Companies
Qatar's Nebras deal with Aditya Birla Group's green arm on hold
Summary
- The deal to acquire up to 49% for $400 million in Aditya Birla Renewables hits a bump due to valuation mismatch
Qatar's Nebras Power’s plan to acquire up to 49% stake in Aditya Birla Group’s renewable energy business for around $400 million has been put on hold due to “valuation mismatch", according to two people aware of the development.
The other bidders that participated in the sale process for Aditya Birla Renewables Ltd were Alberta Investment Management Corporation (AIMCo) and BlackRock’ Global Infrastructure Partners (GIP).
Mint earlier reported that Aditya Birla Group had hired Standard Chartered to sell up to 49% stake in the group’s renewable energy business to raise around $400 million. On 18 December, Moneycontrol reported that the conglomerate was in advanced negotiations with Nebras Power to scale up its renewable resources business housed under Grasim Industries.
India targets to more than double its green energy capacity from the current level to 500 gigawatts by 2030, drawing interest from the world’s biggest institutional and corporate investors.
Also read | India's renewable energy boom stunted by regulatory ambiguity over sales accords
“But the Indian market faces a particular challenge because returns are at the lower end, whereas execution risks are relatively higher," said Vinay Rustagi, senior director, global head of renewables, Crisil Ltd. “The utility scale auctions have always been intensely competitive, and the C&I (commercial and industrial) market has moved in the same direction as more players have moved in. Moreover, global return expectations have moved up in response to key macroeconomic factors."
Spokespersons for Aditya Birla Group, Standard Chartered and Global Infrastructure Partners declined to comment. Queries emailed to the spokespersons of Nebras Power, and AIMCo on Monday remained unanswered.
Aditya Birla Renewables plans to more than double its installed renewable energy capacity to 4.5 GW by FY26 through utility and commercial and industrial (C&I) projects. The investment portfolio of Doha-headquartered Nebras Power, owned by Qatar Electricity Water Company, includes an installed capacity of 6.79 GW. AIMCo, which manages $168.9 billion worth of assets, has an infrastructure and renewable global portfolio of $20 billion. BlackRock Inc. recently acquired GIP that has around $170 billion of assets.
Also read | Fortum to sell majority stakes in renewable, EV charging businesses in India
A number of green energy deals are in the works in India, as reported by Mint. Thailand’s energy firm Banpu Public Company Ltd recently joined the fray with former US vice-president Al Gore-headed Generation Investment Management’s Just Climate LLP, and Singapore’s CapitaLand Investment Ltd to acquire Eversource Capital-backed Radiance Renewables Pvt. Ltd in a deal having an enterprise value of around $325 million. A host of Australian superannuation funds such as AustralianSuper, UniSuper and Hostplus, among others, are also eyeing investment in domestic renewable energy space.
India has an installed renewable energy capacity of 210 GW, including 90.76 GW of solar and 47.36 GW of wind power. States such as Rajasthan, Gujarat, Tamil Nadu and Karnataka have taken the lead in setting up green energy projects with an installed capacity of 29.98 GW, 29.52 GW, 23.70 GW, and 22.37 GW, respectively.
In addition, the government is focusing on promoting local manufacturing, with around 10 GW of installed cell production and 60 GW of module manufacturing capacity. The country’s renewable energy sector has seen an investment of ₹8.5 trillion between 2014 and 2023.
