Chennai-based public listed renewable energy firm of the Shriram Group, Orient Green Power Company has received its board approval to raise Rs 100 crore ($15.3 million) from Edelweiss Group companies, according to a stock market disclosure.
The company's board in its meeting on Wednesday approved a proposal to raise Rs 250 crore ($38.2 million) through a preferential allotment to promoters and others.
The promoters will subscribe to shares worth Rs 150 crore through SVL Ltd (formerly known as Shriram Industrial Holdings Ltd) and its subsidiaries.
The rest will be raised from Edelwiess Group companies EW Special Opportunities Fund II Pte Ltd, Ecap Securities Ltd and Forefront Capital Management Pvt Ltd.
Although the pricing of the proposed issue is not yet frozen, based on the current market price, Edelweiss entities would together pick around 10 per cent of the diluted equity base of the firm, as per VCCircle estimates.
The overall promoter holding will shrink marginally from 75 per cent to around 73 per cent.
Orient Green Power was formed in 2006 as a joint venture between Shriram EPC and Bessemer Venture Partners which together put $20 million to start the venture. The company develops renewable energy power plants based on biomass, bio gas, wind energy and small hydel projects.
The firm started generating power in April 2008 after it acquired the first biomass plant in Kotputli, Rajasthan. It went public five years ago.
It also counts Olympus Capital Holdings Asia as a key shareholder. Besides holding direct stake, Shriram Group also owns a stake in a Singapore-based holding firm which is backed by both Bessemer and Olympus Capital. Olympus also owns a separate stake as a public institutional shareholder.
Last July, the company announced to raise around Rs 400 crore through qualified institutional placement (QIP). But it is yet to go ahead with the issue.
Last week, it disclosed it is also mulling a rights issue for its shareholders to raise money. This was part of the board meeting agenda along with a proposed preferential allotment. However, it has not said anything regarding the board's decision over the rights issue proposal.
For Edelweiss, this private equity styled investment comes at a time when it is looking to expand its alternative investment funds business by adding venture capital and private equity as asset classes.
In May, it appointed Pranav Parikh as head of private equity (PE), seed and venture capital (VC) funds. Parikh was previously working with multi-asset private investment firm Q-Investments and was heading its Indian arm till 2012.
Mumbai-based Edelweiss functions through four clusters—credit, financial markets & asset management, life insurance and commodities. Last year it acquired Forefront Capital, a Mumbai-based hedge fund management firm focused on high net-worth individuals. Forefront is one of the proposed co-investors in Orient Green Power.
EW Special Opportunities Fund II and Ecap Securities Ltd are also part of Edelweiss Group.
In June, Edelweiss raised $205 million as the first close for its special opportunities fund.