JSW in talks with PEs, foreign banks for Mytrah Energy acquisition

The JSW group has initiated talks with several private equity funds including American major, Apollo Global Management to acquire renewable power firm, Mytrah Energy. The acquisition, which would be a tad low than the enterprise valuation of $2 billion, will be announced next month, banking sources said.

JSW group’s JSW Energy has targeted to add 15GW renewables to its portfolio with an investment of $10 billion by 2030. Mytrah has a portfolio of wind and solar power projects with a capacity of 1.8 GW. Mytrah Energy (India) Private is owned by Bindu Vayu (Mauritius), which in turn is owned by Mytrah Energy. MEL was earlier listed on an Alternative Investment Market (AIM) — a sub-market of the London Stock Exchange and its main promoter, Ravi Kailas, Chairman of Mytrah Group holds about 93 per cent shareholding in MEL, with the balance stake held by other investors.

A JSW group denied to comment on the issue.

Lenders are currently looking at various parameters to finance the transaction including the power purchase agreements and their clauses. ”If the (Mytrah) projects have additional payment security mechanisms, compensation for grid unavailability, and financial protection in case of off-taker default, then the investors would look at financing the acquisition,” said a banker close to the development.

Mytrah operational assets as separate special purpose vehicles are currently spread across 17 wind farms and 21 ground-monitored solar farms in Punjab, Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Karnataka, Telangana, Andhra Pradesh and Tamil Nadu, according to the company’s website. The company sells power mainly to state grids through 13-25-year power purchase agreements.

JSW Energy has a market valuation of Rs 35,000 crore as of Friday with Rs 212 Rs a share.

Most of the top Indian conglomerates including Tata, Adani, JSW and Reliance Industries are investing billions of dollars in the renewable power sector. The share of renewable energy in total electricity generation capacity has touched 37 per cent in 2021 from 31 per cent in 2012. Of these, solar power has expanded the fastest, touching 60 GW in 2021 from less than 1GW in 2011. The growth in renewables can be attributed to a combination of improving economics and supporting policies by the Indian government. India aims to generate 500 GW of electricity via renewable energy sources by 2030 as compared to 158 GW at the end of 2021. To meet this goal, India’s renewables need $241 billion of investments till 2029.

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