Thank you for standing by and welcome to the ReNew Energy Fourth Quarter Full Year 2022 Earnings Conference Call. All participants are in a listen-only mode. [Operator Instructions]. I would now like to hand the conference over to Mr. Nathan Judge. Please go ahead.

Yes. Thank you, Jason. And good morning, everyone. And thank you for joining us. Last night, the company issued a press release announcing results for fiscal year 2022 as well as the fourth quarter of fiscal year 2022 ended March 31, 2022. 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. Our new CFO, Kedar Upadhye; Vaishali Nigam Sinha, our Chief Sustainability Officer and Kailash Vaswani, President of Finance. Sumant will start the call by going through the overview of the company and recent key highlights. Kedar then will go through results followed by an update on ESG from Vaishali. And then we will wrap up the call with Sumant providing guidance for our fiscal year 2023. 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 materials and measures that we reconciled to the most comparable IFRS measures. And these reconciliations are also available on our website in the press release, presentation materials and annual report. It is now my pleasure to hand it over to Sumant.

Yes, thank you, Nathan. And good morning, good afternoon or good evening to everybody depending on where you are in the world. Let me start off by saying that ReNew have been publicly listed on the NASDAQ for almost 10 months now and our opportunity for growth, improving returns, lowering our cost of capital and the strength of our company has noticeably improved over that time period. We do continue to believe that ReNew is one of the most compelling investment opportunities in the renewable energy sector today. And we would like to recap the investment proposition on page five. ReNew’s operations are in one of the most exciting renewable energy markets globally. India's electricity demand is expected to double by 2030 underpinned by strong economic growth, but also improved access to electricity for the rural population. This demand growth will be met by renewable energy as it is the cheapest source of new capacity available in India today. And very importantly, it doesn't pollute India's currently small field air. The Indian government views renewables as a key to reaching energy independence and releasing the $150 billion annual bill for imported oil. The robust levels of consistent sunlight and wind resource can transform India from being a net energy importer, to a supplier of green hydrogen globally. The current government targets are for 500 gigawatts of renewable energy to be installed by 2030 from an operating base of a little more than 100 gigawatts currently. To meet this goal, renewable energy developers of which ReNew is the largest, we need to increase our annual installations by a factor of four times from the expected, from the current levels in a very short period of time. Even if this enormous capacity add is accomplished, the expected increase in electricity demand in…

Thank you, Sumant. Good morning, good afternoon, and good evening to everybody on the call. And thank you for joining us today. Looking at page 13, which provides highlights of fiscal year 2022 and the fourth quarter of 2022. We have 7.6 gigawatts operating as of today, which with the 528 megawatt acquisition that is in the final stages of closing, would bring us to 8.1 gigawatts which is an addition of 2.5 gigawatts since the end of the last fiscal year. This addition was particularly commendable, given the challenges of COVID and supply chain disruptions which we faced. Our fiscal year ‘22 revenues are labeled total income under IFRS rose 27% year-on-year, while our adjusted EBITDA increased more than 32%. And cash flow to equity jumped almost 93%. Turning to page 14 which provides a reconciliation of adjusted EBITDA excluding the impact of weather to our reported results. Adjusted EBITDA excluding the impact of weather, FOREX and the loss of EBITDA from the sale of rooftop business was in line with our guidance after considering the INR depreciation over the year. Weather improved from last year, although it remained below normal levels and had about a $75 million negative impact in this fiscal year. For the current quarter, first quarter of FY23, wind so far has been close to normal. Turning to accounts receivable page 15, when you look into what constitutes our past due accounts receivables. Four state discount account for the vast majority of the overdue. We believe we can improve our payment cycle with these states. As a bit of history many of these contracts with the states were entered before the central government created the Solar Energy Corporation of India or SECI. At the time, we anticipated payment delays and had built in expectations into…

Thank you, Kedar. And a big thank you to all of you who joined us on this call today. I want to start by saying that at ReNew, our mission is to address climate change through impactful scalable and market driven solutions for creating a sustainable and equitable future. At ReNew, our ESG approach is based on four C's. One, to create a carbon free world; two, our commitment towards sustainability; three, collaboration; four, corporate citizenship. On slide 19, we've thrown some light on the work, we're doing each of these Cs. So for creating a carbon free world, ReNew has avoided about over 10 million tons of carbon dioxide equivalent in fiscal year ‘21, which is 200 times our scope 1 and 2 emission. This translates just to give a perspective to avoiding 0.5% of India's carbon emissions and 1.1% of emissions from the power sector while contributing to 1.5% of India's power capacity. This data has been validated by DNV. ReNew in its upcoming sustainability report, which will be out on September ’22, we'll be disclosing our scope 3 emissions, and we will also align with the TCFD disclosures. In line with our commitment to carbon neutrality of our operations, we are committed to creating a carbon sink. This World Environment Day, we committed to planting 100,000 trees by 2025. And this will be done across 70 sites pan India. Additionally, we are also on the World Economic Forum's Advisory Council for the 1 trillion tree initiative. The goal of this program is to conserve, restore and grow a trillion trees by 2030 across the world. ReNew power is committed to leading this initiative in India. Number two was commitment towards sustainability. From our board to our site, ReNew is deeply committed to sustainability. Here are some of…

