Mumbai: IDFC Alternatives, the asset management arm of IDFC Ltd, is looking to exit its investment in Hyderabad-based renewable energy firm Mytrah Energy India Pvt. Ltd, ahead of the company’s proposed initial public offering (IPO), said two people aware of the development.
In September, Mint reported that Mytrah had started preparations for an IPO to raise between $250 million and $300 million. Mytrah had hired investment banking firms Nomura Financial Advisory and Securities (India) Pvt. Ltd and IDFC Bank to manage the share sale, Mint reported.
“The company, in preparation for its IPO is looking at various options to restructure its balance sheet. There is a feeling that it is debt heavy. One of the options is to give IDFC an exit,” said one of the two persons cited above, requesting anonymity, as the talks are private.
In 2011, IDFC’s infrastructure fund, under asset management unit IDFC Alternatives, invested Rs350 crore in Mytrah through a structured finance transaction.
As of 30 June, Mytrah’s long-term borrowings stood at $752 million, data from its website shows.
In April 2015, Mytrah raised $60 million in debt from Merrill Lynch International and Aion Direct Singapore. In November 2014, the firm raised another tranche of debt worth around $70 million from Merrill Lynch International and funds managed by affiliates of Apollo Global Management LLC.
Also in April, The Asian Development Bank sanctioned loans of up to $175 million to Mytrah to back the power producer’s new wind and solar projects.
In October, Mint reported that Mytrah Energy was in talks to raise around Rs800 crore (about $120 million) from Piramal Enterprises Ltd’s Structured Finance Group (SFG), to refinance its existing debt obligations.
A spokesperson for IDFC Alternatives declined comment. Mytrah Energy did not respond to e-mails seeking comment.
The firm, which started off as a wind power generator, entered the solar power business year. Mytrah Energy operates about 920 megawatts (MW) of wind energy capacity and recently won projects for about 500 MW of solar energy capacity.
Mint reported in July that IDFC Alternatives was working on exiting almost half a dozen portfolio companies in its first infrastructure fund to return capital to investors.
In 2009, IDFC Alternatives raised its India Infrastructure Fund, with a corpus of $927 million. The fund invested across infrastructure assets such as roads, thermal energy plants, ports and hospitals.
Tata Realty and Infrastructure Ltd (TRIL) is in talks to acquire an 18.4-km two-lane bypass in Durg, Chhattisgarh, from Nagpur-based infrastructure company SMS Ltd and IDFC Alternatives, Mint reported in October.
IDFC Alternatives is also looking to sell Sahyadri Hospitals, the largest chain of multi-speciality hospitals in Maharashtra, in a deal that could value the hospital chain at up to Rs1,000 crore. IDFC invested Rs190 crore in 2012 to acquire a 51% stake in the company.
The India Infrastructure Fund has completely exited city gas distribution firm Sabarmati Gas Ltd. It has partially exited investments in companies such as telecom tower operator Viom Networks Ltd, in which American Tower Corp. acquired a 51% stake last year for Rs7,635 crore, and Karaikal Port Pvt. Ltd.