SBICap Ventures’ Neev Fund to invest $5 million in renewable energy firm Prespl
SBICap Ventures’ Neev Fund is set to infuse about $5 million in renewable energy firm Punjab Renewable Energy Systems (Prespl) to acquire a significant minority stake in what would be the Series-B funding round.
Prespl has also commitments of an additional $3-5 million funding in the same Series-B round from a different investor.
Prespl, which was incorporated in 2011 to exclusively cater to the biomass fuel needs of Punjab Biomass Power, has expanded its operations into different verticals over the past few years
The company aggregates, processes, stores and supplies biomass (agri-residues) such as paddy straw, cotton stalk, soya husk, maize cob, mustard stalk, etc, to biomass-based power plants and process industries. It also processes agri-residues into biomass briquettes — compressed blocks of biomass which is compatible with transportation over long distances — and supplies to process industries such as breweries and beverage plants.
Monish Ahuja, managing director and chief executive at Prespl, said the company was expecting a significant boost in its revenues in coming times as it expected signing a number of contracts with many oil marketing companies.
“Hindustan Petroleum Corp Ltd (HPCL) is coming up with a plant in Punjab while Bharat Petroleum Corporation Ltd (BPCL) with a plant in Orissa. We are the company that has qualified in the global tenders for the supply of raw materials and expect the contracts to be signed in March. Besides these, there are many other contracts that we are following and believe ourselves to be the front-runner,” Ahuja said.
Prespl has also transitioned into a steam energy supply company where it provides uninterrupted steam to process industries at pre-decided rates throughout the year.
The firm is also investing in establishing boilers at clients’ side and is currently executing two such projects with two major pharmaceutical companies. For the fiscal year 2019, Prespl is expecting to record revenues of Rs 35-36 crore. In FY18, the company had revenues of Rs 13.5 crore while in FY17 was Rs 6.5 crore. “We have an operating margin of 12%. This year, we have turned PAT (profit after tax)-positive,” said Ahuja.
The firm had earlier raised $2 million in September 2013 as part of its Series-A funding from responsAbility, a Zurich-based fund. Currently, Prespl has six board seats of which two are occupied by the promoter side, two are independent directors, one belongs to the Neev fund and one is occupied by responsibility.
Gagandeep Bakshi, head of Intellecap investment banking that was involved in the deal, said the biomass space holds a large potential. “If you simply looking at the biomass demand that is going to be created over the next five years, it is definitely possible that many large corporates will come into the picture and you are likely to see consolidation in the space.”