Hero Future Energies Garners Huge Response for Its First Dollar Green Bond Offering

The renewable energy venture of the Hero Group, Hero Future Energies (HFE), issued their first USD bond in global markets. The green bond was issued through Clean Renewable Power (Mauritius), a wholly-owned subsidiary of Hero Future Energies Asia.

HFE’s green bond received over $3 billion orders and was successfully priced at a coupon rate of 4.25% for a six-year maturity period. The issuance was oversubscribed more than 8.5 times.

HFE’s first USD green bond comes after its success in 2016 with the issuance of the first-ever climate bond by any Indian renewable company.

Rahul Munjal, chairman, and managing director, Hero Future Energies, said, “HFE’s first USD bond offering has created a landmark by achieving the highest levels of oversubscription for any transaction out of India this year in the USD bond market. This is a very encouraging move by global investors, especially in the post-pandemic phase, and demonstrates the importance of ESG among the investor community.”

He further added that the bond offering has opened up the global debt capital markets for HFE, thereby diversifying its existing sources of capital and positioning HFE as a robust player in the global cleantech space.

Ben Fraser, Chief Financial Officer, Hero Future Energies, said, “The market response to HFE’s first USD bond is a testament to the company’s excellent credit story. Our debut green bond offering witnessed participation from an impressive list of key global blue-chip investors. The bond was launched to the market at initial price guidance of 4.75%.”

Fraser added that given the strong demand from global accounts, price guidance was tightened by 50 bps, “Even with the largest tightening from any Indian credit this year, most investors continued to remain in our books, resulting in a final order book of over USD 3 bn, with the allocation of 58% to Asian investors, 15% to EMEA and 27% to investors in the US.”

Established in 2012, HFE is a renewable energy provider focussed on ‘Planet Positive Power.’ HFE currently has a portfolio of 1.6 GW in India and aims to expand its operations in overseas markets to hit an overall capacity of 5 GW by 2024. HFE operates primarily in the wind, grid-connected solar, rooftop sector, and energy storage.

In November 2019, the United Arab Emirates-based Masdar had invested around $150 million (~₹10.7 billion) in HFE. Clean Solar Power, a step-down subsidiary of HFE, also received a debt financing of up to $43.3 million from International Financial Corporation, the financial arm of the World Bank.

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