ReNew Energy Global Plc — financial distress indicators
Financial-health summary
ReNew Energy Global Plc's reported numbers place it in the 'Watch' financial-health band (distress score 35/100). The main indicators are market-implied default probability >20%, thin interest coverage and very high leverage. Independently, the Ohlson accounting model puts its 1-year failure probability at 26% and the market-implied (Merton) default probability is 76.2%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Merton distance-to-default -0.71 σ → PD 76%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Interest coverage is only 1.07× (lenders typically require ≥ 2–3×).
Low coverage leaves little buffer against a profit dip before a debt-service or covenant breach.
Total debt is 7.9× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+36% YoY).
📰 Recent news scan
- Is ReNew Energy Global (NasdaqGS:RNW) Below Fair Value On Earnings?Yahoo Finance · 2026-09-22
- ReNew Energy (RNW) Q1 Earnings: Expanding Portfolio Meets a Pending Buyout OfferYahoo Finance · 2026-08-27
- ReNew Energy Global PLC (RNW) (Q1 2027) Earnings Call Highlights: Strong Growth and Strategic ...Yahoo Finance · 2026-08-18
- ReNew Energy Global Q1 Earnings Call HighlightsYahoo Finance · 2026-08-18
- ReNew Energy Global Plc Q1 2027 Earnings Call SummaryYahoo Finance · 2026-08-18
- ReNew Announces Results for the First Quarter for Fiscal Year 2027 (Q1 FY27), Ended June 30, 2026Yahoo Finance · 2026-08-18
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do ReNew Energy Global Plc's financial-health indicators show?
As of 2026-10-08, ReNew Energy Global Plc's public financial data places it in the 'Watch' band with a distress score of 35/100, driven by market-implied default probability >20%, thin interest coverage and very high leverage. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is ReNew Energy Global Plc's financial distress score?
35/100 ('Watch'). Ohlson O-score -1.02 (model 1-year failure probability 26%). Merton distance-to-default -0.71 σ (model default probability 76.2%).
What works in ReNew Energy Global Plc's favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+36% YoY).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Utilities & Power companies with distress indicators
- BRNX (BRNX)Very weak 100/100
- Stem, Inc. (STEM)Very weak 81/100
- NextNRG, Inc. (NXXT)Very weak 74/100
- Energy Vault Holdings, Inc. (NRGV)Very weak 72/100
- PowerBank Corporation (PBK)Weak 68/100
- Abundia Global Impact Group Inc (AGIG)Weak 60/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.