities need to buy more power and that therefore is leading to more demand, which is obviously very fundamental to having more bids. In addition, there are new sources of demand coming in. One, of course, is the corporate PPA market, where there is now increasing pressure on corporates as well as for them and from their standpoint, a potential cost reduction opportunity by buying renewables directly from people like us. So we are seeing that market growing quite substantially. As well as the carbon market, actually, because there are a number of people who are coming in and looking only to buy the carbon portion. And then, of course, there are two other sources of demand. One is the Indian Railways, which has pledged to go net zero by 2030 and consumes almost about 3% to 4% of India's total electricity generation. So that is something that they are also coming into the market now in a fairly big way. And then, of course, the opportunity for green hydrogen, which, as I said in my remarks, the government has now announced a green hydrogen policy and is going to be pushing that rollout quite aggressively. So all of those are going to lead to increased demand. So you'll see probably therefore more bids coming up through the course of this year as the backlog of the old projects gets cleared up. And all of that therefore will result in significantly increasing everybody's pipeline, including our own fall commissioning between one and a half to two years out from this point on. So I think that's how the demand side will develop. It's looking fairly robust at this point in time, and I guess that's good for all of us in the industry. So let me pause there.

Okay, great. No, that was really helpful. And then I guess if we could shift to just the supply chain here, we've heard about delays in wind turbine manufacturing due to challenges with the supply chain and then not being able to get the materials that they need. So can you just give us a sense for are you getting your turbines on time and the equipment that you need to keep projects kind of on track here or are you seeing potential for delays?

So, you know, Justin for the project that we had to commission this year, we've got all the turbines for those projects and those in any case have to be done literally over the next month or two. So those are all under control. For projects that will be commissioned over the course of the next financial year, those deliveries are still a few months out, and at this point we haven't -- at least our suppliers have not indicated to us any delays on their supply schedules. So, I don't have anything specific to report to you on that front right now. But now that you mentioned it to me, I'll keep an eye on it and in fact, proactively going to have these conversations. But so far, frankly, we have not heard anything on that front from our suppliers.

Okay, alright, good. [Multiple Speakers]

The only other thing I was saying is that we have pretty diversified supply of wind turbines coming this year from Vestas and Siemens Gamesa and Envision, so we are not overly dependent on any one of them. And frankly, they have all sort of dialed back on their capacities for India already and those I think are pretty much at least as far as they've indicated to us under control right now.

Okay, good, and then maybe just one more from me on interest expense here or just interest rates generally. I think you have 29% of your debt is variable rates right now. Just wondering if you're considering fixing that, fixing those rates and if you have the ability to do so? And then how are you thinking about interest rate risk for projects that you're still developing or building, any way to hedge interest rate risk or any way -- how are you thinking about that?

Yeah, I let Kailash answer that question. Kailash.

Yeah, Justin. So Justin, as far as the variable rate interest loans are concerned, we have -- we are working on that actively and we expect that out of the 27% to 28%, at least 20% would be fixed in the next 6 to 12-month time period. And what we are also trying to do, wherever we have variable, we're negotiating much lower rates. So, we're seeing rates at even below -- at around 7% or there abouts. And then that was actually then giving us the ability to wait out some of the interest rate increase also which happened. So, we try to manage rates in that fashion where variable rates are at lower rates, at closer to 7 to 7.5. Fixed rates are between 8 to 8.5 and then we lock it in, and there's that 1% differential which we see more or less. To your second part of the question, as far as projects which are under development is concerned, so again, we are borrowing in some of these projects dollar loans where we hedge the dollar exposure and the interest rates out to five years. And that fixes the rate and the upfront spread that we negotiate is relatively lower and that gives us the ability to still end up at the same level because the hedging costs also sort of narrow down a bit as interest rates increase. So, we are seeing those play out at this point. We are borrowing rupee for financing the projects, there again we are borrowing floating to some extent, and wherever possible we are also getting fixed rate loans, we are fixing it for the long term. So through that we are managing. And lastly I'll say that for our projects, which are under development or which we bid in future, we will factor in the interest rate at a higher level, our long term rate interest rate assumptions are closer to 8.75% in that range. So that gives us enough for runway from here now on to absorb any interest rate increases.

Okay.

I think Justin -- Justin let me just add to that and say that in India, interest rates at this point at least have not really gone up. And at its latest policy meeting, the RBI continued to adopt a fairly dovish tone. And Indian education is still within the RBI’s -- they have a band of 4% to 6%. So it's still within that band although at the upper end of that range. So our expectation is that Indian interest rates at least will continue to be not increasing very substantially at this point. And so that gives us the opportunity of shifting a little bit more into rupee borrowing and within that also, as Kailash said, if we do take the risk of variables, we tend to get much lower rates. But as we all recognize interest rates might trend upwards over the next year or two. And therefore, we are looking to fix a substantial part of even the variable rate borrowing that we have. And all of that is happening at rates of around 8%, which is significantly below our current overall cost of borrowing at 8.9%. So there is still an opportunity for us as we continue to fix rates to bring down our cost of borrowing further down from where we are. And of course for new projects as Kailash said, they're already assuming higher rates and so therefore, we are building that into the tariff. So we will not be for new projects at least being impacted by higher rates going forward, because we would have build that into our return expectation calculations. Thanks.

