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SWELECT Energy Systems Approves Major Fundraising and Expansion Plans
Team Finance Saathi
18/Dec/2024
What's Covered under the Article:
- SWELECT Energy Systems approves raising up to INR 138.5 crores through NCDs to fund future projects.
- Conversion of loans to preference shares in SWELECT HHV Solar Photovoltaics for INR 40 crores.
- Authorization for setting up four new wholly owned subsidiaries in the solar power generation sector.
SWELECT Energy Systems Limited, a leading player in the renewable energy sector, has announced significant developments following a Board meeting on December 18, 2024. The company has approved a plan to raise funds through the issuance of Secured, Unlisted, Rated, Redeemable, Non-Cumulative, Taxable, Non-Convertible Debentures (NCDs). This move will help the company raise INR 138.5 crores in one or more tranches, marking a major step in its growth strategy.
Raising Funds Through NCDs
SWELECT's decision to raise funds via NCDs aims to bolster its ability to invest in expanding renewable energy projects, particularly in solar power. The company will issue up to 1385 NCDs, each with a face value of INR 10,00,000, aggregating to a total of INR 138.5 crores. These NCDs will be redeemable, with a tenure of 12.5 years, offering an average coupon rate of 9.5% per annum, payable monthly. This funding will primarily support the company's ongoing and future projects in the solar energy sector.
The details of this funding initiative, in accordance with SEBI regulations, include the use of hypothecation/pledge over assets to secure the debenture issue. The company is also committed to a penalty of 1% per annum on overdue amounts in case of any default on payments, ensuring investor confidence.
Loan Conversion to Preference Shares
In another significant decision, the Board approved the conversion of a loan worth INR 40 crores to SWELECT HHV Solar Photovoltaics Private Limited, a wholly-owned subsidiary of SWELECT, into 40,00,000 preference shares. This move will provide better equity structure within the subsidiary, improving its financial stability and capacity to scale its operations in the solar photovoltaics sector.
This conversion is part of SWELECT's long-term strategy to strengthen its subsidiary's position in the renewable energy space, ensuring the growth and sustainability of its business.
Expansion with New Solar Power Subsidiaries
SWELECT is also taking bold steps towards expanding its operations with the establishment of four new wholly-owned subsidiaries in the solar energy sector. These subsidiaries, set to focus on the generation of electricity through solar power, will help SWELECT broaden its footprint in the Indian solar energy market.
The proposed subsidiaries are as follows:
- SWELECT Sunpower Plus Private Limited (or SWELECT MW Private Limited)
- SWELECT Solarkraft Private Limited (or SWELECT Luminis Solar Private Limited)
- SWELECT GP Private Limited (or SWELECT Ecoray Power Private Limited)
- SWELECT SE Private Limited (or SWELECT Radiant Power Private Limited)
Each of these entities will be established with an initial capital of INR 1 lakh and will be focused on solar power generation. This strategic expansion aligns with SWELECT’s vision to contribute significantly to India’s renewable energy goals. The subsidiaries will operate with complete autonomy while remaining under the full ownership of SWELECT Energy Systems.
The company is confident that these moves will not only strengthen its solar power capabilities but will also position SWELECT as a key player in India’s renewable energy future. With the government’s focus on boosting renewable energy generation, these expansions will allow SWELECT to tap into a rapidly growing market.
Looking Forward
With these initiatives, SWELECT Energy Systems is poised for substantial growth in the renewable energy sector. The funds raised through NCDs will fuel the company’s expansion efforts, while the subsidiary setups will help increase its solar power generation capacity. As a company committed to sustainability, SWELECT’s investments in renewable energy projects are a testament to its dedication to building a cleaner, greener future.
This transformation is in line with global energy trends and India's renewable energy targets, offering SWELECT a unique opportunity to make a significant impact. As the company moves forward, it is expected to generate higher returns for its stakeholders while contributing to India's solar energy revolution.
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