Canada Pension Plan Investment Board plans to buy around 15 percent stake in Renew Power for $330-350 million (up to Rs 2,275 crore) to become the third-largest shareholder in the renewable energy company.
Canada’s largest pension fund has sought approval from the Competition Commission of India to acquire the stake, according to a proposal submitted by the Indian company. It will pick up convertible preferential shares issued by ReNew Power for $200 million and acquire another 6.33 percent from the Asian Development Bank.
The transaction values ReNew Power at around $2.3 billion, according to investment data platform Paper.VC. BloombergQuint’s estimates show that CPPIB will invest around $130-150 million (up to Rs 900 crore) to buy Asian Development Bank’s stake.
Which means, the lender that acquired shares for about Rs 299 crore in 2014 stands to make threefold gains. Separately, the bank also provided long-term $390 million debt funding to the Indian firm in February.
CPPIB didn’t respond to BloombergQuint’s emailed queries on its proposed investment. ReNew Power declined to comment.
Global pension funds have been scouting to invest in India’s renewable sector, where the Narendra Modi government is looking for $100 billion in investments by 2020. The proposed investment comes when ReNew Power is planning to go public. Its Founder-Chairman Sumant Sinha had told BloombergQuint in February that the company plans to launch an initial public offering before March-end.
The Canadian pension fund will compulsory convert preference shares at the time of the IPO. “The ownership is expected to be not more than 10 percent of the equity share capital (on a fully diluted basis) of ReNew,” the investment proposal said.
Goldman Sachs, 53.9 percent owner of ReNew Power, is the largest shareholder with a total investment of Rs 2,071 crore so far, according to Paper.VC. Abu Dhabi Investment Authority has pumped in about Rs 1,239 crore for its 17.8 percent. JERA Power—an equal joint venture between Japan’s power utilities Tokyo Electric Power Co. and Chubu Electric Power Co—is the third largest investor. It had acquired 10 percent in February at a valuation of $2 billion.
The Gurugram based firm has raised around Rs 5,269 crore in equity funding in all, data collated by Paper.VC show.
Founded in 2011 by Sinha, former chief operating officer at wind turbine maker Suzlon Energy Ltd., ReNew Power began as a wind-energy developer before deciding in 2013 to diversify into solar projects, its largest portfolio now.