New Delhi: In what will rank among the top deals in India’s clean energy space, Munjal family-promoted Hero Future Energies Pvt. Ltd has emerged as the front-runner to acquire Orange Renewable from Singapore-based AT Capital Group.
New Delhi-based Orange Renewable, a unit of AT Holdings Pte. Ltd, is among India’s largest renewable energy platforms with an operational capacity of 758 megawatt (MW), made up of 567MW of wind projects and 191MW of solar plants. Mint reported on 14 November about Hyderabad-based Greenko Group, backed by Singapore’s sovereign wealth fund GIC Holdings Pte. Ltd and Abu Dhabi Investment Authority, and Hero Future Energies being in separate talks to acquire the portfolio. “Greenko is no longer in the fray with the talks with Hero Future at an advanced stage,” said a person aware of the development, requesting anonymity.
Hero Future Energies has an operational portfolio of 1,200MW and is planning to put up a large grid-connected solar plant of up to 100MW capacity in South-East Asia. Backed by International Finance Corp. (IFC), the private sector investment arm of the World Bank, the renewable energy firm plans to expand its operations in Africa and India, and be present across the solar energy value chain.
“Hero Future is interested in Orange Renewable’s portfolio,” said a second person who also did not wish to be identified.
The portfolio of Orange Renewable, founded by Arvind Tiku, an Indian-born Singapore resident, has been up for sale for some time now. The Economic Times reported on 19 July about ReNew Power Ventures Pvt. Ltd being in active discussions with Orange Renewable to acquire its portfolio at an enterprise value of Rs6,175 crore. The two persons quoted above added that the deal will ultimately hinge on the valuation of the assets. Rothschild has been given the mandate to find a buyer.
Sudhir Nunes, chief executive officer, wind business at Orange Renewable, in an emailed response said, “Unfortunately we are unable to comment on market speculations.”
AT Capital Group’s portfolio includes investments in real estate, hospitality, natural resources, renewable energy, engineering and construction.
“The company will like to maintain its policy of not commenting on rumours except as required by law,” said a Hero Future Energies spokesperson in an emailed response.
Queries emailed to Tiku and spokespersons for Rothschild and Greenko Group remained unanswered at press time.
The largest deals till date in the Indian renewable energy space include Tata Power Co. Ltd’s acquisition of the entire 1.1 gigawatt (GW) renewable energy portfolio of Welspun Energy Ltd for $1.4 billion and Hyderabad-based Greenko Energies Pvt. Ltd’s acquisition of SunEdison Inc.’s Indian assets for $392 million in 2016.
In the largest global clean energy deal till date, a group of investors led by Global Infrastructure Partners last year announced plans to acquire Equis Energy for $5 billion. The sale includes the Indian portfolio of the Singapore-based renewable energy developer comprising green energy platforms Energon and Energon Soleq.
Large Indian clean energy firms have been trying to further augment their portfolio. A case in point being ReNew Power Ventures Pvt. Ltd which is exploring the acquisition of Waaree Energies Ltd’s solar power projects as it seeks to consolidate its position as India’s largest clean energy firm before a planned initial public offering, Mint reported on 27 December.
Among other deals lined up are ReNew Power’s acquisition of global private equity firm Actis Llp’s Ostro Energy Pvt. Ltd; Taaleri Plc’s purchase of a stake in Finland’s state-controlled power utility Fortum Oyj’s operational Indian solar power projects; and Subhash Chandra’s Essel Infraprojects Ltd mandating Investec, an investment bank, to find a buyer for its solar business. Besides, diversified conglomerate Shapoorji Pallonji Group is in stake sale talks for its solar portfolio.