Yes, thank you so much for that, Vaishali. I'm very happy to report that despite the uncertainty around supply, and COVID issues in 2020 and FY2022, not only were we able to continue to deliver on all of our ESG and sustainability programs, but we were also able to deliver on our guidance for adjusted EBITDA, excluding the impact of weather and foreign exchange movements. Turning to slide 23, we are making some changes to our guidance to be in Indian rupees and also providing guidance on a per share basis. We have been actively buying back stock when we believe it will provide the highest return opportunity. So far, we have repurchased about 4 million shares, since we implemented the buyback, which leaves us with well over $200 million of authorization remaining under that program. Our FY23 EBITDA guidance is for about 20% EBITDA growth above FY22, which translates into between INR 66 billion and INR 69 billion, or INR 155 to INR 160 rupees per share. Our cash flow to equity guidance is INR 21 billion to INR 22.7 billion altogether, or INR 49 on a per share basis, INR 49 to INR 53 per share. On an absolute basis converted to US dollars at the current exchange rate. Our FY23 EBITDA would be in the range of roughly INR 880 to INR 920 million, and our cash flow to equity would be approximately INR 280 to INR 300 million. Our guidance includes an assumption that the weather impact will be about $40 million to $60 million, about half of the impact that we saw this year i.e. FY22 after adjusting for about 20% growth in megawatts. We still expect weather will be normal in future years, but thought it would be prudent to take into account some…

[Operator Instructions] Our first question comes from Justin Clare from ROTH Capital Partners.

Hi, thanks for taking our questions. So first off, you mentioned that you're expecting I think I heard a $40 million to $60 million weather impact for fiscal ‘23. At least that's what you factored into the guidance here. I was wondering is that expected to impact only the wind assets and then the solar assets are expected to perform in line with historical averages? And then along this same line, could you give us a sense for how you expect the PLF to trend in fiscal ‘23 relative to ‘22 for both your solar and wind asset?

Yes, sure. Let me take that. Yes. So look, I think as you know, Justin, the variability of solar assets is a lot lower because of radiation changes, as compared to wind, where the variability does tend to be higher. The number that we've assumed is essentially a number for both wind and solar together, we have not actually differentiated. And to your question of what is the PLF that we expect to get this year, we obviously expect to get normal PLF. But we have just been prudent in assuming a certain impact of weather, which we have assumed as being half of the impact of last year. Frankly speaking, there is no real specific sign to this, as you know, ultimately, we'll have to see how the weather plays out. But just given the long-term pattern where, as you know, two years ago was very bad. Last year was already getting back to closer to normal, but was not fully there. We just assumed that we have a similar improvement this year, without a full reversion back to the [Indiscernible]. So that's the assumption that we made. Ultimately, we'll have to wait and see how the year plays out for us to be able to get a good sense of the performance actually.

Okay, great. That's helpful. And then also on the guide, just wondering, how much of your guidance are you expected to be delivered from the portfolio commissioned as of the end of fiscal ‘22, versus how much is dependent on new assets. So I know, you've also acquired 528 megawatts recently here, and you're expecting the cash flows starting, I believe it was April 1 of this year. So just wondering if that -- if the cash flow and EBITDA from those -- from that acquisition is fully factored into the guide, as well.

Yes, finance, would you? Kedar, would you like to answer that? Kedar or Kailash.

Yes, so the guidance factors the benefit of the acquisition, however, it's subject to closing. So it will come at a period, which is not at the beginning of the year, in the middle part of the year. So I think that's answered your second question. And could you repeat your first question, please?

Yes, just wondering if the guidance is dependent on additional acquisitions or commissioning of projects throughout the year? Or is it really the portfolio starting the year? Will that support your expectations for the year?

Yes, the reliance on the new additions for the current year revenues and EBITDA is quite lower. So I think the sensitivity is far higher to the portfolio that we're carrying from the beginning of the year. If that helps you, we're not quantifying the exact amount. However, the current year revenues and EBITDA are largely shaped by the opening portfolio.

