Masdar, AIIB, Sojitz, Mitsubishi, Gentari, IFC eye Hygenco stake in $400 mn deal

Among the interested parties are UAE’s Masdar (Abu Dhabi Future Energy Company), Beijing-headquartered Asian Infrastructure Investment Bank (AIIB) and Australia's Macquarie Group, which have signed non-disclosure agreements (NDAs).

Other firms that have signed NDAs include Japan's Sojitz Corporation, Mitsubishi Heavy Industries Ltd (MHI) and Marubeni Corporation, World Bank’s International Finance Corporation (IFC), private equity firm Actis Llp, and Gentari, a unit of Malaysia’s state-run oil and gas company Petroliam Nasional Bhd or Petronas.

“It’s not that everyone who has signed the NDA will submit an NBO (non-binding offer), but there is a significant interest in the transaction," one of the two people cited above said on the condition of anonymity. “While the process involves a 49% stake sale, there are interested companies who want to acquire as much as 74% in Hygenco Green Energies." 

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“The next stage of sale process will involve submitting NBOs, after which the shortlisted bidders will be taken to the next stage for submitting a binding offer," said the person cited above.

The fundraising will help Hygenco, which plans to develop 10 gigawatt (GW) of production and distribution assets by 2030, complete its portfolio.

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Mumbai-based investment management firm Avendus Capital is running the primary equity raise process.

“As a matter of policy, Masdar is unable to comment on market speculation," a Masdar spokesperson said in an emailed response.

Spokespersons for Avendus, Marubeni, Actis and IFC declined to comment.

Queries emailed to the spokespersons of Hygenco, AIIB, Macquarie Group, Sojitz Corporation, Mitsubishi Heavy Industries and Gentari on late Thursday night remained unanswered till press time.

Green hydrogen is generated by breaking down water in an electrolyzer. It can be combined with nitrogen to make ammonia, without using hydrocarbons in the production process. Green ammonia is used to store energy and in fertilizer manufacturing.

India's green energy push

India’s push to tap green energy sources such as green hydrogen has generated a significant interest among global players. Recently, Mint reported that state-run NTPC Ltd's subsidiary NTPC Green Energy Ltd (NGEL) was in talks to supply green hydrogen to state-backed oil refiner and marketer Hindustan Petroleum Corp. Ltd (HPCL) and copper and aluminium maker Hindalco Industries.

Also Read: Gentari plans minority stake sale in C&I assets to raise about $400 million

Malaysia's Gentari also plans to invest $1.5 billion for 30% stake in AM Green Ammonia Holdings, a unit of AM Green, set up by Greenko Group founders Mahesh Kolli and Anil Kumar Chalamalasetty. AM Green Ammonia will produce 5 million tonnes per annum (mtpa) of green ammonia, which is equivalent to about 1 mtpa of green hydrogen.

Deloitte India in a 20 June report said it expects a “decline in EV (electric vehicle) adoption post-2045 as greener fuel options such as green hydrogen will become more prevalent and technological advancements will enhance fuel efficiency".

Avendus Capital in a 4 April report added that India offers a $125 billion investment opportunity across the green hydrogen value chain by 2030.

India has set a target to produce 5mtpa of green hydrogen by 2030. The Centre launched the national green hydrogen mission last year with an outlay of over Rs19,000 crore, including support for manufacturing electrolyzers and producing green hydrogen. 

Several state-run majors such as Indian Oil Corp. Ltd and GAIL Ltd, and private sector firms such as ACME, ReNew Energy, Larsen & Toubro Ltd, Reliance Industries Ltd and the Adani Group have announced plans for green hydrogen production.