Torrent Power Ltd is in talks to buy clean power projects totalling 1.1 gigawatts (GW) from ReNew Energy Global Plc at an enterprise value of around $1.2 billion, two people aware of the development said.
Ahmedabad-based Torrent Power has submitted a non-binding offer (NBO) for ReNew’s solar and wind power assets of 350 megawatts (MW) and 750MW, respectively, at an equity value of around $450 million, the people cited above said on the condition of anonymity, adding discussions on valuation are continuing.
Torrent Power, one of India’s largest integrated power utilities with a presence across generation, transmission and distribution, has been active in India’s green energy deals space and was earlier in fray for US private equity firm Global Infrastructure Partners’ (GIP) Indian clean energy platform Vector Green Energy, that was finally bought by Singapore’s Sembcorp Industries Ltd.
While a ReNew Energy Global Plc spokesperson declined to comment, queries mailed to Torrent Power spokesperson on Thursday night remained unanswered till press time.
“No sell-side bank has been appointed for this transaction by ReNew. The talks over valuation are underway between Torrent and ReNew,” one of the two people cited above said.
Mint reported on 15 November about ReNew’s plan to sell these operational clean energy capacity as part of the company’s capital recycling strategy to reinvest the proceeds in building new clean energy assets.
Torrent Power has a 4.16GW generation capacity, of which renewables account for 1.068GW. The Torrent Group firm is also developing 715MW of renewable energy capacity. Torrent Power earlier signed a pact with Lightsource Renewable Energy to buy a 50MW solar power plant in Maharashtra. Torrent Power also supplies electricity to 3.94 million customers in Dadra and Nagar Haveli, Daman and Diu, Ahmedabad, Gandhinagar, Surat, Dahej special economic zone, Dholera special investment region, Bhiwandi, Shil, Mumbra, Kalwa and Agra.
Founded by Sumant Sinha in 2011, ReNew Power is among the earliest entrants in India’s green economy. The company now has a 13.4GW portfolio with a commissioned capacity of 7.7GW. It recently partnered with Norway’s state-owned investment fund, Norfund, and KLP, Norway’s largest pension company, to co-invest in transmission projects. ReNew Energy Global Plc’s subsidiary ReNew Power Pvt. Ltd has also partnered with Elsewedy Electric SAE to set up an $8 billion green hydrogen plant in the Suez Canal Economic Zone.
Torrent Power is not averse to an inorganic route to grow its business. It had placed the highest bid for acquiring the electricity distribution business of Dadra and Nagar Haveli, and Daman and Diu as part of the Union territories (UTs) electricity distribution companies (discoms) privatization exercise. Torrent Power had also bid to acquire the Chandigarh discom, in which Eminent Electricity Distribution Ltd, a subsidiary of Kolkata-based RP-Sanjiv Goenka Group company CESC Ltd, emerged as the highest bidder.
Deal activity in India’s green energy space continues against the backdrop of the world’s largest energy transition exercise that is currently underway. Some of the deals, as reported by Mint, include Partners Group AG, Switzerland-based private equity (PE) firm investment in rooftop solar firm Sunsure Energy for a majority stake; and Malaysia’s Petronas, Singapore’s Sembcorp Industries Ltd, JSW Neo Energy, global oil firm BP Plc, Norway’s state-run electricity firm Statkraft, and New York-based I Squared Capital looking to buy Continuum Green Energy (India) Pvt. Ltd in a deal having an enterprise value of around $1.5 billion.
In August 2021, ReNew Power merged with Nasdaq-listed special purpose acquisition company RMG Acquisition Corp. II (RMG II) to form ReNew Energy Global Plc, a new entity. As part of its growth strategy, ReNew has also joined hands with AES and Siemens-backed Fluence to form an equal JV for the energy storage business in India. It has also partnered with state-run Indian Oil Corp. Ltd and Larsen and Toubro to form a tripartite JV for green hydrogen in India.