Mumbai: Avaada Power Pvt. Ltd, a renewable energy company started by a co-founder of Welspun Renewable Energy Pvt. Ltd, is looking to raise as much as Rs1,500 crore in structured credit as it looks to build out its renewable energy portfolio and strengthen its engineering, procurement and construction (EPC) business, two people aware of the company’s discussions with potential investors said.
Avaada, founded by Vineet Mittal, is currently in the process of bidding for various renewable energy projects and is raising funds to meet operational expenses, according to the people cited above, who requested anonymity.
“The company has approached several large structured credit funds," the first of the two people said on condition of anonymity. “The funding will be raised at the holding company level, which will then infuse the funds into various special purpose vehicles of the company." An email sent to Avaada remained unanswered as of press time. Mint reported in July that Avaada was one of the bidders to build solar capacities at Adani Renewable Energy Park Rajasthan Ltd. It also placed a bid at the auction of 500MW of capacity at the Bhadla solar park in Rajasthan. The company has in the past implemented projects aggregating to 1,141MW.
Last year, Welspun Renewable Energy, co-founded by Mittal and B.K. Goenka, sold its renewable energy business to Tata Power Renewable Energy Ltd for Rs9,249 crore. According to a recent report by Care Ratings, the promoters of Avaada are expected to infuse a part of the sale proceeds into the new company.
EPC business of WREPL is under the process of a demerger and would be transferred to a subsidiary of Avaada.
Mint reported in July, citing people aware of the matter, that GE Energy Financial Services was looking to invest in the renewable energy projects of Avaada.
India’s renewable energy sector has seen massive investments in equity and debt from large sovereign wealth funds, pension funds and structured debt lenders such as Piramal Finance.
Earlier this year, Piramal Finance lent Rs1,800 crore to Mytrah Energy Ltd in the largest structured credit deal in the renewable sector. The sector has also seen significant consolidation with several large acquisitions taking place in the recent years.
Mint reported in December that ReNew Power Ventures Pvt. Ltd, India’s largest renewable energy company, is close to acquiring Ostro Energy Pvt. Ltd, the company that holds the renewable energy assets of buyout firm Actis Capital, for an enterprise value of Rs10,000 crore in what could potentially be one of the largest deals in the renewable sectors. India has set a target of 175GW renewable power installed capacity by the end of 2022. This includes 60GW from wind power, 100GW from solar power, 10GW from biomass power and 5GW from small hydro power.
Renewable power now accounts for close to 15% of the total installed capacity with projects worth 16,676MW commissioned and 6,500MW under installation, according to the latest available data.