New Delhi: New York-based private equity firm Blackstone Group Lp will invest $300 million (Rs.1,398 crore) for a significant minority stake in unlisted Indian power developer Moser Baer Projects Pvt. Ltd. The investment is Blackstone’s second power sector deal in India.
“We are actively in dialogue with other power players (for picking up a stake),” Blackstone India chief Akhil Gupta told reporters, adding that the equity firm had an “appetite” to invest up to $1 billion in India’s power sector in the next three-five years.
Energy plan: Blackstone India chief (left) Akhil Gupta and Moser Baer Projects founder Deepak Puri at the news conference in New Delhi. Ankit Agrawal / Mint
Blackstone has already invested $1.25 billion in Indian projects, with a majority of the funds committed to infrastructure and logistics. Its previous deal in the power sector was with Monnet Power Co. Ltd, a subsidiary of Monnet Ispat and Energy Ltd, which owns a coal-fired plant in Orissa.
“Infrastructure development continues to remain one of our key investment themes in India. We have been studying the Indian power sector for over a year and are excited to partner with Moser Baer,” Gupta said.
Moser Baer Projects has three coal-fired projects of 1,000-1300MW capacity, 10 solar projects and two hydro-power projects in the pipeline. It has one operational solar energy plant in Germany. Among its thermal projects, one is under construction and two are awaiting clearances.
Moser Baer Projects’ chief financial officer Sushil Bhagat said the company will be prepared to go public in another five years.
“Unlike our competitors we must demonstrate our capabilities to execute our projects. We will be going public by 2015 calendar year, by which stage we will have 1,500MW in operation, and another 3,500MW under construction, while 5,000-6000MW (will be) in the pipeline.”
The power sector is typically considered a hard sector to invest in by foreign utility firms, but Bhagat disagrees.
“I can’t speak for others, but energy is an interesting area. My professional experience tells me that the risk-return profile of power is very attractive because there is a huge power deficit in the country and, therefore, there is a market,” he said.
Reuters contributed to this story.