APAC: Actis close to acquiring 400MW Indian solar assets

18 April 2018 - 12:00 am UTC

Less than a month after selling renewable energy platform Ostro Energy to ReNew Power, Actis is eyeing the solar portfolio of conglomerate Shapoorji Pallonji Group, sources said.

The talks involve a 400MW solar portfolio, which has an equity valuation of about INR 12bn (USD 183m), one of the sources said. 
 
Actis had reportedly also been in talks with Karnataka-based conglomerate Bhoruka Group to acquire its 321MW renewable assets portfolio for an enterprise value of INR 27bn (USD 411m).
 
However, a source familiar said the second deal “has not moved ahead” due to valuation differences, meaning Actis would now shift its focus to the Shapoorji Pallonji deal.

Last year, Shapoorji was looking for a partner. However, later it decided to put its solar business on the block and in January appointed Credit Suisse.

Consolidation is underway in Indian clean energy, with big players seeking scale to gain access to cheaper finance, according to Jasmeet Khurana, an independent renewables analyst.
 
Because companies with 400MW to 600MW of capacity are finding it difficult participate in auctions, they are opting to sell up, a senior executive at a developer said. To be competitive in India, companies need to have at least 1GW, he added.
 
Earlier this month, Goldman Sachs-backed ReNew Power acquired Actis-backed Ostro for INR 100bn (USD 1.5bn), becoming India’s largest renewables company with 5.6GW of assets.
 
A spokesperson for Shapoorji confirmed the company was in “advanced talks” with investors to sell its solar assets but declined further comment.
 
Founded in 2011, Shapoorji Pallonji Solar Holdings comprises seven operational projects (272MW) and an additional 130MW in development, according to report by ratings agency ICRA.
 
The projects are spread across Tamil Nadu, Telangana, Rajasthan and Maharashtra, and housed under eight SPVs, the report said. Shapoorji is a conglomerate with USD 5bn in revenue. 

Sanjiv Aggarwal, a partner at Actis, was quoted saying that the private equity fund’s growth strategy would involve both auctions and M&A. Longer term, he said it plans to exit Sprng, another renewables platform, once it reached a capacity of 1.75GW from the current 750MW.
 
In an onshore wind auction conducted by Solar Energy Corporation of India earlier this month, Sprng Energy won the right to supply 300MW at INR 2.51 per kWh.
 
Actis declined to comment, while Credit Suisse did not immediately respond to request seeking comments.

Actis