'Right time, right place, right business and I could see I was the right person. It was a now or never moment in a sense. If I didn’t do it then, then when? There is little point in entering a business as an entrepreneur when someone else has proven the concept.'
BJP leader Yashwant Sinha's son started ReNew Power during the UPA II government to focus on clean energy.
Big business in India suffers from a perception problem. Few believe that you can achieve success and create huge wealth in India if you do things the ethical and correct way.
Sumant Sinha, son of former finance minister Yashwant Sinha, is out to prove the contrary.
As he goes about trying to build the largest renewable energy company in the country -- ReNew Power -- what drives him most is his desire to prove he can do it cleanly.
But clean energy is not his only goal. He’s aiming to be the biggest solar power generator in India.
When Sinha started his company, the UPA II government was focused on clean energy. But the NDA-led government has set unimaginable targets for renewable energy. And Sinha’s plunge into renewable power has moved into a much higher trajectory than he’d imagined.
The commissioned assets of the company in the past six years are 1,400 MW (wind 1,050 MW and solar 350 MW). Sinha says he’d like to keep his market share in solar energy at 8-10 per cent.
A powerful magnet
After a career spanning industries and continents for 11 years, in April 2002, Sinha came back to India and joined Kumar Mangalam Birla as his chief financial officer in Mumbai, and worked with the Birlas for close to six years. His spearheading the group’s retail business was his first experience of running a business hands on.
In 2008 he was approached by Suzlon to join as CFO. He did, and a month after he joined, the 2008 financial crisis struck, destroying Suzlon’s business model.
“I found myself moving from the frying pan to the fire,” says Sinha, who after a very intense work life at the Birla group had hoped for a slightly easier assignment.
He had no time to breathe for 15 months. Tulsi Tanti decided to come back full on and Sinha decided it was time for him to call it a day.
Sinha noticed there was a change in the renewable energy sector, which had been primarily wind-driven till then, thanks to tax breaks given by government.
“Jewellers, film actors and all manner of entities had entered the wind turbine space ... But the government had introduced a policy to attract IPPs in the Indian space too and more serious players were entering this sector.”
Politics is no less certain
When he quit Suzlon, Sinha found himself at the crossroads. He had achieved financial stability and could consider entering politics, like his father had done in the 1980s and his brother was considering the same thing at around the same juncture.
But he could also see the huge opportunity in the energy sector. With things easing up after the financial crisis, he also noticed that a lot of private equity capital was available.
“Right time, right place, right business and I could see I was the right person. It was a now or never moment in a sense. If I didn’t do it then, then when? There is little point in entering a business as an entrepreneur when someone else has proven the concept,” says he.
He also felt he could perhaps make a bigger contribution to the country by getting into the clean energy space than by being in politics.
A ‘ReNewed’ birth
In 2010-11, he invested his own money and started building a pipeline of projects before he raised funds. Goldman Sachs was looking at the renewable energy sector in India after it had successfully funded, scaled up and exited a wind platform in the US a few years earlier. They committed $200 million to Sinha’s business during June-September 2011.
“If Goldman at the time had invested in someone else or come back and said no, maybe I would have been in politics!” says Sinha.
With 640 employees, his company has raised $650 million (including Goldman increasing its own commitment from $200 million to $370 million). $1.7 billion has been raised as debt.
He says new possibilities constantly emerge and the goalposts keep moving -- when his firm had 500 MW, 1,000 MW looked impossible. Now he is looking at three times that.
He’s also looking at which countries he could expand into and perhaps other clean businesses. “Let me say I feel much more in control.
Images: Courtesy, ReNew Power.