A source said Avendus Capital has the sale mandate for the proposed transaction.
CLP India, a big investor in the country's power sector, has emerged as the frontrunner to buy a part of Mahindra Susten's solar power portfolio, sources with knowledge of the matter told Moneycontrol.
Mahindra Susten is the renewable energy arm of the $20 billion Mahindra & Mahindra Group and the estimated enterprise value of the select solar assets on the block is between Rs 2,000-3,000 crore, sources said.
"CLP India is currently in advanced negotiations with Mahindra Susten for buying select assets of its domestic solar portfolio but a term-sheet hasn't been signed as yet. M&M is more of an EPC player and not a developer. Their model is to build portfolios, sell them and churn capital," one of the sources cited above told Moneycontrol.
"It is a good quality portfolio which is up for sale. CLP India predominantly has a wind focused portfolio, hence they are keen on this deal to diversify. CDPQ has capital and wants them to expand," added another source familiar with the proposed transaction.
Avendus Capital has the sale mandate for the proposed transaction, another source said.
"Mahindra Susten is constructing two 250MW solar power projects – one each in Madhya Pradesh and Rajasthan – and intends to add one 250MW solar power project every year on its books for the next two-to-three years. It intends to fund the equity component for these projects through equity from M&M and a mix of external debt, internal accruals and divestment of stake in a few of its operational assets," according to a June 2019 report by India Ratings & Research.
Incorporated in 2010, Mahindra Susten offers turnkey EPC solutions for solar power plant projects in India, in addition to provision of O&M services for these projects. Recently, the company has forayed into the development of solar power projects. According to its website, with over 1990MWp (mega watt peak) projects under execution, it is one the largest EPC players in India and has executed & commissioned over 1210MWp of projects which include utility scale solar, rooftop solar and telecom tower solutions.
CLP entered the Indian market in 2002 and since then has built a portfolio consisting of wind, solar, coal and gas assets with a total equity generation capacity of 1842 MW as of 30 June, 2019. In 2018, it introduced Caisse de dépôt et placement du Québec (CDPQ) as a strategic shareholder in a bid to pursue new low-carbon investment opportunities.
On July 3 earlier this year, CLP India announced that it had entered into a binding agreement with Kalpataru Power Transmission Ltd (KPTL) and Techno Electric & Engineering Co. Ltd (Techno). The agreements were to purchase equity stake in three SPVs owning power transmission assets for an estimated enterprise value of around Rs 3,200 crore.Moneycontrol is awaiting email responses from Mahindra Susten and CLP India despite reminders. Avendus Capital too declined to comment.The Great Diwali Discount!
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