“ONGC and NTPC were given exclusive rights to bid last week. It will last for about four weeks,” one of the people said on condition of anonymity.
The deal, with an equity value of approximately $800 million, will be among the largest in India’s green energy sector. Standard Chartered is handling the sales process.
The renewable energy company, which has a portfolio of 5 gigawatts (GW) of operating and under construction projects, is looking to sell a large stake. The deal could even turn into a 100% stake sale.
This comes against a backdrop of efforts by traditional energy companies to bridge the gap between electronics and molecular suppliers. To promote the development of new and renewable energy, NTPC and ONGC announced the establishment of a joint venture company (JVC) through their green energy subsidiaries NTPC Green Energy Ltd (NGEL) and ONGC Green Energy Ltd (OGL).
“NGEL has submitted an application to the Ministry of Corporate Affairs for a 50:50 joint venture with OGL,” the companies said in a joint statement on November 4. “The joint venture will also seek to acquire renewable energy assets. opportunity.
Mint Earlier reports said ONGC had joined the race and shareholders were also seeking to raise an additional $400 million to fund the company’s growth. Mint It was also reported that ONGC, JSW Group’s JSW Neo Energy and Singapore’s Sembcorp Industries Bhd have been shortlisted to submit binding bids to acquire a majority stake in Ayana Renewables after submitting a non-binding offer (NBO) List.
Bengaluru-based Ayana Renewable Power is the holding company of NIIF. Its other shareholders include the UK government’s UK International Investment Corporation and Eversource Capital.
Ayana plans to build a 10GW portfolio by 2025 and has projects in Andhra Pradesh, Tamil Nadu, Karnataka, Rajasthan and Gujarat.
Spokespeople for Standard Chartered and JSW Group declined to comment.
“We do not comment on market speculation,” an Ayana Renewables spokesperson said in an emailed response.
A spokesperson for BII said in an emailed response: “It is company policy not to comment on market speculation.”
Spokespersons for NIIF, NTPC, ONGC, Sembcorp and Eversource Capital did not respond to queries sent via email on Tuesday evening.
Green energy investment
In view of the changing energy landscape in hydrocarbons, ONGC has been actively looking for acquisition opportunities in the clean energy space. ONGC planned expenditure $Invest $1 trillion in green initiatives by 2030 to reduce our carbon footprint as part of wider efforts to achieve net zero emissions by 2038. energy portfolio and plans to expand its scale to reach 10GW by 2030.
NTPC has been active in India’s green energy space, NGEL plans to raise funds $Raising Rs 10,000 crore through initial public offering (IPO). It has a portfolio of 14.69GW, of which 2.92GW is operational and 11.77GW is contracted and awarded. It also has a pipeline of 10.97GW.
Experts say such a large-scale deal re-establishes confidence in China’s green energy investment philosophy.
“Market confidence has been somewhat weakened recently as investment demand has grown, but investors have also become more selective and demanding. As a result, deals are taking longer to complete. Anything over $500 million that brings in new investors The transaction is good news for all stakeholders and further affirms the strong industry outlook.
Mint reports that opportunities arising from India’s energy transition have led to several deals. India’s renewable energy installation capacity is 210GW, including 90.76GW of solar power and 47.36GW of wind power.
Rising power demand
The shift also comes at a time of rising power demand in India.
“Indian power demand is expected to increase 0.4% annually to about 140 billion units (BU) after falling for two consecutive months. Crisil Market Intelligence & Analytics wrote in a report on November 4 that from April to October, Electricity demand is expected to increase by approximately 4.7% annually.
Fitch Ratings said in an October report: “India’s electricity demand will grow by about 8% in 2024, building on 7.6% growth in 2023, after growing 8.4% in the first seven months of 2024. Our forecast is Based on India’s strong power demand.
“We also expect the increase in renewable energy capacity to gain significant growth momentum over the next two to three years. Prior to this, new project auctions increased significantly, with the volume of new project auctions in the fiscal year ending March 2024 (FY2024) increasing from last year 20GW during the same period rose to 70GW. Fitch expects the economic environment, characterized by stable interest rates and lower equipment prices, to continue to support capacity additions in the coming years.
NIIF is sponsored by the Government of India, which holds 49% of its shares. It mainly invests in core infrastructure areas such as transportation, airports, ports, logistics and roads, green energy, and digitalization. It manages approximately $5 billion of equity capital commitments across three funds (Master Fund, Fund of Funds and Strategic Opportunities Fund), investing in areas including ports and logistics, renewable energy, roads, digital infrastructure and manufacturing.