Got it, okay. And then just shifting gears for your manufacturing plan, just wondering how you're thinking about the amount of cell capacity relative to your module capacity, it looks like cell at this point is about 1/3 of module capacity. But looking forward, what is the optimal ratio that you're thinking about there? And then also, just on manufacturing, how much of your supply over the next say, one to two years you anticipate to produce in-house versus how much do you think you need to still potentially procure modules from external sources? And then actually, one other piece on this is just where do you anticipate procuring cells for a given that your module capacity is higher than cell?

Yes, so let me take that, Justin, as far as our cell capacity is concerned, right now, as you know, we are still doing two gigawatts that will be ready sometime towards the second quarter of next calendar year. And we are just going a little bit slower on cell capacity, but our eventual goal will be to have a balanced cell and module capacity. Because eventually, as you know, India does impose a 25% customs duty on cell imports as well. And our sense is that the cost of production of cells in India will end up being cheaper than imports plus 25%. So eventually, we would like to have a balance capacity of cell and module. We are going a little bit slower on cells rollout because it's a little bit more complex than putting up a module plant is. And so what we wanted to do was to essentially make more headway on the first two gigawatts, get that -- get absolute comfort that everything was under control, and then essentially expand capacity after that, but you should look to, you should assume that over time, we will look to balance out the cell and module capacity as well. Now to your second question of where, how much capacity we will be procuring ourselves from our own supply and how much from outside, look, of our total outstanding solar projects that we have that we are constructing right now, some of those capacities are grandfathered. So those capacities, we can import the modules for and essentially, get us -- get a refund on the customs duty. So some part of our total capacity, we will therefore be doing that. And the bulk of the remaining capacity, we essentially intend to cell supply. And so really, most of that will come from the internal sources. There may be a few 100 megawatts of balancing requirements here and there. But fundamentally, most of the balance will be cell supplied. To your third question of where we will import the cells from? The cells will be imported from the regular cell manufacturing companies, mostly out of China, same companies like LONGi, and Jinko, and GE, et cetera, who we buy, currently our modules from, so we will essentially just buy cells from them instead of modules, so I think that’s basic thinking about it.

The next question comes from Julian Dumoulin-Smith from Bank of America.

Good evening. This is actually Kody Clark offer Julian. Thanks for taking my questions. So just first on, just inflation. And numbers came in at 30 year highs kind of increasing the likelihood for rate hikes, cognizant that rates have remained in the 8% to 8.5% range for now. But looking into the future, how are you thinking about higher cost? And also, if you could just remind us on the sensitivity for return there?

Yes, sure. Kedar, do you want to take the question?

Yes. So Julian, as far as rates are concerned to account for the increasing interest rate, at least as far as the new projects that we bid for, we will obviously factor in higher rates. Even when we were bidding previously, we were not factoring in the very low rates that we were getting before the rate hike cycle began. So all the rates that we were factoring was taking into account some increase in interest rates that would happen in any case. So largely, the projects that we have, which are under construction in the pipeline, those are quite insulated from the interest rate that leads up to another, I will call it another 150 - 200 basis points from here on. And we did become very active in the past when rates were lower. So we did a lot of refinancing activities prior to March 31. And did a lot of fixing of our interest rates in the portfolio. So that way most of the portfolio is fixed, whatever is floating will have a very small impact as far as cash flow to equity is concerned hardly around 2%. And whatever is in the pipeline, there is some buffer which exists. And for new bids, we will factor in the increase in interest rates into our bids. And on that basis, we will bake into our costs to higher rates that may prevail going forward. To your second question as far as sensitivity is concerned. So again, we don't expect the interest rate increases to remain for a long period of time. So two year increase or higher interest rates by 100 basis points allow hardly like a 0.2% equity IRR impact.

Understood, okay, that's helpful. And then thanks for the incremental disclosure around the corporate PPA opportunity set. But just wondering if you can just give a little bit more color on how you plan to capitalize on that potential opportunity. And also, what has been the conversion rate for customers. So i.e. historically what percentage of the capacity that is under discussion ultimately leads to sign PPAs if we're thinking about that 1.3 gigawatts system that you mentioned.

Yes, sure. So sorry, what is your first question? Around color on corporate and secular fund.

Yes. Just so your plan on capitalizing that. You mentioned not too much competition.

Yes.

But I was referring where they are, yes.

