Tata Power is in advanced talks with investors such as the Canadian Pension Plan Investment Board (CPPIB), Singaporean sovereign fund Temasek Holdings, and private equity firm General Atlantic to raise up to $600-700 million for its renewable energy business, with an equity valuation of around $6-7 billion.
The transaction is nearing completion, as the salt-to-steel giant seeks to reduce debt and improve its balance sheet ahead of the alternative energy unit’s scheduled public offering, according to economictimes.indiatimes.com.
ET reported on Tata Power’s endeavor to entice investors, including CPPIB, in its issue of 15 October 2021. However, neither the expected value nor the potential involvement of Temasek and General Atlantic had been previously publicized.
Middle Eastern sovereign wealth managers were also approached about a possible purchase. The monetization of renewable energy assets will assist the organization in meeting long-term goals.
Tata Power chose last year to consolidate its entire renewables business under a single body. This covers assets in the pipeline for operational electricity, charging stations, rooftop solar, microgrids, panel manufacture, engineering, procurement, and construction.
According to rating agency ICRA, Tata Power is one of India’s biggest renewable energy companies, with an operational capacity of 2.6 GW comprised of wind and solar in a 32:68 ratio spread across 11 states.
Tata Power has set objectives of 15 and 25 GW of renewable capacity by FY25 and FY30, respectively.
Tata Power Renewable has a total generating capacity of 2953 MW by the end of September 2021, up from 2667 MW in the same time the previous year.