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“In the loan book of REC, PFC, renewables are largely driving the growth. Renewables by nature are much less riskier to invest in or to lend to than a thermal plant or a hydro plant or a biomass based plant and, hence the risk of NPAs to these entities are much lesser. Book value of PFC, REC is between 1.3 and 1.5 times vs IREDA which is almost two times book value.”

“On an EV/EBITDA basis, a lot of the renewable standalone assets are sold at 8-9x EV/EBITDA in India. But if you look at a platform, which is existing assets plus the growth opportunity, the multiples could be higher. We have seen transactions happen as high as 14x EV/EBITDA in the sector in the space.”

2021 is the year for recovery and in India, says Director - Asia Quant Strategist, AB Bernstein.