Sembcorp Green Infra Limited IPO

01At a glance

What the company does: builds, owns and runs wind, solar, hybrid and storage power plants in India and sells the electricity under long-term contracts; 105 projects across 13 states and union territories at March 2026 (AP p.4).

Who pays it: power buyers, mostly government: 85.40% of operating capacity is contracted to central or state government entities, and the ten largest offtakers paid 75.10% of FY26 billed power revenue (AP p.11, AP p.12).

Why it is raising money: ₹30,000 million of the ₹37,500 million fresh issue repays borrowings of the company and some subsidiaries; the rest is for general purposes (AP p.7).

How fast it has grown: revenue from ₹22,492 million in FY24 to ₹26,525 million in FY26, while operating capacity rose from 2,685 MW to 3,597 MW (AP p.9, AP p.10).

The one thing to understand: this is a high-margin, heavily indebted business with thin profit. EBITDA margin is about 74%, but interest and depreciation on ₹126,234 million of borrowings leave a return on net worth of 3.71% (AP p.9, AP p.10). The fresh issue is mostly to cut that debt.

02The business, in plain words

A renewable power producer wins a contract in a government auction to supply electricity for 25 years at a fixed tariff, borrows most of the cost of building a wind or solar farm, builds it, and then sells every unit it generates. Once built, the plant is cheap to run; the main costs are interest and depreciation.

A state utility or central agency needs renewable power → it auctions a long-term contract, which Sembcorp Green Infra wins at a fixed tariff → the company builds the wind or solar plant, usually with borrowed money → it sells the power for the contract term and services the debt from the proceeds.

The company has been in renewables since 2005 and designs and maintains its projects in-house (AP p.4). Its newer projects are increasingly "complex": wind-solar hybrids and firm-and-dispatchable projects with battery storage that must deliver power at set times (AP p.4).

Earnings equation: Revenue ≈ capacity × plant load factor × hours × tariff. The overall plant load factor was 23.69% in FY26 (AP p.10).

03Where the money comes from

Source: AP p.9.

The ten largest offtakers paid 82.61%, 76.57% and 75.10% of billed power revenue in FY24, FY25 and FY26 (AP p.11). Most contracts are with central or state government entities, whose terms the company has little room to negotiate (AP p.12). Tariffs are generally fixed for the life of the contract (AP p.12). The document says it operates only in India and reports one segment (AP p.4).

04The growth record

Source: AP p.9, AP p.10.

Source: AP p.10.

05What the growth is made of

New solar plants. Solar capacity more than doubled, from 620 MW to 1,420 MW, while wind barely changed (AP p.9). Revenue grew 17.9% over the two years, less than the 34% growth in capacity, partly because much of the solar capacity came on line during FY26 and because load factors were lower than in FY24 (AP p.9, AP p.10, our arithmetic). Wind output depends on the weather: the wind load factor fell from 26.44% to 24.14% in FY25 before recovering (AP p.10).

Profit fell in FY25 and recovered in FY26 (AP p.9).

06Earnings quality

Operating cash flow is steady at about ₹19 to 20 billion a year, several times reported profit, because depreciation on the plants is large (AP p.9). The document's "cash profit" was ₹12,206.82 million in FY26 (AP p.10). Receivables fell from 38 days of revenue in FY25 to 29 days in FY26 (AP p.10).

The auditors expressed no qualification or emphasis of matter; the document notes some CARO and audit-trail observations that required no adjustment (AP p.13).

Other income was ₹1,759.30 million in FY26, 37.4% of profit before tax of ₹4,709.88 million (our arithmetic, DRHP p.94).

07The balance sheet

Source: AP p.9, AP p.10.

The weighted average interest rate on borrowings was 7.75% in FY26 (AP p.10). Investment outflows of ₹29,498 million in FY25 and ₹18,248 million in FY26 went into new plants (AP p.9). The company must also post bid, connectivity and performance guarantees under its contracts (AP p.12).

08What the money is for

Source: AP p.7.

A pre-IPO placement of up to ₹7,500 million may reduce the fresh issue (AP p.7). Repaying ₹30,000 million would cut borrowings by about a quarter of their March 2026 level, our arithmetic.

09Who is selling

No one. The issue is entirely new shares; there is no offer for sale (AP p.1).

10Promoters

The promoters are Sembcorp Utilities Pte Ltd and Sembcorp Industries Ltd (DRHP p.1). The board has six directors: the chairman Vipul Tuli and Yeo Zhiwei as non-executive directors, the managing director Appakudal Nithyanand, and three independent directors (AP p.13).