Okay. Appreciate it. Thank you.

Hi. We've had some yeah, we've had some online questions that I'll pose from here. When -- starting with the first one, there's a list of questions here. So just starting with the first one. Can you talk more about the Intelligent Energy Solutions bidding this year and have we seen new bids with storage coming up?

Yeah, so there one bid that the government has announced for storage, and that is 1000 megawatt storage bid that should be coming up for bidding fairly soon. There are a number of States also that have announced standalone bids as well, of course smaller in size so we're seeing whether we want to participate in those. But I would say that the market for standalone storage bids is also likely to grow quite substantially and so apart from bidding for State renewable energy projects, we will also be bidding for the battery projects. In addition to that, the government has now also announced by the way, a fairly significant build out plan for transmission infrastructure. And that is something that we are also interested in looking at, because they are very often tied into commissioning of our new renewable energy projects. So having control on the transmission infrastructure becomes fairly useful to have. So we're looking at that as another opportunity. So in terms of Intelligent Energy Solutions also, as I think we may have said earlier, there was a 2.5 gigawatt bid that happened last year, that had to be cancelled for some bidding issues, that is likely to get tendered out again in the next couple of months time. So that will be the first bid that will happen. And then as I said, the Indian railways is looking at doing their own round the clock Intelligent solution bids as well. So the first tender that they are likely to come up with is going to be at least 1 gigawatt in size or there about. And keep in mind that each of these Intelligent Energy Solutions requires renewable energy which is almost three times the capacity of the bid itself, because they all require much higher plant load factors. So a 2.5 gigawatts bid, for example, would require an installation of almost 7 to 8 gigawatts of actual renewable energy capacity of wind and solar. So these are actually there for fairly large sized tenders and these are all likely to be coming up in the initial few months of the next financial year, let's say Q1 or there about. So I suspect that there'll be quite a few of these kinds of bids plus green hydrogen also that said, will require solutions which also require more stability of power, and therefore also will require the guaranteed energy solutions. And as we see more of those requirements coming up, those will all feed into the same combinations of wind and solar and storage to optimize the overall cost. So I think we will be -- we do believe that there'll be quite a number of such options and bid that will be coming up over the course of the next 12 months.

And then just if you could follow up with a little bit of color on what you're seeing in the corporate PPA market, we have flagged this as a high return, which makes sense for corporates, it's green and lowers their cost. What are we seeing, are we seeing more enquiries and when can we see a material pickup for this market?

Yeah, we're seeing a lot of inquiries now and frankly, we've been working on this market for the last two years. And, in the beginning obviously the going was quite slow because, it took corporates a little bit of time to understand the regulatory environment and issues, and what kinds of solutions are possible. And, in different -- depending on where the customer is connected in terms of their power supply, different kinds of solutions and depending on the State, the regulatory environment, different kinds of solutions have to be structured for them. And then the selling cycle has been fairly long. But now as I said, getting to the point where we beginning to convert more of these PPAs, and Nathan, I'm not sure that we've announced separate standalone number for how many corporate PPAs we've signed. So if you haven't, then I won't talk about that right now. But certainly, it's something that we'll probably be coming out with at some point in the near future, in terms of how many megawatts of PPAs we have converted. But certainly we are seeing that the level of inquiries is quite good and therefore, I see that the market is likely to grow more as we go forward. And hopefully, over time, we'll be able to give some more tangible numbers about that.

Thank you Sumant. And just to change track here and talk about the wind resource study. Can you give us an idea of how the numbers are trending relative to a 20-year timeframe and what does -- what's the sensitivity to our EBITDA for every 1% change relative to normal over time?

Yeah, and Nathan I presume these are questions from investors as opposed to from you. Just kidding, I was just pulling the leg. Yeah, as -- if you look at the last 20-year analysis for which, we have measured actual wind mark data in India, we find that wind speed has decreased from the first decade of the 2000 to 2010 time period to the second decade of 2010 to 2020. There's been a reduction in wind speed by about 0.9% or about a 1% and that has approximately a 2% impact on the overall generation of wind projects. So, it's sort of within the band of statistical insignificance actually. There is 1% delta, which is why wind assessment companies don't really tend to factor in a decadal drop in wind data. Now, having said that, we know that the last two years particularly have been worse. And so if I factor in the last two years as well, and take the last 20 years, including the last two years, then that drop actually increases from about 7.8% to about 1%. And so -- just a little bit over 1%. So that's really what the overall numbers have been. And because the last two years have particularly sort of been bad and have caused us to have this significant weather adjustments, that is why we intend to now do a deeper dive into this whole issue. And let me also just tell everybody that the way we do our wind forecasts is obviously based on satellite data of the last 30 years, then we put up wind mass, we measure wind actually for at least a couple of years in that site. We triangulate that against the wind -- the satellite data, and we do our own internal assessments first.…

