In a strategic move towards achieving a debt-free status, INOX Green Energy Services Limited (INOX Green), a prominent player in the Indian wind power industry, has announced its decision to divest its entire 100% stake in Nani Virani Wind Energy Special Purpose Vehicle (SPV).

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Speaking to CNBC-TV18, Devansh Jain, ED of InoxGFL Group said, our target for this financial year is to make INOX Green net debt free. And I am happy to say we are on track for that.”

He further elaborated, “The asset values close to about Rs 290-300 crore odd, adjusted for the numbers, which are few crore which may come in depending on when the actual consummation of the transaction takes place. In INOX Green, we had a net debt as of 31st, March 2023 of Rs 350 crore odd so broadly with this transaction, about Rs 290-300 crore goes off the balance sheet and from internal accruals, which have happened from first of April this year and over the course of this year, we should be a net debt free company over this financial year.”

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Jain anticipates that the consummation of the deal will take approximately 3-4 months. He said, “I think it should take about three to four months because we need connectivity transfer approvals, banking approvals as well as ordinary regulatory approvals. Otherwise, frankly speaking, it should be I mean, it's a plug-and-play deal. But normal connectivity transfers and debt transfers etc. typically take about two to three months.”

One significant advantage of this divestment is that interest costs will become negligible after the repayment of all debt. He said, “At the INOX Green level it may become zilch. We may have Rs 1-2 crore of other normal banking costs, but I am sure the interest earnings on the free cash flow would be far more than in order to take care of Rs 1-2 crore of normal banking charges.”

Giving details about the buyer of assets Jain mentioned that it is a group C&I platform which also has private equity investors as well as group investing in it. He said, “It’s a group C&I platform setting up a very large C&I play. we had a couple of other term sheets, but given that the Gujarat policy is now in the public domain, and the group itself needs significant power requirements and a lot of people wanted to partner with us on building out a new vertical so we subject to shareholder’s approvals decided to, at the best price acquire it in one of the group C&I entities. It is a C&I.”

The stock was trading at Rs 65.31 on the BSE, lower by 1.06 percent. It has lost over 6 percent in the last one month.

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(Edited by : Shweta Mungre)