Acquisition Price / MW in India’s Renewable Energy Sector

Recently Indian renewable energy industry saw two major M&A transactions.

1. Sembcorp Industries (Sembcorp) acquired a 60% stake in Green Infra, a renewable energy company in India with a wind and solar portfolio, for Rs.10.6 billion. The asset portfolio of Green Infra at the time of acquisition was 516 MW of operational assets; more than 180 MW of under development projects with a vision to have 700MW on-the-ground by mid/late 2015 [most of these projects being under construction already]

Thus on a MW scale the acquisition works out to be 2.05 crores INR per MW [1060/516] if we consider only operational assets.

The acquisition seems more attractive with 700 MW; 1.51 crores INR per MW.

2. Another transaction was of Rajalakshmi Group purchasing 63MW of wind power from Hinduja Group flagship Ashok Leyland at Rs 170 crore.

Here the acquisition cost per MW works out to be 2.70 crores INR

To make a detailed comparison, we may need more information on the operating assets of both the acquiree companies- PPA of each project, age of assets, operational expenses, debt,etc. Unfortunately not much information is available.

Ideally one would have a different cost/MW for already operational asset [further divided by age, revenue, debt and cash flow numbers] and a different cost/MW for under-construction.

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One Response to Acquisition Price / MW in India’s Renewable Energy Sector

  1. Pingback: Acquisition Price / MW in India’s Renewable Energy Sector-II | Bharat Vasandani's Blog

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