The JSW group has initiated talks with several private equity (PE) funds, including American investment management firm Apollo Global Management, to acquire its renewable power producer, Mytrah Energy (India) Pvt Ltd (MEIPL).
The firm’s acquisition amount will be announced next month, banking sources said. The current enterprise valuation is $2 billion. JSW group’s JSW Energy has a target to add 15 gigawatt (Gw) of renewables in its portfolio with an investment of $10 billion by 2030. Mytrah has a portfolio of wind and solar power projects with a capacity of 1.8 Gw. MEIPL is a subsidiary of Bindu Vayu (Mauritius), which is fully owned by Mytrah Energy (MEL). MEL was earlier listed on the Alternative Investment Market (AIM), a sub-market of the London Stock Exchange. Its main promoter, Ravi Kailas, chairman of Mytrah Group, holds 93 per cent of shares in MEL.
Lenders are currently looking at various parameters to finance the transaction, including the power purchase agreement (PPA) and its clauses. “If the (MEL) projects have additional payment security mechanisms, compensation for grid unavailability, and financial protection in case of an offtaker default, then the investors would look at financing the acquisition,” said a banker working close with the developments.
MEL’s operational assets as separate special purpose vehicles are currently spread across 17 wind farms and 21 ground-monitored solar power farms in Punjab, Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Karnataka, Telangana, Andhra Pradesh and Tamil Nadu, according to the company's website. MEL sells power mostly to state grids through 13-25-year PPAs.
JSW Energy has a market valuation of Rs 35,000 crore as of Friday with a share price of Rs 212.
Most of the top Indian conglomerates, including Tata, Adani, JSW and Reliance Industries are investing billions of dollars in the renewable power sector. The share of renewable energy in total electricity generation capacity has touched 37 per cent in 2021 from 31 per cent in 2012. Of this, solar power has expanded the fastest, touching 60 Gw in 2021 from less than 1Gw in 2011. The growth in renewables can be attributed to a combination of improving economics and supporting policies by the Centre. India aims to generate 500 Gw of electricity through renewable energy sources by 2030 as compared to 158 Gw at the end of 2021. To meet this goal, the renewables sector needs $241 billion of investments by 2029.