And Sumant just if I can add to that point as well. If you look at the sensitivity and put that into context, every one percentage point relative to normal is about $10 million. I'm going EBITDA. So we are talking about that kind of size and scale of this study. At the end of the day, it's not likely to have a huge impact on our results, but we'll have to do the study to make sure.

Going to DSOs, can you provide some medium term guidance on DSOs given the changing mix towards Central and recent developments around implementing faster payments?

Yeah, so I can't give a specific sort of a numerical number, but I will try to give some directional guidance. So, as all of you know, as our portfolio shifts more and more towards SECI as our as our off taker, and out of the 10.2 gigawatt portfolio, 50% is with SEKI as the off taker. Our DSOs will naturally tend to trend downwards, because SEKI -- our SEKI portfolio we don't really see any delays at this point in time. And so therefore, there is going to be a structural improvement in our DSOs just on account of that one factor as we go forward. Because clearly, as we go from 10 gigawatts to 15 gigawatts, most of the additional 5 will be either SECI or corporate off takers, which both tend to pay on time. The existing capacity that we have directly with State off takers, which is currently about 5 gigawatts, that will then become a smaller part of our portfolio, and therefore the overall weighted impact average of that will come down. So that's point number one. The second point is that there are four States in particular that account for the bulk of our receivables, almost about 80% of our receivables. And those are States that we're obviously actively working on right now. We've decided, as we have said earlier to go to court on enforcing the contract that we have with these States for payments on time. And wherever we are going to the courts, the courts are inevitably ruling in our favor. Two such rulings we have already got from the State of Karnataka and the State of Maharashtra. We are now in a third court in the State of Madhya Pradesh and a fourth State in Telangana, which is one of…

And Sumant as you were answering that question, I just got another one that comes in that's related and it's just about the risk of renegotiation that is possible given the current environment?

No, that is not a risk Nathan at all in India. None of the DISCOMs is at this point talking about renegotiating any contracts. As I said, the only one that is there is Andhra Pradesh, which has been going on for the last two years. None of the other states has picked up on that or has chosen to take that particular -- that same approach forward. And forget renegotiation of contracts, courts are ruling in our favor on late payments. And so therefore, there's fairly well established case law on enforcement of these contracts, including the payment, let alone renegotiation of the tariffs or anything. So I think that's not something that is at all a possibility in the Indian context at this point.

And then finally, on the final question, was related to the Electricity Act, which has been pushed out to the winter session in Parliament and how do you see that play in context of reforms focused on consumer tariffs as well as the distribution -- as well as on the distribution side?

Yeah, so that's -- the Electricity Act actually had a number of positive proposals, including a stronger regulatory environment, and so on. The government, I think, has chosen to not push that forward or push that forward in a slightly more watered down way. But I think at the same time, what they are doing is that they are taking the different elements of this -- of the Electricity Act, and trying to push that through separately. So for example, the whole issue of having a national renewable purchase obligation projection, which was earlier being contemplated in the Act, is not something that the government is trying to push separate from the Act. And the Minister, in fact, in recent conversation with people from the industry was saying that there would be eventually in the future, a national RPO trajectory which would then not give States the luxury or the freedom to have their own trajectory. There will be one central national trajectory that all the States will then have to pursue. So those kinds of things are happening, even outside of the Electricity Act. So I think, look, the reality is that the central government is very, very supportive of our sector. They recognize that deeper electrification, and the greening and the decarbonization of the electricity sector is absolutely fundamental to meeting our demands, our electricity demand or energy demands in the future, at the lowest -- in the newest cost manner possible. It is also consistent with commitments that the Prime Minister has made in Cop 26. And it also is essentially an opportunity for the country to decrease our energy dependence. We currently as you would know, import almost $150 billion worth of fossil fuels every year, including coal, we import almost $20 billion worth of coal every year as well. And so this is a way that the government realizes is a way to cut dependence on the fossil fuel imports. So there is that all branches and levels of the government very significant push forward for decarbonizing the entire energy value chain in India. So I think that is something that underlies a lot of the actions that the government will be taking in recent months, and will continue taking the future as well.

Thank you Sumant. That's the end of our questions. We really appreciate everybody joining and please feel free to reach out to us. My email is Nathan.judge@renewpower.in and really appreciate everybody joining.

Yeah, thank you, everybody.

That does conclude the conference for today. Thank you for participating. You may now disconnect.