2024-12-17 05:15:11 :
Mumbai: Investors are lining up to buy stakes in BluPine Energy, the India-based renewable energy platform launched by London-based global private equity firm Actis Capital in mid-2021, according to four people familiar with the matter who asked not to be named.
The development comes against the backdrop of rising investor interest in Indian clean energy assets, with several deals already concluded and more in the pipeline.
“Investment bankers have made multiple offers to Actis and the formal process is likely to start early next year,” a person familiar with the matter said.
The people with direct knowledge of Actis’ plans said discussions were at an early stage and Actis had not formally appointed a transaction banker, which could take up to a year to complete.
“The asset is performing well for private equity investors and could be worth about $1 billion if that happens,” the executive said.
He added that the investment firm was exploring divestment options given investor interest in other deals this year, with several bankers raising the idea of ​​obtaining an attractive valuation.
Meanwhile, in an email reply Mint Upon inquiry, Actis denied that it had included BluPine in the block. A spokesman for the investment firm said: “We would like to state that information regarding Actis exploring a divestment from BluPine Energy is misleading and incorrect.”
The private equity firm invests in sustainable infrastructure and real estate and manages $14.1 billion in assets in 60 countries.
What is Blue Pine Energy
In 2021, Actis used its energy fund 5 to invest US$800 million to establish BluPine, which aims to achieve a renewable energy portfolio of more than 4 GW in India by 2028. BluPine currently has approximately 2.6 gigawatts (GW) of solar and wind assets in India, with 1 GW of solar assets operational.
Operating assets include 404 megawatts (MW) of solar assets that the company acquired from Atha Group in November 2022. BluPine also acquired 369 MW of operating solar assets from Acme Group in March for an undisclosed amount.
The company is led by CEO Neerav Nanavaty and CFO Sanjeev Bhatia and has operations in Maharashtra, Rajasthan, Tamil Nadu, Karnataka, Telangana, Madhya Pradesh, Uttarakhand and Punjab have solar assets. The company is also developing wind assets in Gujarat and Karnataka and battery storage systems in Maharashtra.
“Large energy platforms have higher Ebitda multiples than smaller assets. So acquiring smaller operating assets can give them valuation arbitrage,” said the second person cited above.
Typically, he said, renewable energy deals in private markets are valued at nine to 10 times forward 12-month Ebitda. Ebitda stands for earnings before interest, taxes, depreciation and amortization.
clean energy action
To be sure, the pace of mergers and acquisitions in India’s renewable energy sector has accelerated in recent months as investors look to bet on clean energy developments in New Delhi.
In August this year, the Asian Development Bank (ADB), the World Bank’s International Finance Corporation (IFC) and Germany-based DEG invested in Hyderabad-based green energy platform Fourth Partner Energy, according to a statement from the platform. It received an undisclosed equity stake for a total of $275 million.
Last week, major investors including Canada Pension Plan Investment Board, Emirates Masdar, Chairman Sumant Sinha and a unit of the Abu Dhabi Investment Authority, according to filings with U.S. regulators Investors have proposed privatizing ReNew Energy Global, which is listed in the United States.
According to Reuters, the investor’s offer represents an 11.5% premium to the company’s share price, valuing India’s second-largest renewable energy platform at $2.8 billion.
In September last year, Delhi-based renewable energy company Juniper Green Energy announced a $350 million investment from Singapore’s AT Capital Group and the Netherlands’ Vitol.
Other notable assets in the market include Shell’s Sprng Energy, Macquarie’s Stride Climate and Sweden’s EQT-backed O2Power.
Interestingly, Actis itself is reportedly in the race to acquire Stride Climate, which gives us an insight into the market frenzy, with investors weighing high-return early exits on the one hand, and long-term prospects on the other. While the long-term prospects for the industry are bright, project execution in India is a key challenge for many companies.
India’s installed renewable energy capacity reached 203 gigawatts as of October, the Indian government said on Friday. By comparison, the country’s total electricity generation capacity is 453 GW.
According to government data, solar power accounts for the largest share in India’s clean energy mix at 92 GW, followed by wind power at 52 GW and hydropower at 47 GW. Bioenergy (including biomass and biogas energy) adds a further 11 GW to the renewable energy mix.
New Delhi has set a target of 500 GW of non-fossil fuel power generation by 2030, with 50% of cumulative power generation coming from these renewable energy sources.
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