Inox Clean’s second attempt at a first impression

The Daily Brief

The episode examines Inox Clean Energy's massive ₹10,000 crore IPO filing and its strategic expansion into solar manufacturing and renewable

Key takeaways

• Inox Clean Energy's renewable capacity grew 22-fold from 107 MW in March 2025 to 2,375 MW by August 2026.
• The Inox GFL Group leverages an integrated model with companies like Inox Wind and Inox Green for turbines and maintenance.

Main topics

• Inox Clean Energy IPO
• Solar manufacturing and supply chains

Notable quotes

Borrow to grow, and then raise equity to reduce the debt.

Conclusion

The episode offers a comprehensive look at how large-scale capital rai

Transcript preview

Speaker 1 (0:04) In today's episode, we'll do one deep dive and cover another story for the day. First, we'll talk about InoxClean's second attempt at a first impression. And then we'll talk about why sanctioned tankers are taking Russia's flag. Welcome back to The Daily Brief by Zerodha, where we cut through the noise to help you understand what's actually happening in the most important stories from business and markets. I'm your host Akshara and today is Tuesday, 1st October. Coming to the first story. So we keep returning to a few themes in the daily brief. AI, data centers, electrification, and the infrastructure supporting them. Most lead us back to electricity, producing more of it, making it cleaner, and delivering it when needed. For businesses, this creates several opportunities. They can generate electricity, manufacture the equipment, build the projects or maintain them. For investors, an expanding list of companies offers exposure to different parts of that spending. The latest IPO hopeful is Inox Clean Energy, which has filed draft papers for a Rs 10,000 crore offering. And this is its second attempt. It first filed confidentially in July 2025, then withdrew that December after reportedly raising around Rs. 5,000 crore privately with plans to update its filing. And the business has changed considerably. It returns with a much larger business. So operating renewable capacity grew roughly 22-fold from 107 MW in March 2025 to 2,375 MW in August 2026, largely through acquisitions. It also entered solar manufacturing in India and the US. Now, Inox Clean belongs to the wider Inox GFL Group. This is a different company from Inox Wind and the recently listed Inox Green. And its business has two main parts. The first is independent power production or IPP. It owns solar and wind plants and sells electricity with batteries providing storage. In India, this operates through Inox Neo Energies, supplying utilities and commercial and industrial customers. Renew, Cleanmax and Acme Solar are useful comparisons. The second is solar manufacturing. Through Inox Solar and its American operations, it manufactures the solar modules that solar projects use. VariEnergies and PremierEnergies are a more relevant comparison here, and modules are sold to outside customers or supplied to Inox's own generation projects. Now, the wider Inox group can also help put those projects together. INOX Wind manufactures the wind turbines. INOX Renewable Solutions handles land aggregation, engineering, procurement and construction of turning equipment into functioning power plants. INOX Green provides ongoing operations and maintenance to keep renewable assets running. And the group also supplies a customer. Gujarat's fluorochemicals, which is its chemicals business, accounted for about one-third of INOX Clean's electricity revenue in FY26 before several recent acquisitions expanded the portfolio. And the logic is straightforward. A developer needs equipment, construction, maintenance, and customers. Having established relationships within the group can make coordinating those things easier. But how much economic value each company captures depends on the prices they charge one another. A higher turbine price leaves more with Inox Wind and less with Inox Clean. A lower electricity tariff benefits Gujarat's fluorochemicals but reduces Inox Clean's earnings. Now, these transactions are not inherently good or bad. But each company has its own shareholders, which is why related party transactions matter and creating value for the group does not necessarily mean sharing it fairly across its companies. Now, with that distinction made, we should ask two questions about each business. Can this industry earn durable profits? And what gives Inox the ability to capture them? So the appeal of renewable power generation is reasonably straightforward. spend money upfront on land, equipment and construction, sign a power purchase agreement or PPA with a customer, generate electricity and collect payments over many years. Solar and wind projects also avoid the recurring fuel purchases that coal or gas plants require. Now, as decarbonization gathers pace, renewables stand to meet a growing share of additional electricity demand and even replace some of the fossil fuel generation serving existing demand. And Dinox's portfolio shows that long-term character. As of August 2026, its customer contracts had a weighted average remaining life of about 19 years at a weighted average contracted tariff of Rs 4.05 per unit. But a long contract does not guarantee an attractive return. Developers, when competing for these tenders, compete on price. So if everyone expects cheaper panels, better turbines and easier financing, those expected savings can get passed to the electricity buyer through lower tariffs. A growing market can therefore produce plenty of new projects without leaving developers unusually profitable. The economics depend on what happens between the bid and the final cash collection. Can the developer secure land and grid access, build within budget, borrow cheaply, and generate as much electricity as expected? A fixed tariff offers revenue visibility, but leaves less room to recover unexpected costs. Now, who buys the electricity also matters. Utility tenders offer large projects and long-term contracts that can help developers secure financing. But developers compete aggressively on tariffs, leaving less room for error. And payment security also varies. Selling through a central intermediary such as SECI is different from selling directly to a financially stretched state discount. Now, commercial and industrial customers offer another route. A factory buying renewable power compares its total delivered cost with its existing electricity bill. And that can leave room for the developer to charge a higher tariff while still saving the customer money. And a credit-worthy corporate buyer can also offer dependable payments. But a higher tariff doesn't automatically mean a higher return. Delivering power through the grid involves charges and regulatory conditions that affect those savings. And corporate contracts may also allow early exits or