Why We're Backing Neufin Energy: A Better Way for Indian Businesses to Buy Energy

Key Takeaways

• India’s clean energy transition is widening as Green Energy Open Access (100 kW eligibility) and growing power exchange trading let businesses buy power beyond their local distribution utility.
• Industrial and commercial users consumed ~790 billion units of electricity in FY25, representing nearly half of India's total consumption and over ₹6 lakh crore in expenditure, while open-access adoption grew by nearly 33% in FY25.
• 3one4 Capital is backing Neufin Energy, co-founded by Rahool Gadkari and Rushil Noronha, to aggregate third-party renewable supply and deliver flexible energy plans ranging from 3 months to 25 years along with energy management software.

Indian businesses consume an extraordinary amount of electricity. In FY25, industrial and commercial users accounted for approximately 790 billion units, close to half of India's total electricity consumption, according to the Bureau of Energy Efficiency. At an illustrative value of ₹8 per unit, that is more than ₹6 lakh crore of electricity consumed in a single year. The actual cost varies by business, state and source of power, but the scale is difficult to ignore.

Now consider what a relatively small improvement in procurement could mean. Saving ₹1 per unit on just a tenth of that consumption would put nearly ₹8,000 crore a year back into the hands of Indian businesses. This savings opportunity is not limited to one customer segment, one state or even one way of sourcing electricity. It exists wherever a company can secure a better price, structure a more suitable plan or manage its consumption more effectively.

That is the opportunity we see in Neufin Energy: a market of enormous recurring expenditure in which better choice and better execution can create considerable economic value for customers.
‍

A Large Market Where Buying Remains Complicated

Businesses routinely compare banks, insurers, logistics providers and software vendors. They should have similar expectations when buying electricity: a competitive price, clear terms, choice over the length of a commitment and confidence that the agreement will deliver what was promised. Yet energy procurement remains unusually difficult.

For many companies, the default is still the tariff charged by the local distribution utility. Alternatives exist, but evaluating them requires understanding generators, contract structures, credit terms, state-specific charges and how the business actually consumes electricity. A lower quoted tariff is not necessarily a lower landed cost, as the total effective rate includes additional layers such as transmission and wheeling charges, cross-subsidy surcharges, additional surcharges, and state-specific electricity duties. And an attractive long-term agreement may be unsuitable for a company whose facilities, production volumes or needs change over time.

Large enterprises often have teams that manage these decisions and may already operate captive generation or long-term power purchase agreements. Their challenge is different, not absent. They must keep comparing new supply options, coordinate contracts across facilities and understand whether the portfolio is delivering the best available economics. For businesses without those internal resources, the barriers are higher still.

Customers do not need to be persuaded that lower costs and more flexibility are desirable. They need access to alternatives that are easy to evaluate and practical to implement.
‍

Why This Opportunity Is Emerging Now

India spent much of the past decade and a half expanding generation capacity, including solar and wind power, while transmission and distribution capacity remained relatively stagnant in comparison. Increasingly, the key challenge is not merely how much energy the country can generate, but how efficiently businesses can procure and deliver it. Growing supply, evolving procurement rules and richer operational data are together creating options that were simply unavailable a few years ago.

The Green Energy Open Access Rules of 2022 lowered the general eligibility threshold for renewable power procurement from 1 MW to 100 kW, subject to applicable conditions and state-level implementation. More businesses can now consider buying cleaner, cheaper electricity from third-party suppliers. The rules have not removed the practical work involved in comparing tariffs, securing approvals and getting plans operational, but they have expanded the market in which that work matters.

Customers are responding. According to the Ministry of Power, open-access electricity consumption increased from 32.5 billion units in FY24 to 43.2 billion units in FY25, growth of nearly 33%. In the first half of FY26, volumes grew a further 45% year-on-year. A parallel shift is occurring on power exchanges: electricity traded via exchanges rose from 3.54% of total generation in FY17 to ~8% in FY24, reaching 10.34% so far in FY27. Commercial and industrial buyers currently account for just 12–15% of this exchange volume, highlighting substantial headroom for further expansion. This is already a meaningful market, but still a very small share of the overall electricity consumed by India's businesses.

We believe India is at the beginning of a much larger shift in how enterprises buy energy. Competition and choice will not emerge uniformly in every state or for every customer. But the demand for them is straightforward, and the commercial incentives are considerable.
‍

The Economics Extend Far Beyond Today's Open-Access Market

As more businesses gain access to alternative energy suppliers, more of India's electricity spending can be influenced by better procurement. For customers, the benefit is straightforward: lower bills, plans that suit their needs and less time spent managing electricity. Across a market this large, even modest improvements can add up to significant savings.

For Neufin Energy, the opportunity is to supply businesses with more competitively priced energy plans and optimise the overall energy portfolio for the same customers. The company can earn revenue from the sale of electricity (either directly or as an intermediary) and from the software and services that are required to start the flow of electrons in each state. It does not need to own power plants to participate in this market.

