Mahindra Susten looks to sell around 160MW of solar power assets

Mumbai: Mahindra Susten, the renewable business arm of Mahindra group, has launched a formal process to sell around 160 megawatts (MW) of solar assets, two people aware of the development said.

The company offers diversified services within the renewable energy and cleantech space, such as turnkey solar engineering, procurement and construction services, both utility-scale solar and rooftop solar products, solar car charging stations, telecom tower solarization, operations and maintenance.

“They (Mahindra Susten) have recently started reaching out to investors, both strategic and financial, to sell a part of their portfolio of solar assets. They are selling around 160MW in the current process,” said one of the two people cited above, requesting anonymity as he is not authorized to speak to reporters.

The sale could fetch an enterprise valuation of close to  ₹2,000 crore, he said.

“Their business model is to build and sell assets. They will use the capital from the sale to develop their pipeline. They have a pipeline of around 1 gigawatts (GW),” he said.

The sale process of these solar assets is being managed by investment bank Avendus Capital, according to the second person cited above.

Emails sent to Mahindra Susten did not elicit any response. Avendus Capital declined to comment.

There are increasing instances of mergers and acquisitions (M&As) in the Indian renewable energy space because of falling tariffs and the capital intensive nature of the business, particularly in the initial stage, making availability of low-cost funds critical for the success of a project.

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.

Other M&A deals in the works in the sector include Morgan Stanley’s exit from its wind energy platform Continuum Wind Energy, reported by Mint in January this year.

Fotowatio Renewable Ventures also plans to exit its only investment in the Indian solar power space and Edelweiss Infrastructure Yield Plus Fund is in talks with Engie SA to pick up a significant stake in the French energy firm’s Indian solar business.

Several major M&A deals were struck in the sector last year.

Greenko Group, one of India’s largest renewable energy platforms, acquired 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.

Source: Live Mint