PremiumJapan’s financial services firm ORIX Corp. and Greenko Energy Holdings have concluded a deal for the investment of $980 million in Greenko, said two people aware of the development. This is the single largest foreign investment transaction in India’s clean energy space.
In addition, Greenko has also completed the acquisition of 40% stake in Teesta Urja Ltd, which is setting up the 1.2 gigawatt (GW) hydropower project in North Sikkim, for $250 million.
With the ORIX deal also adding 873 MW of its operating wind assets to Hyderabad-based Greenko’s portfolio, the completion of both these transactions takes Greenko’s operational portfolio to 7.3 GW—India’s largest operational clean energy portfolio.
The ORIX deal, announced last September, also pegged GIC Holdings Pte. Ltd and Abu Dhabi Investment Authority (ADIA) backed Greenko’s equity and enterprise value at $5.75 billion and $10.2 billion respectively.
Greenko posted a revenue of $661 million for the year ended 31 March 2020. The two sovereign funds— GIC and ADIA— have so far infused $2.2 billion into Greenko, which was founded by president and joint managing director Mahesh Kolli and chief executive and managing director Anil Kumar Chalamalasetty.
Mahesh Kolli declined comment.
Queries sent to ORIX Corp. on Tuesday afternoon weren't immediately answered.
“Both the deals have been formally concluded. The ORIX investment is at a pre-money valuation of $5.75 billion," said one of the two people cited above requesting anonymity.
While pre-money valuation is the equity value before the new round of financing, post-money valuation includes the fresh round of capital injection.
While GIC and ADIA currently hold 56% and 14%, respectively, in Greenko, ORIX has a 17.5% stake. Kolli and Chalamalasetty own the remaining stake.
India’s green energy deal pace has been witnessing significant traction, given marquee deals such as Goldman Sachs-backed ReNew Power’s proposed merger with Nasdaq-listed special purpose acquisition company (SPAC) RMG Acquisition Corp. II (RMG II), at an enterprise value of around $8 billion, that was announced on Wednesday. ReNew Power may also explore an India listing, as reported by Mint on Friday.
Greenko on its part has pivoted towards battery storage and green hydrogen. Greenko is building power storage projects with total capacity of 8 GW across six states in India as part of its plan to provide on-demand power from wind and solar projects and is also partnering with state-run NTPC Ltd to develop "round-the-clock" power supply. This assumes significance given that solar and wind are infirm sources of energy, with storage holding the key to providing on-demand electricity from these green energy projects.
Greenko has also tied up with Italy’s Snam S.p.A. for setting up an equal joint venture to develop a green hydrogen business in India. This comes against the backdrop of state-run Solar Energy Corp. of India looking to invite bids to build green hydrogen plants, which will use renewable energy sources.
Mint reported on 13 September about the Hyderabadbased firm’s plan to invest around $1 billion in a new battery storage business that also includes a plan to produce lithium-ion batteries in India for power grid-scale applications and electric vehicles.
In a related development, Greenko is also raising $1 billion for refinancing. Its new bond raise issue has been assigned a Ba1 rating by Moody's Investors Service. Through the bond route, Greenko has raised $3.5 billion from dollar bond and Rs750 million from the Indian market till now.
