Mahindra Susten has sold a 30% stake at a net worth of Rs 2,371 crore ($300 million) to the Ontario Teachers’ Pension Board. Mahindra Group and Ontario Teachers’ will also jointly explore the sale of an additional 9.99% interest in Mahindra Susten by May 31, 2023.
The proposed investment would also include the creation of an infrastructure investment fund (InvIT) to list renewable energy assets. The company plans to launch the InvIT by 2024.
Mahindra Susten is the renewable energy company of the Mahindra Group. It is an independent power producer with a capacity of 1.5 Gw and also active in the field of engineering, procurement and construction (EPC), with a built capacity of 4 Gw.
The move follows the decision taken at the Mahindra Group level in 2020 to take its 10 companies public and unlock their value for its shareholders. This includes its footprint in mobility, clean energy, rural, financial services, infrastructure and technology, among others.
In its public statement, the company said Mahindra Group would deploy these funds, along with an additional amount of up to Rs 1,750 crore ($220 million), across the business and InvIT over the next seven years. “During the same period, Ontario Teachers’ has committed to deploy an additional amount of up to Rs 3,550 crore ($450 million) in the business and InvIT over the next seven years,” said said the company.
“As part of the proposed transaction, shareholder loans of Rs 575 crore ($73 million) advanced by Mahindra Group to Mahindra Susten will be repaid,” the company said. As a result of this transaction, Mahindra Group will receive an inflow of approximately Rs 1,300 crore ($165 million). The proposed InvIT would initially consist of renewable energy assets set up by Mahindra Susten with an operational capacity of approximately 1.54 GWp.
“This transaction will enable Mahindra Susten to build a strong renewable energy business focused on solar power, hybrid power, integrated energy storage and 24-hour green power plants (RTC),” the company said.
Deepak Thakur, Managing Director and CEO of Mahindra Susten, said, “This platform will leverage our proven development experience and in-depth knowledge of the Indian energy market. Our in-house EPC capabilities honed in renewable energy projects executed globally ensure Mahindra Susten engineers deliver superior performing assets.
“The Mahindra Group aims to be ‘Planet Positive by 2040’, and the continued influx of patient and long-term capital into our climate positive activities validates our commitment to be a global ESG leader,” said Puneet Renjhen. , member of the group’s board of directors. and Executive Vice President, Partnerships and Alliances, Mahindra Group.
Bruce Crane, Senior Managing Director, Asia-Pacific, Infrastructure and Natural Resources at Ontario Teachers’, said, “As part of our climate change strategy, we are committed to continuing to grow our portfolio of green assets in around the world with investments like Mahindra Susten. This strategic partnership marks the beginning of what we hope will be a long-term and mutually beneficial relationship with the Mahindra Group.
The Ontario Teachers’ Pension Board is a global investor with net assets of C$242.5 billion and exposure to nearly 50 countries.