Shapoorji Pallonji Group in talks to sell off 400 MWp Indian Solar portfolio

The consolidation exercise continues in India’s green energy space with diversified conglomerate Shapoorji Pallonji Group in stake sale talks for its solar power project portfolio.

The privately-held SP Group, which had $5 billion in revenue in 2016, is seeking a financial investor given that financing at the lowest cost holds the key to success. This has been amply made evident in India’s successive solar contract bid rounds.

“The SP Group wants to sell its 400 mega watt (MW) portfolio and have reached out to investors,” said a person aware of the development, requesting anonymity.

Backed by low financing costs and falling module prices, India’s solar power tariff fell to a record Rs2.44 per kilowatt hour (kWh) in May before firming up to Rs2.65 per kWh in an auction by the Gujarat government last month.

“SP Group has been looking for a financial investor,” said another person aware of the development, who also didn’t want to be named.

Founded in 1865, SP Group is engaged in construction, infrastructure and real estate businesses across the country. Shapoorji Pallonji Infrastructure Capital Co. Ltd (SP Infra) has been active in power, transportation and port sectors. Its firm Shapoorji Pallonji Solar PV Pvt. Ltd works in the renewable energy sector in solar and wind segments.

A SP Infra spokesperson, in an emailed response, confirmed the development and said, “We are in discussion with several serious investors. The value of the transaction would depend on level of investment and other factors.”

The spokesperson added that the size of the portfolio on offer is “under discussion”.

The deal activity in India’s green energy space has picked up. Ongoing deal activity includes Subhash Chandra’s Essel Infraprojects Ltd mandating Investec to find a buyer for its solar business and Finland’s state-controlled power utility Fortum OYJ hiring Barclays Bank to sell a stake in its operational solar power projects in India.

Also, a group of investors led by Global Infrastructure Partners (GIP) will acquire Equis Energy for $5 billion, according to an announcement made on Wednesday. The sale includes the Indian portfolio of the Singapore-based renewable energy developer comprising green energy platforms Energon and Energon Soleq.

NEWS Source: Livemint