The company, a fully integrated wind energy player, has an order book of 2.9 GW. The stock market has welcomed the turnaround story with open arms. The Noida-based company’s share price has risen more than 11 times from its low of Rs 19 in December 2018 to Rs 212 on August 16, 2024.
Over the past year, it has risen 331% against the Sensex’s 22% gain, taking its market capitalization to nearly Rs 28,000 crore.
Following a capital injection from promoters, the company has achieved zero net debt and has an A/Stable rating from Crisil on its long-term bank facility.
“In the future, the numbers we want to achieve will be a multiplier of those numbers,” Jain, 37, said in an interview. Jain holds a double degree in economics and business administration from Carnegie Mellon University in Pittsburgh and was one of the winners of the ET 40 under Forty award in 2016 for leading the Inox group’s foray into the renewable energy business. That business is booming, spurred by India’s ambition to build 500 GW of renewable energy capacity by 2030.
Inox Wind is part of the $9 billion InoxGFL Group, a century-old company founded in the 1920s by Siddhomal Jain as a paper and newsprint trading company.
Later, his son Devendra Kumar Jain, Devansh Jain’s grandfather, founded Industrial Oxygen (Inox) Co. to manufacture and trade industrial gases. From there, the group expanded into chemicals, multiplexing and renewable energy.
In 2021, the group was split between Devendra Jain’s two sons – Pavan Jain and Vivek Jain. The brothers continue to use the Inox label for their companies but do not have a non-compete agreement.
Pavan, the elder brother, got the industrial gases (Inox Air Products) and the multiplex business (Inox Leisure). Vivek Jain, Devansh’s father, got the chemicals business – Gujarat Fluorochemicals or GFL. It was renamed InoxGFL Group. The group’s entry into the wind segment was his idea. Inox Wind started operations in 2009 and sold its first turbine in 2010.
“We have grown phenomenally. Between 2010 and 2016, we grew this business from zero to practically Rs 5,000 crore,” Jain said. However, a regulatory change in 2017 slowed Inox’s growth. At that time, India’s wind energy sector was moving from feed-in tariffs to competitive bidding. This regulatory change impacted demand. The industry stalled and implementation suffered.
“The sector was practically shut down for six years. During that time, 35 players went bankrupt. But we survived because the promoter family pumped in a lot of money at the time,” said Jain. “So no debt cuts, no restructuring, nothing.”
Overcoming challenges
However, the journey did not go smoothly.
Between 2017 and 2023, Inox saw a significant increase in debt, rising from Rs 600 crore to Rs 3,000 crore. In 2023, one of its creditors sued the company before the National Company Law Appellate Tribunal (NCLAT) for non-payment of debt. However, the NCLAT dismissed the petition on the grounds that insolvency proceedings are not for recovery of contractual debts.
In the last quarter, Inox Wind Energy, the parent company of Inox Wind, invested Rs 900 crore in the company, enabling the company to achieve positive net cash flow and strengthen its balance sheet.
“Inox Wind has been facing turmoil, weak demand and high debt for quite some time, clouding its outlook. However, the sharp turnaround in its balance sheet, coupled with rising demand fuelled by the government’s relentless targets, will lead to a recovery in earnings from FY2025,” said Avishek Datta, research analyst at Anand Rathi Research, in an August 10 report.
The company has also secured a license for a 4-megawatt wind turbine generator (WTG) platform and aims to bring it to commercial market by FY26.
Inox Wind Energy, the holding company of the wind business, is currently being merged with Inox Wind. The company also plans to spin off its EPC (engineering, procurement, construction) arm, Resco Global Wind Services, into a separate listed company, unlocking value for minority shareholders.
The company has engaged consultants to spin off Inox Green’s power evacuation assets to be integrated into Resco, which will result in an automatic stock market listing of Resco.
“We are now net cash positive. The crown jewel is Inox Wind, which will supply all the turbines. Inox Green has a separate arm, the world’s first publicly listed operations and maintenance (O&M) company,” Jain said. “Even if I sell zero gigawatts, I make money because my revenues and profits from O&M are higher than my fixed costs. So I am the last man standing.”
The company is also currently manufacturing its own cranes and is exploring the manufacture of transformers.
With the outlook for the wind industry in the country improving due to policy measures and strong tenders for renewable energy projects (wind share of 10-12 GW in FY2024), Inox Wind sees itself as a 2 GW company shortly, which will give it a revenue of around Rs 14,000 crore. “We have all the building blocks in place. We have capital, a management team, a supply chain, a huge project development pipeline of over 5 gigawatts and the technology secured for the next 10 years,” said Jain, who takes inspiration from Gautam Adani.
With the help of a strong team, Jain wants to focus on broader strategies and innovations and continue to create value for all stakeholders.
