Several key global investors including Dutch pension fund APG Asset Management, International Finance Corporation (IFC) and Asian Infrastructure Investment Bank (AIIB) are in competition with each other to invest up to Rs 2,080 crore ($250 million) in Mahindra Susten renewable infrastructure investment trust (InvIT), according to a report by The Economic Times.
Mahindra Group's renewable-focussed engineering, procurement and construction (EPC) unit, and an independent power production (IPP) unit are part of Mahindra Susten's businesses which has a value of about $1 billion, sources were quoted as saying by ET.
The sources further revealed that the deal is likely to be closed in 2-3 months. Currently, all three global investors are conducting their due diligence on the assets which are part of Mahindra InvIT.
The person familiar with the matter was further quoted as saying that the deal will include primary and secondary share of sale for 35% stake in Mahindra InvIT. The company will later onboard a few domestic investors like mutual funds or family officers to meet the minimum shareholder requirements.
Canadian fund Ontario Teachers' Pension Plan Board (OTPP) owns about a 30% stake in renewable energy firm Mahindra Susten Pvt. Ltd for an equity value of Rs 2,371 crore ($300 million).
Avendus Capital acted as the financial adviser to the Mahindra Group for the transaction, and Ambit was the financial adviser to Ontario Teachers’. The deal intends to set up an infrastructure investment trust (InvIT) in compliance with the regulations of the Securities and Exchange Board of India.
According to media reports, Mahindra Group and Ontario Teachers’ jointly explored the sale of an additional 9.99% stake in Mahindra Susten in May 2023. The conglomerate had deployed these funds, with an additional amount of up to ₹1,750 crore, into the business and the InvIT over the next seven years.