The merger of ReNew Energy with RMG Acquisition will consequence in the susceptible’s itemizing on Nasdaq and substandard cash proceeds of around $1.2 billion.
Renewable energy producer ReNew Energy on Wednesday introduced an agreement to merge with RMG Acquisition Corp II, a blank-cheque company or a uncommon purpose acquisition company (SPAC). The merger of ReNew Energy with RMG Acquisition will consequence in the susceptible’s itemizing on Nasdaq and substandard cash proceeds of around $1.2 billion.
The deal is the foremost keen an Indian company throughout the most modern reveal in SPAC deals that believe continued in 2021 after witnessing a document twelve months in 2020. Apart from to to ReNew Energy, on-line grocery platform Grofers is moreover reportedly in evolved phases of exploring a SPAC deal.
A SPAC, or a blank-cheque company, is an entity specifically space up with the target of procuring a company in a particular sector. The honest of this SPAC is to win money in an preliminary public offering (IPO), and at the moment restrict, it does now not believe any operations or revenues. Once the money is raised from the public, it is kept in an escrow memoir, which is also accessed whereas making the acquisition. If the acquisition is rarely any longer made within two years of the IPO, the SPAC is delisted and the money is returned to the traders.
What makes SPACs stunning to traders, regardless of them basically being shell companies, are the of us sponsoring the blank-cheque company. As an illustration, in case of ReNew Energy, the SPAC RMG Acquisition Corp II — which raised $345 million in an IPO remaining December — has moreover been backed by marquee traders neutral like BlackRock, BNP Paribas, Chamath Palihapitiya, and others. These traders participated through a non-public placement, in which the remaining $855 million turned into raised.
Globally, eminent names neutral like susceptible NBA player Shaquille O’Neal, susceptible TikTok CEO Kevin Mayer, Michael Dell, Vinod Khosla, Arianna Huffington, etc. believe participated in SPACs. In India, on-line shuttle company Yatra.com and Videocon D2H believe listed in a single more nation through SPAC deals in 2016 and 2014, respectively.
On the other hand, a fresh push to SPACs has reach since remaining twelve months. In accordance with recordsdata sourced from SPAC Insider, a portal that maintains a document of SPAC deals, of the 645 such IPOs by blank-cheque companies since 2009, 248 came about in 2020 and 171 in 2021 so a ways. The substandard proceeds raised by SPACs in 2020 amounted to over $83 billion.
“It's a ways a fresh technique of thinking of structure and exit versus an expensive IPO. The money is already raised by somebody who specialises in that condo, and is now picking these property and constructing on them,” Sunil K Goyal, MD, YourNest Mission Capital, talked about.
