Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) plans to invest an additional $75 million in Indian solar power developer Azure Power Global Ltd.
CDPQ’s stake in Azure Power will increase from 41.4% to 49.4% after the investment, the pension fund said in a statement.
The transaction is subject to the approval of Azure Power’s shareholders and other customary closing conditions, CDPQ said, adding that it expects the deal to be complete in December.
CDPQ had first invested in Azure Power in September 2016. The initial investment of $75 million, which was CDPQ’s first India deal, was made just before Azure Power listed on the New York Stock Exchange. Last year, the pension fund invested an additional $100 million more.
The fresh capital infusion will take CDPQ’s total investment in Azure to around $320 million from $245 million.
In August, VCCircle had reported how Azure Power was battling weak stock prices and other challenges such as a leadership change after founder Inderpreet Wadhwa retired. However, shares of Azure have rallied more than 30% since early August to trade around $13.37 apiece on the NYSE. This gives the company a market value of around $545 million, which means the value of CDPQ’s stake would be around $269 million.
CDPQ is already Azure’s biggest shareholder. International Finance Corporation (IFC), the World Bank’s private-sector investment arm, and venture capital firm Helion Venture Partners are the other big shareholders. German development finance institution DEG and France’s Proparco also own small stakes.
CDPQ, Canada’s second-largest pension fund opened its India office in 2016, and has rapidly ramped up investments in the country since then. It has so far invested nearly $5 billion across sectors such as infrastructure, real estate, stressed assets and renewable energy, among others.
Azure is the only Indian independent power producer to be listed on the NYSE. Other major rooftop solar companies in the country include CleanMax Solar, Amplus Energy Solutions and Sunvest Energy Pvt. Ltd.
Since its inception in 2008, Azure Power has developed a pan-India portfolio of 3 GW comprising operating and under-construction solar projects in 23 states.
