MUMBAI: India’s renewable energy deal pipeline has stalled as buyers and sellers remain locked in a stalemate over asset valuations, leaving several multi-billion-rupee transactions stuck in prolonged negotiations.
Market participants are now looking to the ₹3,100 crore initial public offering (IPO) of CleanMax Enviro Energy Solutions Ltd to break the deadlock. Investor demand for the public market share sale of Clean Max is expected to help set a pricing benchmark for private market transactions in the sector, including platform sales, stake deals, and upcoming listings.
While the first half of 2025 saw some strategic platform acquisitions, these were largely private, with deal structures and valuation rationales not made public, leaving buyers and sellers without a transparent reference point.
“Over the last year, the bid-ask spread between project developers and buyers has widened due to global interest rate environments and capital expenditure requirements,” an investment banker who specializes in renewables deals told Mint, requesting anonymity.
Deal backlog
Several high-profile transactions in India's renewable energy sector have remained stuck in negotiations for a while now. Shell Plc is attempting to sell Sprng Energy, a 5-gigawatt (GW) platform acquired in 2022. General Atlantic-owned Actis Llp is negotiating a stake sale in BluPine Energy, which holds a 3 GW portfolio.
“Bidders for Sprng and BluPine have paused submissions,” said an advisor on one of the transactions, who asked not to be identified discussing private negotiations. “Private equity sellers demand premiums, but buyers are now waiting to see if institutional investors will absorb the Clean Max issuance at its enterprise value-to-Ebitda ratio.”
Avaada Electro, backed by Thailand's PTT Group and Brookfield, has confidentially filed for an IPO that can be worth up to ₹10,000 crore, while Continuum Green Energy is yet to launch its IPO, almost a year after securing regulatory approval, as pricing concerns clash with asset valuations.
Global investors including Macquarie, Actis, Blackstone and Sembcorp are also preparing to bid for a controlling stake in Welspun New Energy and would place binding bids soon, Mint reported earlier.
Pricing expectations for green assets have stalled as buyers await public market comparables, the investment banker cited earlier said. The last energy platform to list in India before CleanMax was NTPC Green Energy, which listed at an EV/EBITDA of 53.4x at the upper end of its price band. ICICI Securities estimates this multiple had risen to 57.4x by the end of FY26.
The price investors get when they sell their CleanMax stake will help decide how other investment firms plan to sell similar renewable energy businesses and return money to their backers, the banker added.
IPO visibility
CleanMax’s IPO, which closes on 25 February, has fixed a price band of ₹1,000-1,053 per share, valuing it at ₹12,325 crore at the upper end. This implies an EV/EBITDA multiple of over 16x, based on annualized earnings for the first half of fiscal 2026 on a post-issue basis — well below the 19.9x average of listed peers as of March 2025, making it a conservative valuation.
"There is now somewhat of a consensus that this multiple will determine the baseline for competing asset sales," the deal advisor told Mint.
As per latest data available, the CleanMax IPO was subscribed 94%, with qualified institutional buyers oversubscribing their portion 2.8 times. Non-institutional investors subscribed 0.54 times, while retail investors bid for only 0.06% of shares.
CleanMax operates 2.8 GW of commercial and industrial renewable capacity. The company will use ₹1,123 crore from the fresh issue towards debt repayment. Existing investors, including affiliates of Brookfield Asset Management, are selling shares worth ₹1,900 crore through the offer for sale. The offer also comprises a fresh issue of shares worth up to ₹1,200 crore.
The IPO follows a ₹1,185 crore pre-IPO fundraise from investors including Temasek and Bain Capital, and comes after a slow 2025 for private equity buy-ins in the renewables sector.
Several large energy transactions took place last year as private equity (PE) firms exited renewable platforms. The ONGC–NTPC Green acquisition of Ayana Renewable Power for $2.3 billion stood out as one of India’s largest clean-energy M&A deals, while JSW Neo Energy’s acquisition of the O2 Power renewable platform reflected conglomerates pursuing inorganic growth.
The first half of 2025 also saw several billion-dollar platform acquisitions amid private equity exits and restructurings in conglomerates such as Vedanta. With limited PE participation, buyers secured capacity, grid-scale and storage-ready assets at scale.
Deal lawyers said the M&A pipeline has accumulated a backlog in recent months as sellers and buyers failed to reach consensus on equity valuations.
"With the CleanMax IPO being one of the first private equity backed renewable platforms to test the markets after a prolonged lull, it effectively becomes a near term price discovery event for the sector," said Madhura Samant, managing partner at Elarra Law Offices.
Waiting for a peer to list publicly also allows renewables platforms to structure deals with greater pricing flexibility, said Archana Balasubramanian, a partner at Agama Law Associates.
"Practically speaking, bidders are reframing diligence and pricing windows. They are keeping valuations open pending public listings and building in more flexible adjustment mechanics. Waiting for the CleanMax listing will help in providing the adjustment mechanics or other strategic hold back / early exit provisions in agreements," she explained.
CleanMax shares is expected to list on the exchanges on 2 March. Advisors for Sprng Energy, BluPine and Welspun New Energy are expected to resume pricing discussions in the following weeks.
Queries sent to Shell, BluPine, Avaada and Continuum were not immediately answered.