The market can also deepen as customers add more sources of supply. A manufacturer may combine utility power with rooftop solar, offsite renewable generation and storage. A multi-site enterprise may have different arrangements at each location. Many businesses today treat energy procurement as a single "signed and done" deal. However, active management of asset performance and contractual compliance, especially as regulations and generation output shift, can save companies lakhs by preventing lost generation and contract breaches. As this mix becomes more complex, tracking costs, asset performance, and contractual compliance becomes an ongoing operational requirement rather than a one-time transaction.

There is another reason for businesses to pay attention. Export-oriented manufacturers increasingly face emissions reporting and supplier standards from international customers. In Europe, the Carbon Border Adjustment Mechanism (CBAM) already prices electricity emissions for sectors like cement and fertilisers. The European Commission will review in 2027 whether to apply the same charge to steel and aluminium. Both are major Indian exports to Europe, where green electrons could command a premium. Access to verifiably lower-carbon power can therefore matter for commercial eligibility as well as cost, although renewable sourcing alone does not establish regulatory compliance. For many Indian companies, the most attractive solution will be one that lowers the electricity bill and helps meet these requirements together.
‍

What Neufin Energy Is Building

Founded by Rahool Gadkari and Rushil Noronha, Neufin Energy makes it easier for businesses to buy and manage competitively priced energy, cutting their energy cost on terms that work for them. It structures third-party supply, sourced from independent power producers, power exchanges and small asset owners, into easy-to-buy energy plans with tenures ranging from three months to 25 years. Neufin Energy helps customers compare plans on landed cost, savings potential and regulatory risk, then handles everything needed to get electrons flowing: regulatory approvals and physical infrastructure set-up included.

The company’s plans offer different combinations of price and commitment. The starting point is what a customer needs: how much electricity it uses, when it uses it, where its facilities are and how long it wants to commit. Neufin Energy maps those requirements to one of 90+ existing “energy plans” and manages the process through approvals and metering until energy delivery starts.

The model is also relevant across the enterprise market. A smaller manufacturer may be making its first  offsite power purchase. A larger group may already have substantial in-house capability but want new supply options or better visibility across its existing arrangements. Both benefit from more transparent prices, flexibility and reliable execution.

Neufin Energy is also building beyond the initial transaction. Its Lumen energy-management software is intended to help businesses monitor generation assets, track performance against contractual terms, review electricity bills across sites and manage energy from multiple sources. The opportunity is to help customers realise the savings they negotiated, improve asset performance through timely maintenance and hardware,and identify further improvements / supply opportunities as their needs change.

The company has already contracted 870 million kWh of electricity and assembled more than 90 energy plans across 16 states. Its supply network spans over 4 GW from more than 30 suppliers. These figures reflect contracted energy and available supply, rather than energy already delivered, but they demonstrate the breadth of the network being built. Enterprise clients including Mahindra Group, Club Mahindra, Smartworks and HiTech Group rely on Neufin Energy to manage energy procurement across multi-site operations.
‍

Why We're Backing Rahool, Rushil And the Team at Neufin Energy

We first became interested in Neufin Energy because its founders understood that cheaper electricity alone would not be enough. To make a better energy plan useful, a business must be able to understand its true cost, trust the counterparty, complete the necessary approvals and verify the outcome over time. Solving those problems requires knowledge of power markets, strong commercial execution and software that makes the complexity manageable.

The company's ambition is to turn energy into a competitive advantage for every business. They aim to make energy procurement and management simpler and more competitive for businesses with very different operating needs. That is a much larger opportunity.

India's electricity demand will continue to change as manufacturing, commercial activity, data centres and new industrial loads expand. More generation and more choice should create better outcomes for customers. Capturing those benefits, however, will require businesses that can connect energy supply to the realities of how enterprises buy, use and manage electricity.

We see this as a generational opportunity in India's energy market, and one that is still at an early stage. We are backing Rahool, Rushil and the Neufin Energy team to help build a better way for Indian businesses to buy energy.

DISCLAIMER

<sub>Details of all the funds managed by 3one4 Capital can be found here: https://www.3one4capital.com/aif-registration-details

For informational purposes only. This content does not constitute an offer to sell or a solicitation of an offer to buy units of any fund. Investments in AIFs involve market risks.</sub>

_{The views expressed herein are those of the author as of the publication date and are subject to change without notice. Neither the author nor any of the entities under the 3one4 Capital Group have any obligation to update the content. These publications are for informational and educational purposes only and should not be construed as providing any advisory service (including financial, regulatory, or legal). It does not constitute an offer to sell or a solicitation to buy any securities or related financial instruments in any jurisdiction. Readers should perform their own due diligence and consult with relevant advisors before taking any decisions. Any reliance on the information herein is at the reader's own risk, and 3one4 Capital Group assumes no liability for any such reliance. Certain information is based on third-party sources believed to be reliable, but neither the author nor 3one4 Capital Group guarantees its accuracy, recency or completeness. There has been no independent verification of such information or the assumptions on which such information is based, unless expressly mentioned otherwise. References to specific companies, securities, or investment strategies are not endorsements. Unauthorized reproduction, distribution, or use of this document, in whole or in part, is prohibited without prior written consent from the author and/or the 3one4 Capital Group.}