Yes, so, look, the corporate PPA market has much less competition than the regular bidding market. And the reason for that is that the actual -- the amount of customization or the conversation that you need to have with corporate customers is quite lengthy. And if you haven't been engaging with corporates for a while, then you can't just sort of barge in and do something. Because the requirements are different. A lot of the corporates have requirements and specific states, they may have specific requirements of water profile of the power that they want needs should be, some of them are connected to the interstate transmission network. And so therefore, the solution for them might be different. So each corp, each customer requires, in some ways, a bespoke solution. And that requires the ability of having development pipelines in a number of different states. And that development pipeline you can only have if you have a sense of what customers really want. And so it's a bit of a chicken and egg, and you have to keep working at both ends quite, over quite a long period of time to be able to get conversions going. And so that's really what we've been doing. And if you recall, I've been talking about corporate PPAs, for the last almost ever since we’ve got listed. So at least a year. But certainly this is a market that we've been working on for quite some time, and developing projects to service this market. And therefore we do have a pretty significant edge in addressing the market as we go forward. Just to let you know, the Indian government came out recently with rules that basically makes open access, green open access for corporate customers a lot easier. Earlier, every state had its…

Absolutely, understood. And just lastly, for me, curious how you're viewing the timeline for new utility scale auctions, what steps should we be looking at for from SECI? And especially in the current power backdrop, as you highlighted?

Yes, so I think there are a lot of conversations going on between SECI and the states. SECI after their previous experience of taking longer to sell the power is just making 100% sure that the Discoms are lined up. And that's why they are taking a little bit of extra time on finally coming out with the bids. But they've already announced a fairly large amount of projects that are coming up for bid. And that's the number we talked about that 21 gigawatts has already been sort of put into the pipeline. And over the next few months, we'll start seeing all those bids coming in for first on and second on submissions very soon. And a larger proportion of those bids now really is around the clock intelligent energy solutions, because most of the states are really moving in the direction of wanting that kind of thermal power, as are the Indian railways, which as I mentioned also is the single largest customer for power in the country currently for almost 5% of total power consumption in India. So all of those are the entire sort of Indian railways demand and a number of states now moving in the direction of RTC power. So in the 21 gigawatts, therefore, you will see a lot more of the round the clock power type auctions.

The next question comes from Nikhil Nigania from Alliance Bernstein.

Hi, thanks for taking my question. My question relates to sale of power on the power exchanges in the short term market. So I could see the new selling some power in the short term market as well. So, a, wanted to get a sense of what percentage of Q4 revenues broadly came from that area? And b, are there any plans to set up a merchant based plant or some open capacity to leverage time similar to the current one where exchange prices are really high to get an upside on the investments?

Yes. Nikhil, I’ll let my finance team answer the first question, but the second question, I'll quickly answer first. So essentially, right now, you're absolutely right, power prices have gone up dramatically, given the shortage of power. And our sense is that going forward, this shortage is going to continue, simply because power demand is growing quite substantially at 6% to 7% a year. And there is very little new capacity being added beyond renewable energy capacity. And renewable energy capacity is also going at a certain pace, which is not going to be sufficient to meet the demand growth. In addition to that, the alternative supply of power, which is very coal based power, we've of course, seen coal prices go up very substantially, and are likely to stay elevated for a considerable period of time, given what's happening to power prices globally. So I would think that prices in the merchant market are likely to stay fairly robust, for some considerable period of time. And therefore, we have been contemplating looking at increasing the exposure that we have to that segment of the market. Now some exposure we get naturally, because we commissioned certain projects before the PPA supply dates start. So therefore, those megawatts we were able to sell into the merchant market, there is some overflow power, as you know, from our RTC project that we will be selling into the merchant market. But we're also looking at setting up now one or two dedicated projects to sell into that market. And see how that goes. So I think we'll, of course, keep the overall exposure limited to perhaps less than 10% to ensure that we don't over expose ourselves, but we'll see how that market goes. And over time, we will potentially, then take a decision based on our experience and so on. On the first part, finance team, do you guys have an exact answer or general answer?

Yes, I have the numbers, in terms of quarter four.

Yes, go ahead. Sorry, go ahead, Kedar.

Yes, no, I was just saying the quarter four total income is about $232 million, or INR 1,762 crores and the contribution is still in single digits. So we can get you an exact number, Nikhil, but the contribution is in low to mid-single digits.

Jason, we'll go ahead. I say there's one more question on the line. Go ahead and take our next question.

Yes, I'm sorry. My line was muted. The next question comes from Amit Bindra from Morgan Stanley. Please go ahead.

Hello. I just wanted to understand your funding plan for the CapEx plan that you have laid out for our FY23. $194 billion of CapEx, $82 billion cash at hand and excluding EBITDA. So how much receiving liquidation or debt I think do we expect in the next year and the use of cash towards other activities like any buyback plans, continuing on the buyback plans et cetera.

Yes, hi, this Kailash. So, as far as you know, the total debt required for the near term CapEx is somewhere around $1.3 billion in the next 12-month period of time largely for the RTC project and the peak power project, which will see a lot of construction activity in the current fiscal year. And we have already tied have debt for both of these projects. Again, for the RTC project we're borrowing dollar loans and for the peak power project, we will be borrowing from one of the domestic NBFCs.

The conference has now concluded. Thank you for participating. You may now disconnect.