Sudhir V. Valia, the brother-in-law of Sun Pharmaceutical Industries Ltd founder and managing director Dilip Shanghvi, has agreed to buy Jaiprakash Associates Ltd’s wind power assets for Rs.180 crore, according to two people directly involved in the transaction.Valia, the promoter of Fortune Financial Services (India) Ltd, will buy Jaiprakash Associates’ wind power assets in his personal capacity. “It (the deal) will be completed and closed soon with a total value of Rs.180 crore,” said one of the two people cited above, requesting anonymity.Valia was also instrumental in structuring the Rs.1,800-crore deal between Dilip Shanghvi Family and Associates (DSA) and Suzlon Energy Ltd in February, throwing a lifeline to the debt-laden wind power turbine maker that defaulted in 2012. Suzlon was looking for a financial investor to help cut the company’s debt and expand its business.
Shanghvi is India’s second-richest person with a net worth of $18.1 billion, according to the Bloomberg Billionaires Index.The renewable energy sector has been a favourite of the private equity (PE) investors over the past two to three years, said Ashish Agarwal, director (infrastructure) at Equirus Capital Pvt. Ltd, an investment bank.“Unlike thermal power, road and port assets, gestation period to build-out a solar asset and wind asset is relatively short (6-12 months versus 2-4 years). Hence, investors have seen more success in project execution with fewer delays and execution challenges,” said Agarwal.An email query sent to a spokesperson of Jaiprakash Associates and to Valia on Friday remained unanswered.
In September, Jaiprakash Associates said that its board has approved a proposal to sell its wind power plants in Maharashtra and Gujarat with a combined capacity of 49 megawatts (MW).A second person close to the development confirmed that Valia had picked up the asset in his personal capacity.While Valia is part of both Sun Pharma and DSA, both entities denied they have agreed to buy Jaiprakash’s wind power assets.In February, DSA said it will form an equal joint venture with Suzlon for developing 450 MW in wind farms within a stipulated period of time. DSA said it will also assist in providing incremental project-specific non-fund based working capital to Suzlon for execution of the wind farm project.It is not clear whether there will be any synergy between DSA’s plan and Valia’s individual investment at present or in the future.
For Jaypee Group, this would be in line with their strategy to reduce the debt on their balance sheet through the sale of some of its power, renewable energy and cement assets, said Agarwal.Jaypee Group has been partially successful with sale of their hydropower assets and thermal power assets to JSW Energy Ltd and sale of their Gujarat cement plant to UltraTech Cement Ltd, he added.As of March, the group had total debt of Rs.63,999.15 crore.Of this, Rs.49,038 crore worth of credit and loan facilities had a default rating as on 7 October, Mint reported earlier this month.Last month, Jaiprakash Power Ventures Ltd, the group’s power subsidiary, completed the sale of two hydropower projects with a total capacity of 1,391MW to JSW Energy for Rs.9,200 crore.
The firm also struck a deal to sell two cement units in Madhya Pradesh to UltraTech Cement for Rs.5,400 crore.This deal, however, appears to be stuck because of rules that bar transfer of limestone mining rights.“For now there seems to be no sign of the central government planning to make any changes to the new minerals act,” said a banker directly involved in the transaction, on the condition of anonymity.“The company (UltraTech) in its earnings call said that it is awaiting changes in the minerals act and is hopeful the government will make the necessary changes in the next parliament session,” said an analyst with a domestic brokerage firm who did not wish to be identified.An email query sent to the spokesperson for UltraTech on Friday remained unanswered.