Warburg Pincus Llc is exploring the sale of its stake in rooftop solar power company CleanMax, two people aware of the development said, adding the private equity firm may hire an investment banker soon.
A potential deal could rank among the largest in India’s green energy segment, where transaction activity continues unabated despite the coronavirus pandemic.
CleanMax’s other investors are International Finance Corp. (IFC) and UK Climate Investments LLP (UKCI), a joint venture between Green Investment Group and the UK government’s department for business, energy and industrial strategy. UKCI is managed by Macquarie Infrastructure and Real Assets.
Spokespersons for Warburg Pincus, IFC and Macquarie declined to comment. Kuldeep Jain, founder and managing director of CleanMax did not respond to phone calls, texts and queries emailed on Friday.
In July 2017, Warburg Pincus said it will invest as much as $100 million in CleanMax. The company’s operating capacity has grown from 24MW in 2015-16 to more than 500MW in 2018-19, and it expects to expand its customer base from 120 companies to 300 by 2022. It has expanded its portfolio in West Asia and is exploring further expansion in South-East Asia.
India is home to the world’s largest clean energy programme and aims to have 175GW of clean energy capacity by 2022, including 100GW from solar projects. Of this, 40GW is to come from solar rooftop projects. India now has 34.6GW of solar power, a segment that has attracted marquee global investors. Recently, India’s clean energy segment saw the biggest foreign investment when Japan’s Orix Corp. agreed to invest $980 million in Greenko for a 17% stake.
“We are witnessing a lot of deals in play in India’s clean energy market,” one of the two people cited above said on condition of anonymity.
Distributed renewable energy generation is attracting strong investor interest as the market has few developers with large portfolios. Malaysia’s state-run oil and gas company, Petroliam Nasional Bhd or Petronas, last year acquired Amplus Energy Solutions Pvt. Ltd, one of India’s largest rooftop solar power producers. Mint recently reported about EverSource Capital’s plan to buy out the entire 167MW solar rooftop portfolio of NYSE-listed Azure Power Global for around $112 million.
Other potential deals in the works as reported by Mint include: Hyderabad-based green energy producer Mytrah Energy India Pvt. Ltd restarting the majority stake sale process in the firm, ReNew Power Ventures Pvt. Ltd exploring an overseas listing and Acme Solar looking to sell 4.84GW of solar projects.
Also, Petronas is looking to acquire around 10% stake in Tata Power Renewable Energy Ltd, in addition to investing in Tata Power’s renewable energy InvIT. Avaada Energy has mandated Bank of America for selling the stake, and O2 Power and Ayana Renewable Power have emerged as the front-runners to acquire Azure Power’s 305MW solar assets.
While the rooftop solar sector hasn’t performed as per expectations, this is expected to change with Prime Minister Narendra Modi’ recently calling for each state to have at least one ‘solar city’ whose electricity needs would be met entirely through rooftop solar power.
