Kumar Mangalam Birla-led Aditya Birla Group has entered advanced stage negotiations with Middle Eastern firm Nebras Power as the cement-to-retail diversified conglomerate looks to induct a strategic investor and scale up its renewable energy business which is housed under Grasim, multiple industry sources in the know told Moneycontrol .
"Nebras Power has entered into an exclusivity pact with Aditya Birla Renewables and the former plans to invest around $400 mn as part of a proposed 51:49 JV between the two parties," said one of the persons above.
A second person confirmed the discussions between both the firms. " Aditya Birla Renewables has a target to hit 4.5 GW installed capacity by FY 26 and needs to raise growth capital. Nebras is currently conducting due diligence," he said.
A third person told Moneycontrol that investment bank Standard Chartered is the sell side advisor on the deal.
This person added that the discussions between Birla Group and Nebras Power may or may not necessarily fructify into an eventual transaction and that Japanese and Canadian suitors were also likely to have evinced interest earlier.
A fourth person also confirmed that Nebras Power was keen on the proposed deal.
All the four persons above spoke on the condition of anonymity.
Email queries sent to the Aditya Birla Group and Nebras Power were left unanswered at the time of writing this article. This article will be updated as soon as we hear from these firms. Standard Chartered declined to comment.
If the deal fructifies, it will perhaps be the debut investment by Nebras Power in the Indian renewable energy segment.
The big Birla Green push
Founded in 2011, Grasim subsidiary Aditya Birla Renewables provides five types of renewable energy solutions - solar, floating solar, solar-wind hybrid, wind and battery storage and serves public and private sector customers across India. According to its website, the firm has 6 government utilities and 50 renewable projects in 9 states. The firm reported a revenue of Rs 86 crore for Q2FY24, marking a 55 per cent YoY jump. Quarterly EBITDA grew by 49 per cent YoY to Rs 56 crore.
Aditya Birla Renewables will treble its power generation capacity by the end of this financial year, its chairman Kumar Mangalam Birla said at the 76th Annual General Meeting of the group's flagship, Grasim Industries. The total cumulative installed capacity of Aditya Birla Renewables stood at 744 megawatts in the financial year 2023. According to Birla, this is estimated to increase to 2 gigawatts by the end of March 2024.
Also Read: Aditya Birla Renewables says it will nearly treble its power generation capacity by March
In October 2015, the Birla group had announced a pact to develop a renewable energy platform in India with the Abraaj Group which did not take off as the Dubai based private equity firm collapsed following investor concerns over its healthcare fund.
Know more about Nebras Power
Nebras Power is a global power development and investment company headquartered in Doha, Qatar. Established in 2014, the firm is a wholly owned venture of Qatar Electricity and Water Company.
It is the vehicle through which Qatar develops and manages a portfolio of sustainable strategic investments in power, water and renewables globally. The firm, which has 22 power generating assets ( solar, gas, multifuel, coal, wind and hydro) in eight countries with a gross capacity of 6791 MW, forms part of Qatar's 2030 vision to diversify the economy and to promote the sustainable growth
According to its website, Nebras Power's primary investment focus is on the rapidly developing markets in the Middle East, South East Asia, Sub-Saharan Africa, East Europe and Central Asia and Latin America where economic growth, upward trend of population and increased electricity and water consumptions offer attractive investment opportunities.
Other Middle East investors are also eyeing the domestic renewable energy sector. In an exclusive interview to Moneycontrol dated November 30, 2023, Khaled Abdulla Al Qubaisi, CEO of Real Estate and Infrastructure Investments at Mubadala, a top sovereign wealth fund of the United Arab Emirates, picked renewable energy as one of the firm's key sectoral bets in India -
Also Read: India provides tremendous opportunities in digital right now: Mubadala's realty CEO
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
