Inox Green plans to become a debt-free company in 2023

Mumbai: Inox Green Energy Services Limited, one of the major wind power operation and maintenance service provider within India, plans to be debt free company in 2023.

The company has Rs 900 crore total debt as on June 30. Company's net debt after adjusting cash and cash equivalent of Rs 100 crore as on June 30 comes to Rs 800 crore.

Around Rs 300 crore will be realized by sell of SPV 'Nani Virani Wind Energy Private Limited,' which would be utilize towards repayment/prepayment of debt. Company plans to utilize net proceed from fresh issue towards repayment and/or pre-payment, in full or part, of certain borrowings availed by the company including redemption of secured NCDs in full aggregating up to Rs 370 crore. The balance total debt amounts to Rs 130 crore which company plans to repay through internal accrual which it expects to realize as a result of high EBIDTA margin in the range of 47-54 per cent during the fiscal 2020, 2021, 2022 and also the fact that reduction in debt will curtail interest cost thereby assisting in enhancing internal accruals further.

Devansh Jain, Executive Director, Inox-GFL Group, had said during the roadshow that Inox Green Energy is one the major wind power O&M service providers within India and enjoys synergistic benefits with Inox Wind. "IGESL has an established track record in wind energy O&M industry of more than nine years. Favourable national policy support will help the growth of the technology driven company, which will focus on predictive maintenance. IGESL has string and diverse portfolio with stable cash flows," he added.

On outlook of sustaining lower debt level in the balance sheet, the company intend to transit towards an asset light model with minimal capital expenditure by, among others, reducing project bids which requires it to develop such infrastructure prior to securing investors to establish wind farms on a plug-and-play basis and investments into the wind power assets of our subsidiaries. The move towards asset light model would curtail need to invest significant capital expenditure towards developing common infrastructure facilities such as pooling substations and transmission lines under the current business model.

Asset Light Model shall ensure that company need less borrowing as capital expenditure requirement going forward shall reduce drastically going forward.