Mahindra Susten, the renewable business arm of Mahindra group, which is in the process of selling 160 megawatts (MW) of solar assets, has received interest from two potential buyers, CLP India and the Piramal group, said two people aware of the development, requesting anonymity.
Mint had reported in April that the Mahindra Group had appointed investment bank Avendus to seek buyers for a part of its solar portfolio.
“They (Mahindra Susten) have received interest from CLP India and Piramal, which recently tied up with Canadian pension fundCPPIB, to buy renewable assets under an infrastructure investment trust (InvIT) structure. They had received interest from other parties, too, but these two are currently looking into the deal," said the first person. The sale process could fetch a valuation of over ₹1,000 crore, he added.
“Mahindra Susten’s business model is to build and sell assets," said the second person, adding that it will use the sale proceeds to develop its pipeline of around 1 gigawatt (GW).
When contacted, a Mahindra Susten spokesperson declined to comment. “At CLP, as a policy, we do not comment on market speculation," a CLP spokesperson said in an emailed response. Emailed queries to the Piramal group did not elicit any response.
Mahindra Susten offers diversified services within the renewable energy and cleantech space such as turnkey solar engineering, procurement and construction services, for utility-scale solar and rooftop solar products, solar car charging stations, telecom tower solarization, operations and maintenance.
CLP India, which is backed by Canada’s second largest pension fund Caisse de dépôt et placement du Québec (CDPQ), has emerged as one of the major buyers for infrastructure assets in recent times. On 3 July, Kalpataru Power Transmission announced that it had entered into a binding agreement with CLP India Pvt. Ltd to sell its stake in three power transmission assets for an enterprise valuation of ₹3,275 crore.
Mint had reported on 29 May that CLP India was engaged in talks to acquire Morgan Stanley Infrastructure Partners-owned Continuum Wind Energy. Continuum has more than 700MW of operational wind assets and it has a pipeline of almost 1,700MW, making it one of the largest portfolios on sale in the market right now.
CLP’s India portfolio includes renewable and conventional energy amounting to over 3,000MW. CLP India’s sixteen wind energy projects and three solar energy projects span across seven states. The company also owns a coal-fired power plant in Haryana and a gas-based combined cycle power plant in Gujarat.
The Piramal group tied up with Canada’s largest pension fund CPPIB in May to co-sponsor India’s first renewable energy-focused infrastructure investment trust. The proposed InvIT will have an initial targeted corpus of $600 million with an option to scale up further. CPPIB and Piramal will initially allocate $360 million and $90 million, respectively, to the corpus.
The InvIT plans to acquire up to 1.5-2GW of stable and long-term cash-generating renewable assets, with a focus on diversification of clients of both solar and wind assets, as well as electricity customers.
The Indian renewable energy space has seen strong merger and acquisition activity recently. Mint reported on 12 April that ReNew Power Ltd, India’s largest clean energy company, and state-run power utility NTPC Ltd have shown interest in the ongoing sale process of PTC India Ltd’s wind power business, which includes 290MW of wind assets. Fotowatio Renewable Ventures also plans to exit its only investment in the Indian solar power space and Engie SA is planning to sell a significant stake in the French energy firm’s Indian solar business.
Several major M&A deals were also struck in the sector last year.
Greenko Group, one of India’s top renewable energy platforms, bought Orange Renewable from Singapore’s AT Capital Group at an enterprise value of under $1 billion and another 385MW of renewable assets from Skeiron Renewable Energy.