Oil and Natural Gas Corporation has entered the fray to acquire a significant majority stake in Ayana Renewable Power Pvt. Ltd, as India’s largest crude and natural gas producer seeks to bulk up its clean energy portfolio.
The state-run ONGC has submitted a non-binding offer for Ayana, which is looking to sell even up to a 100% stake at an equity valuation of about $800 million, said two people aware of the development.
Sembcorp Industries Ltd, Macquarie Group, and JSW Neo Energy have also submitted non-binding offers for the green energy company, which has a 5-gigawatt portfolio of operational and under-construction projects in Andhra Pradesh, Tamil Nadu, Karnataka, Rajasthan, and Gujarat. By the end of 2025, Ayana aims to double its green energy portfolio to 10GW.
ONGC and these other companies are expected to be shortlisted for conducting due diligence, following which they can submit binding bids. The transaction is expected to be completed over the next six months, said the people mentioned above, declining to be identified.
As India’s conventional hydrocarbon space undergoes disruptions, ONGC has been scouting for acquisitions in the clean energy space, and was earlier in the fray to acquire Finnish state-run power utility Fortum Oyj’s Indian solar projects totalling 185 megawatts.
Malaysia’ state-run Petronas unit Gentari Sdn Bhd ended up winning that bid, making the pursuit for Ayana all the more crucial for ONGC.
₹2 trillion for ONGC’s net-zero target
Mint reported in November that Standard Chartered had been mandated to manage the sale of Ayana Renewable Power, and that the company’s shareholders were seeking to raise an additional $400 million to finance its growth.
Bengaluru-headquartered Ayana Renewable Power is majority-owned by the National Investment and Infrastructure Fund Ltd, India’s largest infrastructure fund. Ayana’s other shareholders include the UK government’s British International Investment Plc, and Eversource Capital.
NIIF, which is sponsored by the Indian government, manages around $5 billion of equity capital commitments across core infrastructure sectors such as transportation, airports, ports, logistics and roads, and renewable energy.
Global oil companies such as energy giant Shell Plc, Total, Thailand’s PTT Group, and Petronas have already established a presence in India’s green energy sector.
ONGC, on its part, plans to spend ₹2 trillion on green initiatives by 2038 to reduce its carbon footprint as part of a broader effort to achieve net-zero emissions by 2038. ONGC had a renewable energy portfolio of 189 megawatt as of financial year 2022-23, which it plans to ramp up to 10 GW by 2030.
The Economic Times newspaper on 4 May reported that JSW Neo Energy and Sekura Energy were among five companies that had submitted non-binding offers for Ayana, with Masdar, Sembcorp and Macquarie also in the fray.
Spokespersons for Standard Chartered, British International Investment Plc, Macquarie Group and Eversource Capital declined comment.
A spokesperson for JSW Energy in an emailed response said, “We refrain from providing comments on market rumours and speculations.”
Spokespersons for NIIF, Ayana Renewable Power, ONGC, and Sembcorp didn’t respond to queries emailed on Tuesday evening.
A renewable power chase
India has an installed renewable energy capacity of 180.79 GW, including 73.31 GW of solar energy and 44.73 GW of wind power capacity. The government’s objective is to add 50 GW of green energy capacity annually to reach 500 GW renewable capacity by 2030.
Attracted by the opportunities offered by India’s energy transition, several deals are in play in the domestic renewables sector.
Just Climate Llp, which is a part of former US vice-president Al Gore’s Generation Investment Management, and Singapore’s CapitaLand Investment Ltd, among other entities, are exploring an acquisition of Radiance Renewables Pvt. Ltd.
Apart from that, Actis Llp’s BluPine Energy, Sembcorp, Edelweiss Infrastructure Yield Plus Fund’s Sekura Energy, Torrent Power, and JSW Group are looking to buy Brookfield Renewable’ 1.6 GW portfolio.
And INOXGFL Group has hired EY for a planned majority stake sale in its commercial and industrial business.
Also, Serentica Renewables, promoted by Sterlite Power, is planning to sell a minority stake. And Sekura Energy is the front-runner to buy solar projects totalling 350 megawatts (MW) from O2 Power.
