International interest in Indian renewable energy companies has been rekindled with at least three large groups looking to acquire a stake in Hero Future Energies, a large privately-owned renewable energy project developer.
According to media reports, Abu Dhabi-based Masdar Clean Energy, Malaysia’s Petronas, and Singapore-based Sembcorp Group have entered separate talks with Hero Future Energies for a minority stake in the latter. Hero Future Energies is part of an industrial conglomerate owned by the Munjal family.
Hero Future Energies hopes to raise $300-350 million from the stake sale which would likely be used for further expansion of the company and its portfolio. The company currently has an installed capacity of 1.2 gigawatts with 500 megawatts under construction and 300 megawatts in the pipeline. The company plans to have an installed capacity of 3.5 gigawatts by 2022. Hero Future Energies is an active participant in solar and wind energy auctions across India.
Masdar does not have a footprint in India’s renewable energy market, and this could be a golden opportunity for the group to enter one of the fastest growing renewable energy markets in the world. Abu Dhabi Investment Authority, a sovereign wealth fund owned by Emirate of Abu Dhabi, owns a minority stake in ReNew Power, one of the leading renewable energy developers in India.
Petronas is reportedly also in talks with Amplus Energy — one of the largest rooftop solar power producers in India. The Malaysian giant is looking to acquire a majority stake in the company at a potential investment of Rs 2,700 crore ($380 million).
Sembcorp already has a large footprint in India. It owns thermal power assets as well as large-scale wind and solar power project across the country. The company has been looking to expand its portfolio through acquisition in India and had once scouted assets owned by Orange Renewables and SunEdison India. Sembcorp also owns majority stake in Green Infra which has a portfolio of 1.7 gigawatts of wind and solar power capacity.
India is a highly attractive renewable energy market. The country eyes installed solar and wind energy capacity of 160 gigawatts by March 2022, and 490 gigawatts by March 2030. These massive targets would translate into a huge market opportunity for investors.
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