Shapoorji Pallonji in talks to sale stake in solar portfolio
NEWDELHI: The process of consolidation continues in India’s green energy space with diversified conglomerate Shapoorji Pallonji Group in talks to sell a stake in its solar power project portfolio.
The privately held SP Group, which had $5 billion in revenue in 2016, is seeking a financial investor given that financing at the lowest cost holds the key to success.
This has been amply made evident in India’s successive solar contract bid rounds.
“The SP Group wants to sell its solar project portfolio and have reached out to investors,” said a person aware of the development, requesting anonymity.
“SP Group has been looking for a financial investor,” said another person aware of the development, who also didn’t want to be named.
Founded in 1865, SP Group is engaged in construction, infrastructure and real estate businesses across the country. Shapoorji Pallonji Infrastructure Capital Co Ltd (SP Infra) has been active in power, transportation and port sectors.
Its firm Shapoorji Pallonji Solar PV Pvt Ltd works in the renewable energy sector in solar and wind segments.
An SP Infra spokesperson, in an emailed response, confirmed the development. “We are in discussion with several serious investors. The value of the transaction would depend on level of investment and other factors,” the spokesperson said, adding that the size of the portfolio on offer is “under discussion”.
Analysts say that the deal activity in India’s green energy space has picked up and there is a sense of urgency in the equity market activity.
“Financial investors looking for exits and developers looking to raise capital for new projects is creating urgency in equity market activity,” consulting firm Bridge to India wrote in a 3 October note.
Ongoing deal activity includes Subhash Chandra’s Essel Infraprojects Ltd mandating Investec to find a buyer for its solar business and Finland’s state-controlled power utility Fortum OYJ hiring Barclays Bank to sell a stake in its operational solar power projects in India.
In the largest clean energy deal till date, a group of investors led by Global Infrastructure Partners (GIP) on Wednesday announced their plan of acquiring Equis Energy for $5 billion.