Oct. 16 at 10:34 PM
$RNW $RNWWW If the buyout offer comes to a vote, everyone should vote no.
Renewable energy is capital-intensive with a long-horizon industry where assets appreciate as they mature and debt amortizes. Governments are increasing support for renewables, especially in India.
If the company is poised to deliver significant growth beyond the next few years, then taking it private at a temporary market discount arguably denies existing shareholders the fair value of future cash flows.
This deal is highly questionable. Since the CEO, Sumant Sinha, is part of the buying consortium, this is essentially a management-led buyout at a discount. Management has access to forward financials, project pipelines, and future deal flow. Public investors don’t.
If insiders believe the stock is deeply undervalued and buy it out before that information is fully reflected in the price, they capture future upside at the expense of current shareholders.
They know this is gonna be 10x in a few years.