11Who already owns it

Sembcorp Utilities Pte Ltd holds 100% of the 3,980,409,875 shares before the issue, with nominees (AP p.8). It has been putting in equity: shares acquired in the year before the filing cost a weighted average of ₹23.18 each, and over three years ₹20.37 (AP p.13). Net asset value was ₹23.47 a share at March 2026 (AP p.9).

12What changed just before the IPO

• Equity from the parent: share capital rose from ₹35,824 million to ₹39,804 million in FY26, at prices between ₹23.17 and ₹23.25 a share in the last year (AP p.8, AP p.13).
• Complex projects: firm-and-dispatchable projects under construction rose from 450 to 1,969 MW/MWh in FY26 (AP p.9).
• Solar additions: operating solar capacity rose by 635 MW in FY26 (AP p.9).
• Last allotment: a rights issue of 25,806,451 shares at ₹23.25 each on March 18, 2026 (DRHP p.114).
• Auditor: no change in the statutory auditors in the three years before the filing (DRHP p.100).
• Public company: the company converted into a public limited company, with a fresh certificate of incorporation dated February 20, 2026 (DRHP p.3).

13Capacity and expansion

Source: AP p.9.

Of this, 1,784.70 was contracted under power purchase agreements and 2,255.00 awarded but not yet contracted at March 2026 (AP p.9, AP p.10). The document lists construction delays and cost overruns among its main risks (AP p.12).

14Market size and industry structure

India had about 533 GW of installed generation capacity at March 2026, about 52% of it renewable including large hydro, according to the CRISIL report cited in the offer document (AP p.7). Renewable capacity grew from about 133 GW in FY20 to about 275 GW in March 2026, mostly solar (AP p.7). New capacity is awarded mainly through competitive auctions (AP p.12).

15Competitive position

What the document claims, and what it rests on:

• Among India's ten largest renewable producers by operating capacity at March 2026, per CRISIL (AP p.4).
• Complex-project capability: hybrids and storage-backed projects (AP p.4).
• In-house EPC and O&M since 2005 (AP p.4).

Against that: auctions are highly competitive, tariffs are fixed, and most buyers are government entities with strong bargaining power (AP p.12).

16Peers the company named

Source: DRHP p.161, DRHP p.162. The document also names ACME Solar Holdings.

The document gives an industry P/E range of 23.48 to 147.47, average 89.24 (DRHP p.161). For Sembcorp Green Infra it gives FY26 earnings per share of ₹0.94, net asset value per share of ₹23.47 and return on net worth of 3.71% (AP p.9, DRHP p.162). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Debt. Borrowings of ₹126,234 million, net debt at 5.5 times EBITDA (AP p.10).
• Buyers. Ten offtakers pay three quarters of billed revenue, most of them government entities on fixed tariffs (AP p.11, AP p.12).
• Weather. Output depends on wind and sun; load factors varied by up to two points a year (AP p.10).
• Construction. 4.04 GW/GWh is under construction; delays can trigger penalties and cost overruns (AP p.12).
• Contract terms. Power purchase agreements may contain onerous terms, and breaches can lead to lower tariffs or termination (AP p.12).
• Guarantees. Bid, connectivity and performance guarantees can be invoked (AP p.12).

18Litigation and regulatory matters

Source: AP p.14. Amounts are to the extent the document could quantify them.

The largest amounts are in claims the company and its subsidiaries have brought, not claims against them (AP p.14).

19Related-party transactions

The parent is the sole shareholder and has funded the company's equity through share issues at around net asset value (AP p.8, AP p.13). The summary sections read show no large trading relationship with Sembcorp group companies.

20What the offer document does not say

In the sections read for this study, the document does not give:

• Which borrowings will be repaid and at what interest rates, in the summary read.
• The average tariff across the portfolio.
• The cost and timeline to finish the 4.04 GW/GWh under construction.
• How much of the awarded capacity has power purchase agreements pending signature, and with whom.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What is the average tariff on operating and contracted capacity, and how does it compare with recent auction results?
2. How much more debt will the 4.04 GW/GWh under construction need after ₹30,000 million is repaid?
3. Why did overall plant availability fall from 97.14% to 95.96% over two years?
4. What are the terms of the firm-and-dispatchable contracts, and what penalties apply if power is not delivered at the promised times?
5. What return on equity does the company target once the debt is reduced?

2Sources and cited facts

This study was read from 2 documents the company filed. The 62 figures it cites are listed under the document each came from, with the page and the sentence as printed.